Walmart’s New Online to Offline Model and Baidu’s Waimai – Strategy with RS
If you wish to win your customer’s heart & mind & eventually their business then you will have to come up with a business model which is in sync with their lifestyle & unique requirements.
Today’s customers are cash rich & time poor. In an attempt to cater to this requirement Walmart is experimenting with a new business model – Online to Offline (O2O). In O2O a customers places order Online & collects it Offline. For this Walmart has introduced Walmart Pick up – Grocery. A customer can place order for grocery Online & while returning back drive via the Walmart Pick up point. Here they are assigned a bay where they can park. A Walmart employee is either waiting or arrives minutes later with the order & loads it into the vehicle!
Walmart is extending this initiative to sync in with office goers requirements who work in Central Business District (CBD). These office goers can place order Online & while returning home in the evening collect the order Offline from a truck which is centrally parked in a parking lot. While for customers for whom a Walmart store falls on their way home, it offers them the option of placing order Online & picking it up Offline from the physical retail store!
O2O is not restricted to grocery & USA. It has winged its way to China & has been received enthusiastically. Young adults of China, armed with smart phone, want to experiment with food during office lunch hours but do not either have the time to visit the restaurant or find the chore of physically visiting a restaurant inconvenient.
For them Baidu has launched Baidu Waimai, which picks up restaurant orders placed by them Online & delivers it at a ‘physical’ place mentioned while placing the order.
O2O service is catching on in a big way because it has several benefits associated with it other than just the convenience of delivery:
– The O2O service provider offers price discount over & above the discount provided by the restaurant
– The restaurant owner chips in by topping up the order – for example McDonald tops up the order with extra fries!
-If you pay Online using the service provider’s payment gateway, in case of Baidu through Baidu Wallet, you stand to get extra discount!
– As you finish placing the order you are rewarded with a discount coupon which will entitle you to ‘mouth watering’ discount when you place your next order.
– You can track the order from the time you have placed it till it reaches you.
If O2O has so many benefits then will you also offer O2O facility to your customers?
In this series, Rajesh Srivastava, Business Strategist and Visiting Faculty at IIM Indore gives you a regular dose of strategy case studies to help you think and keep you one step ahead as a professional as compared to your peers. Rajesh is an alumnus of IIM Bangalore and IIT Kanpur and has over 2 decades of experience in the FMCG industry. All previous Strategy with RS posts can be found here