Offline Retail With an Online Tail: Who Wags Whom?

Each shop, even the tiniest, dreams of becoming a giant with great online and offline sales. But when companies have both online and offline sales, reasonable questions come up: How do the online and offline domains influence each other? How can you profit from this influence?

The Meaning of ROPO

The research online, purchase offline (ROPO) effect describes a phenomenon when people find information and compare prices on the web before making a purchase in-store.

According to DigitasLBi, 88 percent of consumers worldwide research products online before buying offline. You can find out the percentage of ROPO purchases in your country and for your product category with Google’s Consumer Barometer.

Depending on your business goals, with ROPO analysis you can get answers to many different questions:

1. Should we involve the online channel more in our offline campaigns?
2. What’s the real return on ad spend of online ad campaigns considering offline influences?
3. Do ROPO buyers also make purchases online?
4. What prevents ROPO buyers from initially placing an order online?
5. Are we underestimating our online channel?
6. How can we save on remarketing to ROPO customers?

Most of these questions can be answered quantitatively. The overall influence of the “online tail” is calculated by ROPO analysis.

ROPO Analysis

Stages of preparation for ROPO analysis include the following:

• Combine online data with transaction data from your CRM.
• Create a segment of ROPO customers and understand the share of these purchases in terms of online and offline sales.
• Build dashboards for high-level monitoring of data and dynamics.

As you can see, this isn’t child’s play. And there are a lot of ways to come to the same truth. But any analyst who is asked to build a ROPO report for you will be glad if you collect and store both online and offline data attentively, especially in raw format.

Here’s how your CRM data and online data can be combined:

Schema for combining CRM and online data, created by OWOX BI for Rendez-Vous

The main principle of ROPO analysis is to show how online behavior correlates with offline purchases.

The orderliness of your data will affect the quality of ROPO investigations. In the end, you’ll get numerous graphs on the behavior of online and offline users, and how they correspond to each other. These visualizations and graphs can be referred to collectively as a ROPO report.

What’s the Purpose of a ROPO Report?

1. Find out the real value of advertising channels.
2. Improve marketing campaigns.
3. Increase profits.
4. Improve the online shopping experience and increase sales.

Each of these goals is achievable by different means, but a ROPO report can give you measurable metrics that will change if the company does something right or wrong.

A ROPO report for Ile de Beaute, generated by OWOX BI

For example, in the above image you can see that ROPO customers account for a large part of all offline users. That may be a surprise for companies that can’t imagine that their online advertising and long-term content strategies are really worth the money and effort. In response, they should redistribute money across advertising channels and see where investments don’t bring profit and where they should spend more to increase revenue.

With successful online advertising campaigns that consider the ROPO audience, a company might increase the conversion rate and number of transactions for ROPO customers. This can be accomplished by making it easier to buy online, as well as by offering free delivery, gifts or discounts for online purchases to those who typically buy offline. Get feedback on why people don’t like to buy online, improve your website, and see the conversion rate grow!

Key Takeaways

1. ROPO analysis demands carefully collected data and specialists to work with it. It’s worth the investment because of the problems it solves and the possibilities it opens for companies.
2. ROPO reporting identifies how online and offline advertising channels affect sales and their share of value in terms of total revenue. Furthermore, it reveals information about your customers’ behavior and buying habits.
3. ROPO reports give companies extended possibilities for segmentation and remarketing, allowing them to enrich advertising campaigns and motivating them to pay more attention to their data culture.

Have you tried to build a ROPO report? What questions would you explore with the help of ROPO analysis? Let us know in the comments section below.

Mariia Bocheva is a Business Development Executive at OWOX BI, a leading technology partner for Google in EMEA.