The New Shopping Paradigm: O-2-O-2-O

circular arrowsRoughly seven years ago Yahoo coined the term “ROBO” (research online, buy offline) to express what was then a growing phenomenon: people using the internet for research before buying offline in local stores. Since that time it has become extremely common, with more than 80% of internet users — some studies show more than 90% — doing research before shopping in stores.

That’s according to Opus Research, BIA, the eTailing Group and others.

In the past year that pattern has become much more complicated. It’s being called various things but there’s no single, catchy acronym to describe it. The crude term that’s been around for awhile is “multi-channel” shopping.

However the behavior is more like: Online-to-Offline-to-Online. Essentially consumers conduct research online, go into stores and then go online again to check prices, product reviews and so on. It’s not a linear pattern and it doesn’t happen in every case — but it happens a lot.

These O-2-O-2-O consumers either buy on the spot or “showroom” (buy online) or buy at another store. This pattern is laid out in clear detail in new research from coupon/circular platform provider Wanderful Media. The survey conducted among 1,027 US adults is full of rich data reflecting this complicated consumer behavior.

I’ve written up some of the findings at Marketing Land. Here I’ll focus on just a couple of things.

Online influencing offline shopping

The survey confirmed what we already know: online is a major influence on offline behavior. Let’s just say that if US retail is worth $4 trillion (roughly) then a meaningful percentage of this offline buying is online influenced. I wouldn’t be surprised if well over $1 trillion annually (this is Forrester’s figure).

What the slide above shows is that only 9% of respondents said that online had never caused them to visit a store. It’s thus fair to argue that 91% of these people were prompted to go into stores by an online promotion or ad of some sort: email, coupons, etc.

Once in stores, nearly 80% of these consumers then went back online.

Online shopping in stores

Of those consumers who went online in stores, 62% did wind up buying something. And of those who bought something roughly half bought in the store and half bought online:

Almost half of those who bought something bought it in the store they were in (49%), while nearly half bought online (48%). The remainder (3%) made a purchase at a different store.

It’s not clear where the 48% who bought online actually made their purchases (e.g., at Amazon vs. the store’s website). The remaining 3% said they bought something or the intended item at another store.

Finally the following were the major considerations behind in-store shopping (vs. online) for these consumers: no shipping charges, easier returns, physically see/examine item, immediate gratification and customer service.

In store shopping considerations

The data hold immediate lessons and practical recommendations for both traditional and online retailers. Regardless everyone, from retailers to CPG brands and agencies, must understand and embrace this new, more convoluted consumer purchase behavior. Traditional retailers in particular must invest in mobile site/app development, improved in-store service and channel agnosticism. They must “showroom themselves.”

Despite all the “showrooming” traditional retailers are in a position to win if they can properly execute against these patterns.

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3 Responses to “The New Shopping Paradigm: O-2-O-2-O”

  1. Justin McCarthy says at

    Great piece, Greg.  What’s interesting is that this O-2-O-2-O phenomenon extends well beyond commerce.  We see it at SmartShoot – customers go online to post a job, review and select a photographer or videographer, and agree on a price; offline to do the actual shoot, on-location; back online to collaborate, edit, review & approve, transcode asset, deliver, distribute, manage payment and rate/rank their creative. Really exciting to us how software can improve the formerly challenging parts of this process, while honoring the key components of the offline experience, in our case the actual on-location shoot.  Many others have similar process – YourMechanic is a really obvious one.  Best, Justin

  2. Greg Sterling says at

    Justin: Thanks, yes I suppose it’s a larger “cultural” phenomen that indicates how the “real” and digital worlds are blending. Another example would be “augmented reality” or the Google AR game Ingress. 

  3. Robert Hawthorne says at

    Another timely post during the peak retail season. Our online retail clients are continuing to grow, so at the end of this offline/online shopping dance, more and more consumers apparently are closing the deal online.

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