In the West, online business has been growing over the past decade. Until recently, the complete shift towards online had not actually happened. Governments were sometimes even discouraging customers from shopping online in order to support local retailers. But that just got changed. The shift to online is now being forced by the Corona crisis.
What happens when things turn back to normal? Will it be business as usual? Will we partly swap online for offline again and return to brick-and-mortar stores just like that?
I am convinced companies will need to reinvent themselves. The way the online and offline world have evolved in China – long before the Corona crisis by the way! – may serve as an inspiration.
China’s quick move to online
China saw big online platforms such as AliBaba emerge in the early 2000s. It was only a few years later though, with the Mobile Revolution, that a massive transition from offline to online occurred. At one point in time however, these platform companies had a hard time differentiating through online experiences alone. It was just not enough to list one’s products in an app, potential buyers had to be given a way to ‘try before you buy’ as well. Augmented Reality (AR) technology came to the rescue, providing virtual experiences of trying on products. But AR proved not to be the complete solution. Our human nature entails that we often like to use all our senses while making a buying decision.
From online back to offline: rise of the OMO Sapiens
‘OMO Sapiens’ was a concept first introduced in 2017 by Dr. Kai Fu Lee, the Chinese author of the must-read book AI Superpowers. He referred to China’s new world as ‘OMO’, Online-Merged-with-Offline. Increased usage of smartphones, online payment systems, sensors, and advances in technologies such as AI, served as enablers. Data of human online and offline behavior are combined to provide the most personalized recommendations. Additionally, the overall customer experience is augmented if it consists of seamlessly integrated online and offline components.
And so, one could say that China’s drastic move to online created a pull-effect towards the offline world. Hema, Alibaba’s first supermarket (now called Freshippo) serves as a typical example of an online platform moving into brick-and-mortar. Shoppers could finally see, feel, smell, and taste food before purchasing. After scanning the product’s QR code in app (of course by Alibaba) and easy payment through Alipay, the groceries would be delivered to your home within half an hour. Even for free if you live within a range of 3 kilometers. Or, alternatively, the products could be cooked and served at the accompanying restaurant. Popularity skyrocketed, and in just three years’ time 200 of these Freshippo stores opened.
Other offline stores from formerly purely online companies shot up like mushrooms as well. Sometimes serving as an ‘offline experience’ location only, where one can try on fashion items, smell perfumes, or listen to different kinds of sound systems, while the actual buying happens online. These big concept stores sometimes provide stunning ‘Instagrammable’ experiences, appealing to all the senses. They function more as a huge marketing machine than a revenue-generating location. A perfect example of this is the Shanghai Starbucks Reserve Roastery, which opened December 2017 and is referred to by Starbucks as ‘our most theatrical’ experience.
Corona forcing the West to shift to online
Currently, most western countries are in lockdown, and retailers, bars, and restaurants had to close their businesses. They had to revert to doing business online almost overnight in order to survive. Creativity and ingenuity are thriving, completely new offerings are quickly emerging, ALL of them online. Web shops are now ubiquitous, but struggle to fulfil our expectations of convenience, married with correct and quick delivery. Some do an awfully bad job, like K-Mart in Australia, introducing a ‘virtual queue’ to even access their website. No wonder this enraged shoppers and probably pushed a lot of them to competition.
The New Normal in the post-Corona era
Naturally, shops will open again once lockdown is lifted. We are yearning to talk to and meet with others, so we cannot wait to go out and do our shopping in the brick-and mortar stores. But we will never go ‘back to normal’, we have changed as customers forever. We have gone through a similar transition as the Chinese, but in a much quicker and forced way. The Corona crisis served as a catalyst for the online experience and we will not say goodbye to its benefits. Brick-and-mortar locations can survive, but only if they provide convenient online options as well, and intelligently combine the data of both.
It will definitely not be Business as Usual. Online is here to stay, we will now need to figure out how to merge with offline. This means that in post-Corona times, most companies in the West will need to reinvent themselves to accommodate for us as OMO Sapiens.