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4 ways D2C brands can leverage technology to overcome supply chain challenges

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The increasing demand for online shopping, convenient and safe deliveries has transformed the CPG and retail industry. India’s mom-and-pop stores, also called kiranas, were also witnessed turning to the digital route for survival during the recent unfavourable times. Internet penetration, change in customer behaviour has led to emergence of customer-oriented business models such as D2C and omnichannel.

D2C or direct-to-consumer, as the name suggests involves selling directly to the consumer, without the involvement of intermediaries. The key players of the industry include Mamaearth, MyGlamm, Wow Skin Science, SUGAR, BoAT, Licious, Country Delight, Zivame, among others.

According to a report by a media portal, “The Indian D2C market is expected to triple from $33.1 billion in 2020 and touch $100 billion by 2025 on the back of the projection that online shoppers in India will reach 350 million by FY25, up from 128 million in FY21.”

While D2C has been in the limelight for some years now, the crisis has definitely left a significant impact on the industry. There are a number of opportunities for brands to strengthen their digital business models. Although brands and customers both benefit from this business model, eliminating the middlemen means it becomes a must for the brands to streamline their supply chain.

As technology evolves, there are ways that businesses can do this efficiently and effectively. Let us take a look at some of these modern day solutions.

Cloud-based Inventory Management

Traditional players and big brands often have a large warehouse/storage space which requires heavy investments financially. While D2C brands may lack the finances, they can switch to cloud-based inventory management solutions. These solutions are designed in such a way that it eliminates the requirement of physical warehouses or WMS solutions. 

Brands can manage their inventory online from a single location across different channels and categories. Migrating to cloud will lower the costs and also improve the accuracy as there is very little scope for stock pickup and delivery errors.

Data-driven Insights with AI 

Artificial Intelligence- almost every industry, every segment has talked about this in the past five years and now retail is all set to join the club. D2C brands must not underestimate the power of AI. The use of data analytics is immense when it comes to shopping. From gathering insights about your customer to your sales data, from market basket analytics to cart abandonment, any and everything can be analysed, evaluated and used to make your brand better.

AI- led tools can help brands study numerous parameters such as destination characteristics, the channel used to place highest orders etc. There are even tools to weed out fake buyers, spot counterfeit products that brands can invest in.

Keeping Up With Customer Demand 

Big Data, ability to analyse volumes and volumes of data and turning it into actionable insights can be a game-changer for D2C brands. It is not restricted across categories, channels or geographies. Brands can use this data to study their customer needs and keep a track of their inventories accordingly. This will lead to minimal waste as well as sustainable growth in the market. 

With the latest technology, it has become easier to study complex parameters such as customer demographics, store and brand loyalty, purchase frequency, completed transactions, abandoned products and carts etc. These data points can not only improve the efficiency of the supply chain, but also enhance CX for a brand.

Transparency With Real Time Updates

It has long been established that today’s customer is tech-savvy. They want affordability, a wide range of options, availability, and convenience all at the same time. With D2C, the customer has to be the center of attention and treated likewise.

Brands should invest in tools and solutions to streamline their supply chain. Options such as tracking orders, shipping details and real-time updates have become a vital tool for most of the businesses. This makes the entire order-to-delivery process more transparent and clear for both the consumer and the brand.

Digital has become a must and for D2C brands, logistics tech can be all they require to function effectively. Investing in technologies, automating manual processes, brands have the opportunity to reduce costs, build visibility and take charge of their buying cycle end to end. D2C businesses should fill these technology voids in the ecosystem to set them apart from the competition in a cost-effective and efficient manner.