CHAPTER 4: RESEARCH RESULTS
4.1 T ECHNOLOGICAL DIMENSION
The goal is to make the user interface as intuitive and user-friendly as possible.
However, people who are actually be using the application have much understanding than engineering department. This is why companies invite public users to participate in application development process to gather their behavior feedback. The result was a better, more intuitive interface design and a high level of user acceptance.
Yahoo has dedicated to develop the “user-center value.” Since public users prefer to use the application with fluent and easy operation, both android and ios development team focused on UI design and engaged with consumers to improve the application’s user interface.
2. Ease-of-use application
The main goal of the project is to create an application that even less experienced users can understand without the use of complicated instructions. Users expect to be able to use an app to achieve a goal rather than wasting time learning how to use the app.
The Yahoo chaoji shangcheng app, as a part of an O2O project, has been improved several times throughout its development to satisfy user habits. The Yahoo project team held user study activities during each phase of development wherein testers (user) were encouraged to test the app and to provide feedback to the project team.
When the app is nearly complete, Yahoo will hold a "user night," a final test event
wherein hundreds of users will test the app. Yahoo deems it critical to improve the app continually.
3. Accurately located function
To promote more accurate messaging to customers, some companies have adopted LBS and beacon technologies to locate users. These technologies provide supply the locational data for used to make business to make marketing decisions.
The Yahoo chaoji shangcheng app push presents promotional coupons to shoppers as they approach Yahoo offline partner stores such as Wastons (屈臣氏), Cosmed (康是美), and the Kingstone book store (金石堂). Beacon technologies can detect smaller areas within Taishin Bank branches, and offline Shin Kong Mitsukoshi Department stores include several beacons that detect customer locations and send appropriate messages to them. In turn, customers receive useful messages related to their immediate shopping environment.
4. Stable IT load balancing capability
Stable IT load balancing capabilities are critical for the operation of both online and offline activities. During anniversary events, crowds flock toward department stores. This complicates the buying process and hampers the shopping experience.
SKM sends approximately 300 thousand online promotional messages to existing customer smartphones each minute. SKM is preparing for a consumption peak and has planned the required server capacities and conducted load balancing tests. For Taishin Bank, nearly 3 millions members frequently use web and mobile app banking services, resulting in a large number of transactions. Hence, reliable IT support is essential.
4.2 Management dimension
1. Management supportWhen ideas are proposed, high-level management teams support them if they recognize the value of a given project. Funding and resources are assigned to add value to the project or to solve a pressing problem.
A few years ago, managers did not yet recognize how technologies can benefit the banking industry. However, market environments have changed so fast that
consumers now rely heavily on mobile technologies and on the Internet. Ever since, digital strategies have gradually grown more popular in the banking industry.
Taishin Bank developed a mobile bank app and online banking service to serve their customers via multiple channels. Customers can enjoy access to any service at anytime and anywhere while receiving additional value-added services, such as Taishin Bank credit card promotional coupons. Through management support, Taishin Bank has encouraged O2O project development.
2. Effective CRM system
Customers are now made aware of promotions via online website marketing programs, advertisement campaigns and other digital marketing campaigns.
Therefore, Companies must measure the offline effects of online marketing campaigns and gather data on customers to achieve goals that deliver a good customer experience to improve customer satisfaction and make customer relationship closer.
Shin Kong Mitsukoshi Department store expects to deeply understand consumer's need to provide them instant promotional messages at shopping moment. They combined different technologies to make a shopping environment more interesting and more convenient. For example, they used mobile technology as a media to interact with shoppers, and use beacon technology to observe the shopping route, a customer approaching any counter in a department store can receive a message from beacon installed there. If marketer wants to promote an accurate and useful promotional message to the customer, they need to combine membership data, including historical transaction data, behavior on online (mobile app or website), and demographic data. The useful and convincing messages help shoppers shorten a time to make purchase decision, and technologies from online to offline provide them a better shopping environment.
3. Strategic execution capability
FamilyMart panelists view execution capabilities as necessary to succeed.
Execution occurs as a result of thousands of decisions made each day by employees acting in accordance with the information they have. For instance, in FamilyMart business operations, once operational and managerial decisions are established,
all employees work toward a common goal in a quick and effective manner.
4. Actively involve end users in solution design
It is not difficult to come across a project that failed because it did not satisfy end users. Moreover, separation between project teams and users leads to the risk of losing insight into real user needs. At Yahoo, user study and testing groups are employed to understand user needs to improve apps. The project team invites heavy Internet users to participate in each development phase. Users provide feedback on the usability of the user interface and operation process and compare Yahoo’s app with other similar apps. When a project is nearly complete, Yahoo invites more users to a major event called "user night" to collect additional user feedback. At McDonald's as well, user involvement is regarded as critical to app development.
5. Measure, monitor, and track
Once an O2O project goes live, the organization must measure, monitor, and track the system’s effectiveness while continuously improving performance.
Organizations must also periodically survey their customers to determine the impact of an application on customer attitudes and behaviors. Project teams must identify performance metrics of such processes and track and monitor user activities. For example, the Yahoo project team tracks the active status of users: (1) user downloaded the app and is active, (2) user downloaded the app but is inactive, and (3) user downloaded the app but uninstalled it. Different marketing decisions are made depending on the nature of active statuses. The McDonald's Surprise Alarm app project team tracks which coupons are most popular among the public and consistently presents different surprises to customers based on these monitoring results.
4.3 Organization dimension
1. Complete staff trainingKnowledgeable and enthusiastic staff members can deliver useful product information to consumers to help them evaluate the pros and cons of specific products. Staffs who are familiar with O2O project processes must make them more effective. When McDonald's Surprise Alarm app was revealed, restaurant
managers of each branch were assigned a performance target and were encouraged to promote this app in return for significant rewards. In turn, restaurant managers planned strategies and asked for assistance from the McDonald ’s app project team. An app marketer was dispatched to each branch and educated restaurant staff on ways to operate the new version POS and Surprise Alarm app. In-store customers thus acquired app information directly from restaurant staff. To streamline the O2O process and expand usage of the app, McDonald’s emphasized staff training as a critical aspect of this project. The company held regular meetings with restaurant managers of all branches to discuss customer feedback and appropriate responses.
2. Seamless the process of online and offline channels
Cross-channel integration —offering shoppers a seamless experience —has helped some companies acquire a competitive advantage in the marketplace.
Consumers expect seamless experiences across channels. For example, consumers purchase coupons online and then use the item one minute later in an offline store.
Customers expect buying processes to be instant and void of errors.
The Taishin Bank mobile app provides a reservation service for financial product applications to clients. They can fill out several application forms anywhere in advance using the mobile app and send these forms to particular bank branches.
When clients reserve a bank clerk with a deep understanding of the application by mobile phone, all forms are printed out from a printer in the bank branch the client selects. A bank clerk then waits to serve the client upon arrival. You may guess what happens when there is not an effective connection between the Taishin Bank mobile app and Taishin Bank system. Clients can fail to complete an application because forms are sent to the wrong bank branch, and clerks are occasionally unaware that a client has arrived for an application inquiry. Thus, seamless customer experiences are essential in O2O projects.
3. Reinvent the company's future
As O2O projects are quickly proliferating around the world, companies must constantly monitor customer demands and discover new markets. Yahoo Taiwan has served played as an important role in ecommerce in Taiwan. The company
created an online marketplace to gather online stores and to provide offline stores with an Internet domain to create an online store at a lower price. Since 2012, Yahoo has become active in the mobile market due to major changes in customer buying behaviors. The company developed a mobile app that employs innovative technologies to simplify customer buying processes. The app presents promotional messages to customers and directs them to make purchases in offline stores, eventually acting as a real-world shopping assistant for customers.
4. Establish a measurable project goal
Companies must identify business problems and requirements in advance and must carefully analyze business conditions and establish clear project goals.
Making effective efforts decreases failure rates.
To improve the business operation in Taiwan, McDonald's Company has invested heavily in market research for a long time to know customer's insight. They discovered that few Taiwanese make breakfast a daily habit and always rush the work and diet. However, 7-11 convenience store launched a new breakfast project and has a good result. It makes McDonald change the strategy to breakfast service.
The McDonald Company cooperated with partner Leo Burnett, an advertising company known for market research, to rethink the market strategy. Because of adding factors about breakfast and morning, McDonald's Surprise Alarm App's clock function was created and combined with meal coupons to give surprises to customers in the morning. It is also consistent with people daily habit without learning the operation of the new application. The understanding of overall market situation is important at the beginning of the project.
Chapter 5: Conclusion
5.1 Research summary
This research sought to understand the O2O business model by (1) proposing a framework for understanding five types of O2O business model; and (2) presenting research results with a CSFs list for O2O implementation in technology, management and organization dimensions for enterprises to know how to plan and execute an O2O business model.
The previous researches, online information and the worldwide market have shown that O2O business model is worthy to pay attention. For the first research question of this study: “What are the types of O2O business models?” the study analyzed officially published data of famous case studies across industries and countries and previous literatures. The research identified five major types of O2O business models—(1) Commerce O2O; (2) Try-on O2O; (3) Promotional O2O; (4) complementary O2O; and (5) Crowdsourcing O2O. Both Commerce O2O and Try on O2O present that enterprises provide product information online (about what products best suit customers) and engage in product fulfillment offline. In addition, Try-on O2O offer customers to try on items before purchase. Promotional O2O is that enterprises attract customers to store by promoting product information to customer via smartphone and websites. We classify two subtypes of models. They are target-marketing O2O (for known customers) and alien-marketing O2O (for unknown customers). Complementary O2O offers customers a convenient and appealing shopping environment that sometimes involve technology, such as LBS technology, AR, QR code and so on. The final is crowdsourcing O2O that enterprises develop a platform to link demand-side and supply-side to share resources and capability.
Meanwhile, the implementation of an O2O project takes much time, effort and investment. The second research question of this study is to tell companies that would like to run an O2O project a critical success factors list for implementing the business model. At the beginning, we presented an initial critical success factors list from previous researchers and case studies. This study adopted Delphi approach to interact with a panel of experienced experts, a group of businessmen, to examine the initial critical success factors list and come out the final list, four
factors of technological dimension- User Interface design, Ease of use application, Accurately located function and IT load balancing capability; five factors of management dimension- Management support, Good CRM system, Strategic execution capability, Actively involve end users in solution design and Measure, monitor, and track; four factors of organization dimension- Complete staff training, Seamless the process of online and offline channels, Reinvent the company's future and Establish a clear project goal. The findings should assist business managers who would like to plan an O2O project, through the clearer understanding of their underlying causes that this study provides. In the meantime, a user survey is provides to validate the findings. The proposed critical success factors list should apply for an O2O implementation. Managers should notice no single aspect of resource but investigate technology, management and organization dimension during development period, because several factors will influence the success of an O2O project.
It is hoped that the study results will contribute to research critical success factors for O2O implementation by building an integrated list, while future research could be directed toward a clearer understanding of the measurement for succeeding in a O2O project.
5.2 Research contribution
O2O business model is popularly discussed between various industries since the Internet, mobility and social network make a great impact on customers.
However, there are few reliable literatures providing comprehensive and interesting information on O2O business model. This study expects to be a research that could provide to enterprise planning to develop an O2O business model a measurement for critical success factors of O2O project implementation and a guideline to understand the O2O business model.
5.3 Limitation and future research
1. Due to the limitation of time to do research, this study only focused on promotional O2O, one of five O2O business models. We did not research critical success factors of transaction O2O, try-on O2O, complementary O2O
and crowdsourcing O2O. The study will be more reliable if complete other types of O2O business model.
2. We cannot make certain that types of O2O business model are always five in O2O world. In the modern era, technologies application and Internet have changed customer behavior and preference in each of daily part with a fast speed. Companies have constantly finding a strategic model to enter a new market. Therefore, the O2O business model will be constantly improved and changed to another new type of O2O business model. Since that, the research should be reexamined.
3. In this study, the panel of experts is made up of management since it seems like managers have more understanding the project process with technological, management and organizational aspect and it is hard to interview different position in the O2O project without enough research time.
However, the more comprehensive and reliable information is provided by panel of experts should with different roles.
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