O2O Adoption Benefits: A Managerial Perspective of Customer Benefits

Abstract

Online‑to‑offline (O2O) is a fast‑growing business innovation, pointing online customers to physical locations where they can more closely inspect – and purchase – their desired products, or can collect them after ordering online. However, the growth of O2O may be limited by the lack of reliable understanding of its benefits to customers. This study aims to remedy this lack of knowledge, by analyzing the transcripts of 24 semi‑structured interviews with managers. The study finds that O2O benefits customers in three main ways: (1) making more informed decisions, (2) receiving timely information on discounts and sales, leading to time and cost savings, and (3) having direct interaction opportunities with the business ‑ something which is not the case in a pure online business. Contrary to general understanding, the results show that offering discounts as a benefit to customers is an approach that is not necessarily applicable across‑the‑board, because in some industries the margins are too low to offer any discounts. Further work may be needed to examine the relevance of discount as a customer benefit proposition for adopting O2O. We also find that the time saving benefit to customers remains a contentious issue, as the availability of too much choice may lead to customers spending too much time investigating the product/service, thereby delaying their decisions and ultimately negating any benefits. The results contribute to e‑commerce literature in building the theoretical understanding of the perceived benefits of O2O for customers from a managerial perspective. The identification of O2O benefits for customers will also help in understanding the behaviors and intentions as well as perceived value of adoption and acceptance of newer forms of technological ‑oriented innovations such as O2O in general. Managers can use the results for business‑case development and strategizing benefits realization of adopting O2O. The results will help managers in creating tailored strategies to integrate features and functionalities in the software products used for O2O to ensure that identified benefits are provided to the customers, thus improving the chances of successful realization.