Opinion: 4 trends shaping Indonesia’s O2O landscape

Online-to-Offline (O2O) is a burgeoning marketing strategy in Indonesia, with the potential to bridge trust gaps and drive online and in-store purchases. It also provides micro, small and medium-sized enterprises the ability to showcase their products under one roof, a feature that is particularly useful for a country whose residents live across 17,000 islands with undeveloped infrastructure in non-urban areas. With companies such as furniture marketplace Dekoruma and eCommerce platforms JD.id and Bukalapak looking to differentiate themselves through offline retail experiences, O2O is an opportunity for retailers to prove consistency across channels, grow brand awareness and develop customer loyalty.

O2O will be an important part of driving conversion with Indonesian consumers. Though eCommerce penetration in the country is higher than the US or France, according to 2021 statistics from Momenum Works, there are still fundamental challenges of shipping, customer service, payment, and ad targeting that need to be addressed before Indonesia’s marketers can fully realise O2O’s potential in driving sales.

1. “When will my package arrive?”

Indonesia has an unreliable supply chain ecosystem due to a lack of transportation infrastructure and complicated regulations. Customers experience long shipping and product delivery times, and high shipping fees that deter them from making online purchases. With the rise of third-party logistics firms such as J&T, JNE, Grab and Gojek, customers are seeing reduced shipping time. In-house logistics would also reduce or eliminate shipping fees for customers.

The O2O solution: Communicate the benefits of your logistics ecosystem. Publish robust, transparent and hassle-free product return guidelines on eCommerce websites so that customers can be assured that products can be quickly and easily returned if they are unsatisfied, including services such as free pick-up of the returned item.

2. “Can I pay without cash or card?”

Conventional methods of payment, such as cash, debit or credit card, have decreased considerably in terms of use. Preferences are shifting towards digital wallets and cashless payments using QR codes. Buy Now Pay Later schemes are also popular with Indonesians, allowing them to purchase products while settling the payment in interest-free instalments within an agreed timeframe.

The O2O solution: Promote the ability for customers to pay and collect goods in-store and give discount codes that can be used in-store to drive conversions. Also, provide the ability to confirm the legitimacy of the promotion and reservation of product by calling sales staff. When it comes to purchases of big-ticket items such as electronic goods, mobile phones, and computers, enable cash on delivery. Cash on delivery will be the preferred payment option when buyers want to inspect the goods without committing to making the payment.

3. “Who can I speak to?”

Customers expect to be able to converse with sellers on chat platforms and chat features have been replicated by online marketplaces, such as Shopee and Tokopedia. Businesses are also experimenting with livestream functions on social media platforms to allow customers to chat with sales staff and inspect products before purchase.

The O2O solution: Prove product quality on eCommerce websites with customer reviews, product videos, and demos. Customers should be allowed to call and interact with sales staff on livestream or chat functions to ascertain the quality of the product.

4. “How can I find the right product?’

Precision targeting users based is still underdeveloped across many eCommerce platforms and retailers. Users can be targeted based on their internet browsing activity. This can measure interest for categories with a high tendency to be researched first on the web before purchase. For more commonly bought categories, which lack many online activities to detect interest for them, users can be targeted based on their purchase data and profile.

The O2O solution: An integrated MarTech stack will enable brands to seamlessly capture information from online and offline interactions to improve ad targeting and precision marketing.

The writer is Anne Ridwan, country director, R3 Indonesia.

Photo courtesy: 123RF

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