Examining the Adoption of Online-to-Offline (O2O): Facilitating and Impeding Factors

The online-to-offline (O2O) business model is rapidly growing among organizations, yet current knowledge on O2O adoption is predominantly individual focused, with little research on organizational adoption and the factors driving adoption. To address this gap, underpinned by the diffusion of innovation (DOI) theory, this study collected qualitative data (24 semi-structured interviews), which were analyzed using content analysis techniques. We found that offline service quality and social network prosperity are some of the factors driving O2O adoption. Surprisingly, inefficient offline marketing was also found to drive O2O adoption, which indicates new challenges posed by the growing online business environment. We found that not all factors can be categorically classified as facilitating or impeding adoption, as some factors (such as operational challenges and costs) could play dichotomous roles of facilitating or impeding in the context of peculiar circumstances. For example, we found cost to be an impeding factor, yet the results also indicated the benefits of cost reduction resulting from O2O adoption, thereby rendering cost a contentious issue. This study extends the application of DOI theory to the O2O adoption stage, and identifies a number of new factors associated with internal/external organizational characteristics, as postulated in the DOI. Managerial implications are discussed.