O2O

1. Omni-channel: Online to Offline
Click-and-Mortar
Wei-Lun Chang
wlchang@mail.tku.edu.tw
Professor
Department of Business Administration
Tamkang University

2. Launching Yelp Reservation
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3. Launching Yelp Reservation
• Motivation
– Yelp needs a partner (online reservation)
• OpentTable (2013), RezBook, SeatMe
• Background
– Industry: 661 billion ， but only 20% survived
– OpenTable is the most popular platform
– Yelp can enhance revenue (increment of number of
employee)
– Mobile device integration
– More investment
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4. Launching Yelp Reservation
• OpenTable
– Own reservation system (ERB)
– Installation fee: 600-700 USD
– Customer ： via OpenTable (1USD) 、 via restaurant
(0.25USD)
– Restaurant ： 270 USD / month
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5. Launching Yelp Reservation
• RezBook
– Urbanspoon
– Online selection (seats)
– Restaurant ： 200 USD / month
– Customer ： 1 USD
• SeatMe
– Restaurant ： 99 USD /month
– No fees of each transaction
– Earn 1188 USD of a customer per year
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8. Failure: Webvan
• Too Quick to Scale
– Vans, computer systems and software, personnel costs
• The company did not outsource its distribution
– Webvan owned and operated warehouses
– efficiently rationalize delivery routes
Source:
https://rctom.hbs.org/submission/webvans-demise-or-when-technology-fails-to-meet-operations/
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9. Walmart v.s Amazon
• Walmart
– Leading technology
• Amazon
– Auto-pricing robot
– Amazon Mom (competitor: Diapers.com,
2009)
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10. Amazon
• Amazon Books
– 2015/11, Seattle
– First online to offline bookstore
• Amazon Go
– Real-world grocery store
– Artificial intelligence & Internet of things (cameras and
sensors)
• Whole Food
– Amazon fresh pickup
– Organic food (460 stores)
– 70% of population + 1-hour deliverySource:
http://finance.technews.tw/2017/01/08/retail-business-am
Source:
https://www.geekwire.com/2017/amazon-set-open-secon
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13. Amazon
• Amazon Dash Button
– Amazon Prime
– $ 4.99 USD
– Set it, press it, and get it
– 80+ brands, 100+ products (2016)
Source:
https://techcrunch.com/2016/03/31/amazon-
expands-dash-button-line-up-top-sellers-to-
date-include-tide-bounty-cottonelle/
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14. Amazon
• Amazon Key
– Amazon Prime
– Amazon Key In-Home Kit, $250 USD
– 58% prime members won’t use it
– 5% prime members will use it
Source: https://www.amazon.com/Introducing-
Amazon-Key-In-Home-Kit/dp/B00KCYQGXE
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15. Walmart
• Walmart.com
– Ship from store
– Site to store
• 10 AM to 10 PM
• 24 hours pickup
• Walmart pickup grocery (2014)
– Online order, drive through pickup
– 2 hours
– 10,000+ items
• Shipping pass v.s Amazon prime
– 2 days guaranteed
• Merger
– Jet.com
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16. O2O Blueprint
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17. Effect of Omni-channel
• Amazon is accounting for 26% of online retail sales
• US Survey (2015/6-2016/8, 46,000 shoppers)
– 7% online-only shoppers
– 20% store-only shoppers
– 73% omnichannel shoppers
• The more channels customers use, the more valuable they
are
• Omnichannel shoppers are more loyal
– 23% more repeat shopping trips, are willing to recommend
• Encouraging online customers to visit a store increased
profits
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18. Case: Warby Parker
• 2010-present
• Try-at-home, one-for-one business model
• Offer the best experience to customers
– 1st
: On-the-spot eye exams, next-day and direct-
to-door service
– 2nd
: Order online (5 frames), try at home (5
days), return the box (free shipping)
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19. Logistics: IT Perspective
• Software
• Infrastructure
• People
To support process
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20. Summary
• How to become competitive?
– Last mile of logistics
• Location is important
– Exclusive item
• Channel, …
– Omnichannel strategy
• Online x Offline
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21. Successful Strategies for Omni-
channel Retailing
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