The Prospects for O2O in the Building Materials and Bathroom Fixtures Industry
Release Date:
2021-07-29 15:17
The Prospects for O2O in the Building Materials and Bathroom Fixtures Industry
One of the hottest models on the internet lately is the O2O model. With rising costs for brick-and-mortar stores, mounting economic downturn pressures, declining consumer demand, and increasing competition from more and more players in the market, the building materials and bathroom fixtures industry is also turning its attention to the internet. The earlier e-commerce model clearly wasn’t well suited to this sector—so how will the new O2O model fare?
O2O, or Online To Offline, refers to the integration of offline business opportunities with the internet, turning the online space into a platform for offline transactions. This concept originated in the United States. The O2O model is highly versatile, encompassing both online and offline elements, and can thus be broadly categorized as O2O. In fact, the O2O model began to emerge as early as the rise of group-buying websites; however, consumers are more familiar with the group-buying concept, where promotional offers are typically time-limited. In contrast, on O2O platforms, as long as the platform maintains ongoing partnerships with merchants, the merchants’ products can remain continuously on promotion. Moreover, O2O merchants generally operate physical brick-and-mortar stores, whereas this is not necessarily the case for merchants in the group-buying model.
The O2O e-commerce model requires five key components: a standalone online mall, national-level authoritative industry trust certification, online digital advertising and marketing promotion, comprehensive social-media engagement and online customer interaction, and an integrated online–offline membership marketing system. A business that operates both an online mall and physical brick-and-mortar stores, with identical pricing across all product categories in both channels, can be classified as O2O; in the building-materials and bathroom-fittings industry, this model is generally well-suited to meet these requirements.
The building materials and bathroom fixtures industry has long relied on a franchise-and-store model, whereby consumers can only purchase sanitary ware products at retail outlets, and after-sales service is also handled by these same outlets. This agency-and-franchise model has been the norm in the sector for many years. However, in today’s internet era, this business model is facing significant challenges: high investment costs for brick-and-mortar stores, shifting external market conditions, the rapid rise of e-commerce, and evolving consumer preferences compared with the past.
There are indeed some companies in the bathroom industry that have ventured into e-commerce, but they keep making negative headlines. Instead of reaping benefits, bathroom manufacturers end up offending long-term distributors and leaving consumers dissatisfied. The root causes can be summarized in three aspects: high logistics costs; the need for professional after-sales service and a poor shopping experience for consumers, as there is often a discrepancy between product images and the actual items; and the fact that products like laundry cabinets, simple shower rooms, and bathroom vanities require professional installation. For instance, consumers are easily deceived by unscrupulous sellers when purchasing stainless steel bathroom vanities, who may cut corners on materials. In short, the overall attempt to digitize the bathroom industry has failed.
The emergence of the O2O model has been hailed by many in the building materials and bathroom fixture industry as tailor-made for the sector. It resolves the conflicts between manufacturers and distributors while opening up new sales channels. Over the past two years, numerous large building materials and bathroom fixture companies have experimented with this new business model; although significant breakthroughs have yet to materialize, it has nonetheless provided valuable guidance for many enterprises.
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