Win Online and Retail Using O2O Marketing to Boost Sales

Learn the key components of O2O marketing and how Shopify can help boost sales.

In a world where digital presence and offline stores are equally vital, online-to-offline commerce is not just an innovative business strategy—it's essential. 

Online-to-offline (O2O) marketing strategies attract prospective customers from online channels to physical storefronts, creating a seamless customer journey that enhances engagement and boosts sales. 

But to run a successful O2O campaign, you need a few things: a solid understanding of your customer, seamless integration between sales channels, and personalization that meets buyers where they are, using first-party data you’ve already collected. 

This guide shares how to do it effectively, with tools to help you personalize O2O marketing campaigns at scale, and strategies employed by leading retailers.

The shift in consumer shopping behavior

The modern shopping experience is anything but linear. Today, consumer preferences have evolved away from single-channel commerce and towards a blend of digital and physical shopping experiences. 

One eMarketer report concluded, “In-store retail is experiencing a revival as retailers integrate physical and digital strategies to deliver experiences that ecommerce can’t replicate.”

This is especially true among younger shoppers. Gen Z is twice as likely as the overall population to discover products on social media, but physical stores are their preferred purchasing channel—beating ecommerce websites and social commerce storefronts, which were previously considered the most effective ways to engage younger consumers.

But seamless experiences aren’t just preferred by Gen Z at the point of purchase: Shoppers of all ages are turning to alternative fulfillment options like curbside pickup and buy online, pick up in-store (BOPIS). By 2025, these “click and collect” options are set to drive $154.3 billion in retail sales in the US alone. 

Seamless integration between online and offline channels is a critical business strategy to meet these consumer expectations. Typically, we’d see this described as omnichannel—the consumer-centric way of offering a seamless customer experience across multiple channels. Yet as Bobby Morrison, chief revenue officer at Shopify, wrote: “If your business is striving for omnichannel, you’re already behind.”

Shopify’s unified commerce approach is a step above omnichannel. Product, order, and customer data come together in a single commerce operating system (COS), which applies the omnichannel approach to your front and back end. 

 

Understanding O2O marketing

O2O marketing is a strategy that connects online customers with in-person retail. It merges online marketing channels (such as social media, email marketing, and mobile apps) with local marketing to make the shopper feel as though they’re getting a seamless experience, regardless of where they interact with a brand. 

For example, you could use proximity marketing to detect when a shopper is within a certain radius of your physical store and send an in-app push notification. Combine this with personalization, such as a free gift that complements their recent online purchase, to incentivize them to visit. 

Yet you don’t need permanent locations to run O2O marketing campaigns. Luggage brand BÉIS, for example, started with popup shops. “[Popups are] really a moment to build the brand and to build the relationship with the consumer,” said Adeela Hussain Johnson, CEO at BÉIS. 

“That perspective is what allows us to do it so uniquely, because the KPIs are not traffic per foot or sales per foot. It’s really about, how do we hear what the consumer is looking for and how do we create a fun, immersive way to tell our brand story?”

These popup experiences have proved lucrative for the luggage brand: Customers who engage with BÉIS’ retail activations have a 20% higher 12-month long-term value. Adeela adds, “We see an average 30% increase in traffic during popup activation and an average revenue lift of 10%.”

The role of personalization in O2O marketing

Personalization isn’t just a marketing strategy, but a comprehensive approach to engaging customers. When buyers feel recognized and valued with personalized interactions in your online-to-offline marketing, it significantly increases customer loyalty and boosts sales. 

Almost double the number of senior marketers will employ basic information to personalize the customer experience this year compared to last. However, there’s more to personalization than adding a {First.name} tag to marketing emails—some 70% of consumers say it’s important that they receive a personalized experience from store employees who know who they are and their history with the company. 

This is made possible with first-party data—information you’ve collected about your audience, such as items they’ve bought, their browsing history, links they’ve clicked in emails, and purchases they’ve made in-store.

Key components of successful O2O strategies

First-party data

Third-party data sources, such as browser cookies, are retiring. Leading browsers like Google Chrome and Apple’s Safari are sunsetting their cookie-tracking abilities. It’s no longer possible to collect accurate data on what actions users take on-site and post-session. 

In the world of modern personalized O2O marketing, first-party data is gold. It forms the basis of understanding who the buyers are, their preferences, and their behaviors, using data that you own, such as:

• Website, app, or product analytics
• Point-of-sale (POS) systems 
• Feedback and reviews
• Social media accounts 
• Customer surveys
• Email marketing platforms
• CRM data
• Loyalty programs

To succeed with personalized O2O marketing, you must restructure ecommerce on the strength of your first-party data, creating a more personal shopping experience that fosters customers' trust and leads to higher conversion rates. 

Shopify, understanding the critical role of personalization, emphasizes creating unique, tailored experiences for customers. Our unified customer data model helps in creating a cohesive shopping experience across platforms. You can then craft targeted marketing strategies that effectively convert online engagements into offline commerce.

Shopify is an all-in-one commerce operating system for retail brands.

Shopify acts as a central repository to collect and segment customer data. Unified profiles collect all of the data you’ve collected on customers, such as:

• Their physical location
• Links they’ve clicked in a Klaviyo email campaign
• In-store sales recorded on your POS system
• Responses they’ve submitted to a post-purchase feedback survey 
• Their preferred shipping and payment method

You can then use segmentation to divide people into groups based on traits they share. The simplest approach is geographic: target people within a 10-mile radius of your store and invite them to visit the retail location, with a discount code to redeem in-store. 

Personalization adds another layer to this campaign—perhaps tying a discount code to a product that complements the item they just bought, or further segmenting the geographic group to only reach VIP customers. Could you double the value of their loyalty points on an in-store purchase to further encourage retention, for example?

Targeted outreach and acquisition

Customer acquisition costs have risen by 222% over eight years. Inflation concerns, fierce competition, and the looming holiday season mean they’re not set to go down anytime soon. 

Omnichannel retailers have an advantage over online-only brands because they can invite customers into a physical location to build a rapport. You can chat with them face-to-face, showcase your personality, and let shoppers interact with your products in the flesh. 

The hardest part, however, is driving foot traffic to your store. First-party data helps you personalize your outreach. For example, you could employ O2O marketing strategies like:

• Segmenting people who haven’t visited your store within a specific time frame, and sending a targeted Klaviyo email to incentivize them to visit again—perhaps with a discount code that can only be redeemed in-store
• Segmenting people who said they plan to go to New York in a travel-related quiz and enrolling them in an automated email series featuring things to do in the city (like visit your store)
• Proximity marketing, which sends push notifications to people within a certain radius of your retail store and promotes time-sensitive offers

The issue is: once you do get someone in-store, they still might not be ready to buy. Home furnishings retailer Parachute doesn’t consider these people lost forever. It creates customized online and in-store experiences, including follow-up emails from the specific sales assistant they worked with, which is accomplished through data unified through Shopify POS. 

“I view our stores as relationship centers,” says Ariel Kaye, founder of Parachute. “They're a place for us to get to know our customer, for our customer to get to know us.”

Personalized storefronts

What customers truly want is a personalized experience—not just in person, but starting from the interactions they have with online channels such as your ecommerce storefront. Boilerplate websites that show the same content to all visitors are no longer fit for purpose. 

Extensible commerce platforms like Shopify let you personalize website content at scale, based on the first-party data you’ve already collected on your customers. Here’s what that might look like:

• People with a shipping address within a 10-mile radius of your store see an announcement bar that highlights their nearest store.
• People who’ve bought a product from your “Women’s dress” category in-store see complementary items (such as best-selling shoes or jewelry) on your homepage carousel.
• People who’ve used in-store pickup for an online order see items that are available for same-day delivery or immediate pickup from their local store. 

It’s not just your online storefront that must be personalized—retail experiences can also be tailored to individual buyers. Again, the ability to do this successfully depends on the technology infrastructure you’ve built.

Because Shopify is inherently unified, the Shopify POS app acts as a point of reference for your centralized customer profiles. You can ask for a customer’s name or email address and find them in your mobile POS system. This shows any previous interactions they’ve had, such as: 

• Products they’ve bought
• Purchase channels they’ve used
• Flash sales they’ve engaged with
• Loyalty points they’ve earned
• Responses they’ve contributed through feedback surveys

For example, retail associates might pull up a customer profile for someone shopping in-store. The customer made their first purchase over three years ago. They’re loyal—they’ve placed 12 orders throughout their lifetime—most of which are refills of their favorite dry skin moisturizer. 

The retail associate doesn’t need to spend time selling the benefits or features of that moisturizer. Instead, they can personalize the retail experience by upselling a skincare bundle designed for dry skin, or cross-selling a complementary exfoliator. 

It’s a win-win for everyone involved. The customer walks away with new products to try, which gives more opportunities to build product affinity and increase customer lifetime value. 

Seamless checkout processes

The customer experience lives and dies at the checkout—not just for first-time shoppers, but also for those who are already loyal to your brand. PwC reports that customers will stop purchasing from a brand they love after just one negative experience. Clunky checkouts could be the culprit. 

Help customers surpass the final hurdle by optimizing your checkout experience. Innovations in checkout technology, such as Shopify’s Shop Pay, help online shoppers make fast and secure transactions when they shop in-store and online, using first-party data you’ve already collected. 

Online shoppers with a Shop Pay account can save their payment details in a vaulted digital wallet. When they’re ready to pay for their order, shoppers can complete the checkout process in a matter of seconds. It’s no surprise that Shop Pay’s overall conversion rate outperforms peers by up to 36%.

What’s especially great about Shop Pay is that it’s unified and ready for customers to check out wherever they buy. They’ve got the option to:

• Pay for items through your ecommerce storefront
• Place orders through the Shop App
• Split the cost of in-store payments using Shop Pay Installments

Shopify’s checkout outperforms peers by 15.2% on average.

Speedy checkout is just one component of the O2O marketing funnel. Many online retailers treat physical stores as mini distribution centers. Online shoppers can place an order online and head to their local store for immediate pickup. It lets them bypass any shipping charges usually added at checkout, while giving retail associates the chance to build a rapport with the online shopper.

Your commerce platform should be capable of handling the logistical process of these online-to-offline transactions. Monos, for example, uses Shopify to unify inventory, sales, and customer data in one centralized platform. 

“Shopify's real-time and centralized inventory management is very helpful," says Anita Yeh, director of retail operations at Monos. "When our online team is servicing a guest browsing the website, they can see inventory available in a local store and hold it there for the customer to pick up that same day so they don't have to wait. 

“Or if a retail associate is helping a customer find an out-of-stock item, they can see where we have it in a warehouse and get it shipped to them before their upcoming vacation.”

Leveraging Shopify’s ecosystem for O2O marketing

Shopify offers a suite of tools designed to bridge the gap between online browsing and offline buying seamlessly:

• Shopify Segmentation: Divide customer profiles into groups of people who share the same qualities, or have demonstrated similar behaviors. You can use these segments to automate O2O marketing—like sending a particular group of people a targeted email, or personalizing your online storefront.
• Shopify Audiences: Target likely customers based on their online behavior. Use these retargeting lists to reach people through Facebook, Instagram, and Google Ads and drive them toward brick-and-mortar stores. This tool has proven to increase retargeting conversions by 2x and cut customer acquisition costs by up to 50%.
• Shopify Collabs: This app connects you with influencers who your target audience follows, so you can create user-generated content and manage free influencer samples—all without leaving your Shopify admin.
• Shopify POS: The POS system integrates online insights into the physical shopping experience, ensuring consistency and personalization in every interaction.

These marketing and personalization tools ensure that the transition from online to in-store is not just smooth, but also strategically beneficial. 

For example, there isn’t much point diverting online shoppers to a retail store if the product they’re interested in is out of stock. Unified inventory data inside Shopify can show real-time quantities on your product pages. Shoppers can see that it’s in stock, reserve their item online, and head to their nearest store for collection. 

The best part: Shopify’s partner ecosystem helps omnichannel retailers enhance data-driven marketing strategies. Whether it’s a loyalty program or product bundle that’s available to customers both in-store and online, it all comes together on Shopify.

Master O2O marketing with a unified commerce operating system

O2O marketing is more than a buzzword—it’s critical for multichannel retailers who want to strengthen customer loyalty and offer seamless shopping experiences, wherever those interactions take place.

Shopify is uniquely positioned to help retailers adapt to this changing landscape with its comprehensive suite of tools and integrations. 

You can funnel first-party data from multiple sources into unified customer profiles, use segmentation to divide them into groups of shared qualities, and leverage marketing automation to offer the type of personalized experiences that modern shoppers are crying out for—wherever they take place.