5 Trends in the D2C Segment to Look Out for in 2022

According to the Direct-to-Consumer Purchase Index, within the next five years, about 80 percent of consumers will be buying from D2C brands at least once.
5 Trends in the D2C Segment to Look Out for in 2022

Malls and markets were once the favorite haunts of shoppers. And then they moved to online shopping, which also resulted in the emergence of new platforms every now and then. But the digital revolution, which was fast-forwarded by the pandemic, is now transforming consumer buying behavior and habits. Thanks to these trends, 2021 saw more consumers taking to D2C (direct-to-consumer) brands. 

Social media platforms such as Facebook, Instagram, WhatsApp, and YouTube are further fuelling D2C sales as digitally-savvy, upwardly-mobile buyers look for bespoke, high-quality products. As traditional players lack a significant D2C presence, the gap is being plugged by new-age brands that prefer directly reaching out to consumers. Thereby, legacy sales and marketing channels, including middlemen, are being bypassed, helping brands lower their selling costs while benefitting buyers through lower prices. 

As almost all these brands don’t adorn store shelves or get endorsed by celebrities, it helps them save on marketing expenses and sales commissions. Most brands focus on organic ingredients and sustainable packaging to offer customized products backed by prompt direct deliveries to customers. The categories range from personal care, coffee and cosmetics to electronics and interior décor items, to mention a few. 

Going by an industry report, the country had more than 800 D2C start-ups with 100 million-plus online shoppers. According to the Direct-to-Consumer Purchase Index, within the next five years, about 80 percent of consumers will be buying from D2C brands at least once. Driven by these tailwinds, the D2C market is slated to be valued at more than $100 billion by 2025. 

Although the pandemic disrupted the supply chains of traditional products, the D2C entities continued selling since their customers only required smartphones to browse and buy choice goods. 

When D2C firms first appeared a decade ago, they sold mainly via third-party portals such as Flipkart, Snapdeal, and Amazon. In recent years, platforms such as Delhivery, Shopify, and Dukaan have enabled brands to create digital storefronts. In fact, SaaS platform Dukaan aims to host 20 million merchants’ digital stores by the first half of 2022 while facilitating digital cataloging and inventory management. Whereas such platforms provided D2C players with the digital infrastructure, payment ecosystems such as UPI and digital wallets ensured seamless online transactions. 

Not surprisingly, considering the low entry barriers because of digital distribution, D2C companies are willing to experiment and provide consumers with a bouquet of new offerings. Given the instant, real-time feedback from customers via reviews, page views, conversion rates, and social media activity, these brands are in a position to tweak their products depending on consumer preferences.  

Witnessing the soaring success of D2C brands, even large FMCG players have deployed digital strategies to directly reach customers. Besides making their operations more cost-effective, FMCG firms have been able to reach out to consumers faster while providing them with a more seamless and enjoyable shopping experience. What’s more, D2C transactions provide a treasure trove of real-time consumer data, which includes their shopping habits and allied preferences. 

Buoyed by these advantages, the D2C domain is poised to witness some interesting trends in the days ahead. The key ones include: 

Personalized Marketing: The collation of customer data in real-time, including their online habits and purchase preferences, allows D2C companies to provide highly-personalized experiences. Through big data analytics, customers can then be segregated based on their behavior, which helps in promoting personalized deals and marketing content. By boosting consumer loyalty and LTV (lifetime value), these enjoyable experiences help maximize profits. Taken together, such measures can lower overall marketing costs by up to 20 percent and drive a 10-15 percent surge in sales conversions. 

Social Media Influencers: Brands with budget constraints that preclude traditional advertising now use influencer marketing, which is more cost-effective. The advent of social media platforms has fostered a new generation of digital world celebrities with a significant fan following across diverse channels. Whether it is skincare, healthcare, hygiene, makeup, innerwear, nutrition, apparel, and more, endorsement by social media celebs inflates brand credibility among their followers. These endorsements advance more customer conversions across metro and non-metro areas, increasing market penetration. 

Extended Reality: This term encapsulates VR (virtual reality), AR (augmented reality), and MR (mixed reality), all of which facilitate an interactive shopping experience. For example, AR and VR provide prospective purchasers with a try-on experience before buying a product. Often, interactive shopping experiences are likely to nudge customers to purchase an item. 

Mobile Apps: Statista reveals that 72 percent of Indians utilized mobile apps to browse and shop in 2020. In 2022, D2C brands will leverage mobile apps to push faster customer acquisition while offering an interactive, immersive and personalized shopping experience. These factors will generate greater customer loyalty and retention rates. 

Video Marketing: Video is emerging as a key means for customers to explore a brand before buying. It’s also an apt marketing medium for D2C players since videos can be used to trigger an emotional response while engaging prospective buyers online. But video marketing isn’t restricted to YouTube only. For instance, brands could hold a live video broadcast on Facebook, Instagram, or LinkedIn. 

Meanwhile, it should be noted that D2C brands are not precluded from using conventional modes too through a multichannel approach, signifying a mix of online, offline, and the brand’s platform. The overriding aim will be to enhance customer convenience and comfort. Therefore, apart from social media platforms, customers could connect with D2C brands via their phones too. 

Ultimately, the multichannel mode will help D2C players push scale through higher customer connect and brand loyalty – the trump card of these new-age brands. 
 

Malls and markets were once the favorite haunts of shoppers. And then they moved to online shopping, which also resulted in the emergence of new platforms every now and then. But the digital revolution, which was fast-forwarded by the pandemic, is now transforming consumer buying behavior and habits. Thanks to these trends, 2021 saw more consumers taking to D2C (direct-to-consumer) brands. 
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