Future Challenges of Marketing Online-to-Offline (O2O)

Introduction

As the world increasingly transitions and embraces the internet, the line between offline and online activities is blurring. Tasks that were primarily done in person in traditional business settings, such as shopping and education, are now happening online. Consequently, businesses and institutions with strong physical and online visibility dominate various industries (Chiang et al., 2018). For example, Amazon's online and offline dominance can be attributed to its effective integration of physical retail locations and retailer websites, enhancing purchase and search convenience, information availability, and product variety (Kao et al., 2020). The hybrid of physical and online shops has led to the emergence of Online-to-Offline Marketing (O2O), which is facilitated by advancements in mobile devices and information and communication technology. O2O refers to integrating online and offline service processes through advanced technologies and devices, allowing providers to engage, interact with, and attract customers (Ryu et al., 2020). The acronym O2O is used in digital marketing to demonstrate how companies in this digital era manage their customers both on the internet and in the physical world. It is primarily used to describe strategies that allure customers in digital environments to make purchases from physical shops (Kao et al., 2020). O2O aims to address consumer needs for safe shopping by allowing them to engage in various online and offline processes, including allowing customers to pick or return items purchased online to physical stores and providing home delivery services for online purchases.

The O2O integration has transformed modern business models. Traditionally, offline and online marketing strategies were used independently to achieve varying goals. However, under O2O, these strategies and processes are used together to achieve shared marketing goals and objectives (Leung et al., 2016). For example, companies such as Amazon and Alibaba, primarily online stores, are increasing their brick-and-mortar investments to enhance consumer experiences by allowing them to touch and try on multiple products before purchase (Ryu et al., 2020). This aspect is impossible to achieve in online shopping. On the contrary, Starbucks and IKEA, primarily offline, are increasing their online presence through apps and websites to increase the personalization of orders and service delivery and efficiency. Besides, the data collected in both online and offline transactions can be used to develop marketing campaigns and attractive promotions based on consumer needs and expectations (Pan et al., 2017). While O2O is associated with multiple advantages and opportunities, research has identified potential challenges such as determining the impact of the model on online and offline sales and traffic (Pan et al., 2019). While numerous studies have been conducted on O2O, there is limited research on O2O challenges and how they impact current and future business performance. Thus, this research essay aims to bridge this knowledge gap through a systematic bibliometric literature review (LRSB) of relevant literature.