Brands across the country wondered what to do next and how to reach consumers as the pandemic severely disrupted their supply chain and logistics. Keeping abreast of the change in consumer behaviour, who ordered most things online, the industry saw the adoption of the D2C model. Today, we witness a new generation of digital-first brands who engage with their customers directly and save a lot on the cost of their products. Earning more profits due to the elimination of the middlemen, there are more than 800 D2C brands in the country as per a KPMG report with the sector valued at $44.6B in 2021 and projected to reach $100B by 2025. It’s a market whose future looks extremely bright due to the growth in eCommerce and more new-age digital-first Indian consumers.
Having found their feet, all eyes are on how D2C brands will create better possibilities and channels in 2022 to prosper with customers amidst the global competition.
Sticking to a winning formula
Today, D2C companies are challenging their traditional counterparts by leveraging social media and influencer marketing to expand their reach. With data being the new currency, they’ve used analytical tools to rope in repeat customers and implemented automation across verticals that include – product development, marketing, sales, and logistics – to improve customer service. Furthermore, adopting an omnichannel strategy has helped them stay in constant touch with their target audience and receive feedback. As more brands go down this route, it is a trend that will separate the best from the rest.
After tasting success in the metropolitan cities, these D2C market players plan to extend their reach to tier-II and tier-III cities. There is an immense potential in these cities that businesses need to unlock. Just like e-commerce, many in the industry believe that the growth of the D2C market will eventually trickle down from metros to smaller towns and cities.f
The D2C ecosystem can achieve further success by enhancing its brand-customer relationship and providing consumers with a convenient and faster payment method. This is where Fintech will help aid the growth by offering a variety of payment methods to make the shopping experience smoother. Brands must also focus on scaling their technology as it will help reduce costs and achieve high profitability with improved return on investment.
Virtual clienteling will come to the fore as 5G and mobile shopping play an instrumental role in facilitating live purchases and video commerce. With retention being the biggest challenge, going down this route will help develop confidence amongst customers that stays even after the purchase. As competition gets more intense, companies will need to keep their price at par and improve their quality and customer service to stand out from the crowd. With fitness and wellness playing a key role in the consumers’ choice today, we will see D2C brands focusing on sustainable packaging and health-conscious products.
Boost in the e-commerce industry
Fueled by over 650mn internet users in India, e-commerce is at an all-time high, with more brands seizing the opportunity to reach users through D2C. It has brought a new outlook to traditional marketing tools by reaching out directly to the customers. With consumers preferring customized solutions and purchasing products without having to step out of their homes, D2C offering the best of both has seen it rise in popularity. By focusing on product customization, digital solutions, loyalty programs, quality enhancement, each of these brands today provide a holistic customer experience to their buyers.
Having realized that experience and emotions are an important part of what they offer, social commerce has become a gold mine for Indian D2C brands. They are creating content that gives consumers an experience of purchase without directing them to another platform. This has helped foster an emotional connection where they know that their attention and presence are being valued immensely. The result of which is a cohesive brand experience created across channels and an increased customer journey.
2022- an important year for the D2C ecosystem
While the past two years were all about D2C brands increasing engagement and attracting consumers, 2022 will see them be concerned with retaining and minimization of losing them. It’s one of the most crucial years for the industry as they must provide personalized attention to their audiences that will eventually help in strengthening their relationship.
Quickly becoming one of the most popular ways for businesses to expand globally, D2C will continue to grow and evolve in 2022. As a result, brands with the right tools, knowledge will stay ahead of the game in an ever-changing landscape.