Online-Offline Cooperation and Complementation Analysis Pág
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‘SUPPLY CHAIN, TRANSPORT AND MOBILITY’ MASTER PROJECT. UNIVERSIDAD POLITÉCNICA DE BARCELONA ONLINE‐OFFLINE COOPERATION AND COMPLEMENTATION ANALYSIS Author: Laura Tarela Alonso. June, 2016 DIRECTED BY PROFESSOR DR. YI YANG, DEPARTMENT OF MANAGEMENT SCIENCE AND ENGINEERING, SCHOOL OF MANAGEMENT. ZHEJIANG UNIVERSITY. HANGZHOU. CHINA Online-Offline cooperation and complementation analysis Pág. 1 Abstract Due to the fast and efficient implementation of new purchase and sales processes, different current options through how both sides, consumers and retailers carry out purchases, are gaining importance over the last years, what generates the research of growth and improvement processes. Nowadays online sales are moving forward by leaps and bounds though the need of keeping offline traditional system has been verified, so the strategy seeks combining both of them and with it obtaining the maximum benefit for consumers and also to ensure retailers’, as well as providing an experience to customers during the buying process through the omnichannel strategy. But this paper’s objective is to answer the different questions related to the online and offline connection, their origins and development, such as: 1. Which is the relationship between online and offline channels. 2. If they are complementary strategies rather than substitutes. 3. And in case of being complementary strategies, how do they work together and what profits do they award. With this it is sought not only to understand the new tendencies and their development through the last years and to know how to obtain the higher profit with each of them but also to find out how the business development will be for the coming years depending not only on consumers’ behavior facing all these new strategies but also on each industry and its possibilities. To better understand the behaviour of these channels and its operation three companies from three different sectors whose business approaches were quite different in their beginnings, as well as their strategies, focusing on a single platform, have been chosen to analyse how they have been evolving since their starts until today, where both online and offline channels and the different platforms that compose them through which the client can interact with the brand become links in a single chain achieving the fusion not only between the different channels but also between the customer and the company. Online-Offline cooperation and complementation analysis Pág. 2 Contents Abstract ....................................................................................................................... 1 Chapter 1 ..................................................................................................................... 4 Introduction to firms’ Omnichannel Strategy. Offline and Online channels .............. 4 1.1 Introduction to Omnichannel Retail Strategy ................................................... 5 1.1.1. Omnichannel origins ................................................................................. 5 1.1.2. Online & Offline’s relationship .................................................................. 5 1.1.3. Online ↔ Offline. Complementary effects ............................................ 11 1.2 Last strategy step. Multichannel to Omnichannel .......................................... 15 1.3 Complementary strategies: the new strategic concept ................................. 17 1.3.1. O2O ......................................................................................................... 17 1.3.2. Multiple modalities ................................................................................. 20 1.4 Trends examples ............................................................................................. 28 1.4.1. Bringing the best of online to the real world .......................................... 28 1.4.2. Be everywhere: offline and online .......................................................... 28 1.4.3. Buy online, pick up offline ....................................................................... 29 1.4.4. Rewarding visits ...................................................................................... 30 1.4.5. Hyperlocal deals ...................................................................................... 30 1.4.6. More than a store ................................................................................... 31 1.4.7. All of the world is a shop ......................................................................... 31 1.4.8. Tryvertising ............................................................................................. 31 1.4.9. Please do touch the merchandise ........................................................... 32 1.4.10. Trying out first ....................................................................................... 32 1.4.11. In‐store classes ...................................................................................... 33 1.4.12. In‐store exhibitions ............................................................................... 33 1.4.13. Limited locations ................................................................................... 33 1.4.14. Technological retailers .......................................................................... 34 1.5 Following chapters’ approach ......................................................................... 37 Chapter 2 ................................................................................................................... 38 Companies’ O2O (online ↔ offline) conversion processes ..................................... 38 Online-Offline cooperation and complementation analysis Pág. 3 2.1 Grocery‐sector company: Walmart ................................................................ 39 2.1.1. Walmart’s origins .................................................................................... 39 2.1.2. Walmart nowadays ................................................................................. 40 2.1.3. Walmart O2O general resume ................................................................ 51 2.2 E‐commerce company: Amazon ..................................................................... 54 2.2.1. Amazon’s origins ..................................................................................... 54 2.2.2. Amazon nowadays .................................................................................. 54 2.2.3. Amazon O2O general resume ................................................................. 67 2.3 Press‐sector company: ‘El Mundo’ (general information newspaper) ........... 70 2.3.1. El Mundo’s origins ................................................................................... 70 2.3.2. El Mundo nowadays ................................................................................ 70 Internet effects over El Mundo ......................................................................... 70 Executive Management online strategies (2015) ............................................. 72 Products offered nowadays (2016) ................................................................... 75 Online model introduction results (2016) ........................................................ 76 2.3.3. El Mundo O2O general resume ............................................................... 78 Chapter 3 ................................................................................................................... 79 Most important conclusions ..................................................................................... 79 3.1 Offline versus Online ....................................................................................... 80 3.2 Advantages and disadvantages ....................................................................... 80 3.3 How to take full advantage of online and offline? .......................................... 82 3.4 Web control and social networks. .................................................................. 84 3.5 Email marketing and balance between channels ........................................... 84 3.6 Basic research. Online trading areas ............................................................... 86 3.6.1. Modeling problem approach .................................................................. 87 3.6.2. Results ..................................................................................................... 88 3.6.3. References about mathematical modeling ............................................. 89 Acknowledgements ................................................................................................... 90 Bibliography .............................................................................................................. 91 Online-Offline cooperation and complementation analysis Pág. 4 Chapter 1 Introduction to firms’ Omnichannel Strategy. Offline and Online channels At the beginning of the twenty first century many commercial firms adopted the omnichannel strategy to improve their customer services. With that purpose they added the online methods to the more traditional way of working, the offline one. To start studying the different questions considered, it is necessary to know first not only how the natural tendencies of demand work but also the possibilities that retailers have to find new models which can generate different and designed experiences in each case. The origin of these questions, together with the new purchasing concepts