2020 was a climacteric year. The Covid-19 pandemic brought industries everywhere to a grinding halt and changed the way the world lives and does business. The retail industry was impacted very hard by the pandemic where the sales drastically dropped down. The bulk of whole-sellers and indirect middlemen had been eliminated from the game due to the pandemic which somehow unintentionally helped D2C (direct-to-consumer) e-commerce.
D2C brands are the ones that came up on top in retail marketing. The pandemic gave lots of chances to the D2C brands so that they can directly reach out to the customers without any physical touch (unlike how the traditional retailing process goes down i.e. sell to vendors, retailers, and resellers That's what business-to-business (B2B) usually does, in comparison to this method of retail, D2C is very convenient.
D2C brands sell their products directly to customers without any middlemen. These brands work independently and do not depend on stores or any indirect middlemen to deliver their products directly to their customers.
According to digital agency Good Rebels, “India’s digital transformation has taken off in a big way over the last several years, as of 2020, there are over 800 D2C startups in India with more than 100 million online shoppers. D2C brands are radically changing consumer preferences and expectations and use that infrastructure to grow fast and connect directly to their customers.”
The 19.2 percent growth rate is predicted in 2021. The Direct-to-Consumer Purchase Index states that in the next 5 years, around 80 percent of consumers will end up purchasing at least once from D2C brands.
Correlation with Customers - Any relation between 2 different parties is created through communication. Even in the retail industry, communication is the key to build a direct relationship between the manufacturer and the customer. As we already know that D2C manufacturer has a direct relationship of communication with its customers, unlike the old traditional retail method where there is no direct communication due to so many hindrances between the manufacturer and the buyer. Customers love to be in touch directly with the manufacturing brand. The engagement of the customers allows the brand to grow through word-of-mouth and generates trust amongst the community members, which helps in increasing the customer base.
Say No To Middlemen – In the D2C business model, the seller is the one who directly sells and delivers the product to the consumer, without any interference of a middleman. They do not follow the traditional retail process. The D2C brands don't have to rely on conventional stores, shops, or any other middlemen for delivering their products to the buyers which allow D2C companies to sell their products at lower costs than traditional consumer brands and to maintain end-to-end control over the making, marketing, and distribution of products.
Revealing Brand Stories through Advertisement - Offline sales have reduced rigorously due to the pandemic where online sales skyrocketed. Owing to this, brands saw the potential of online marketing, Many D2C brands started investing more in the digital advertisement which improved return on expenditure and higher sales as well.
Video is the number one way consumers discover a brand before they make a purchase. It is the ideal marketing medium for the D2C industry, brands can use videos to incline an emotional response and engage customers online.
In the personal care category, for example, we can see mCaffeine (which was launched in 2016). mCaffeine, has sold more than 2.8 million products in just 4 years of launch by investing more towards digital ads which enhanced return on expenditure along with higher sales as well.
Shaping Up The Costs And Prices - D2C businesses can charge lower prices as compared to traditional retail businesses. As there are no middlemen and many D2C brands save up a lot of margins which can be used by them to provide some attractive discounts which attract a large number of customers to their products. When companies have control over what they sell then they also have the power to create unique offers and combos that helps to increase the profit margins and stock clearance.
Surfing The Omnichannel Waves - A huge benefit of the D2C e-commerce strategy is that manufacturers get complete control of all their activities, from packaging to marketing. Unlike traditional marketing, many brands have opted for different channels to connect with their consumers. Customers can use any type of medium, such as Facebook, Instagram, Whatsapp to find different D2C brands pages and directly contact the manufacturer for any queries regarding the product or the company. Brands also get direct feedback which helps them to improve their services.
Moving forward, it is evident that D2C is going to become bigger. Moreover, a contactless world (which has become a norm) has further given the D2C space an impetus.