Direct-to-consumer (D2C) as a business model has gained much traction in the last few years. It has become a challenging player from a niche segment, redefining India's retail narrative. Apart from that, the endless benefits it offers directly to the consumers have also led to the popularity D2C has achieved over time. It has helped build direct relationships with consumers and scale operations. Apart from this, testing is the key! There isn't a one-size-fits-all solution here, so it's important to discover a method that suits you best whether it’s your content, branding, or product strategy.
Choosing the D2C business model is an excellent relief for any brand. Regardless of the size, area of operation, or industry, a D2C approach can make a difference in determining the success of any brand. For starters, you can save huge on the margins and sell products at much lower costs to the end consumer. Secondly, you'll have better control over manufacturing, supply, distribution, and fulfillment channels by selling directly to consumers. And most significantly, you can connect better with customers by delivering them a personalized omnichannel voyage.
While there are a lot of trends and innovative strategies that have the potential to affect the way the D2C market operates, I would like to mention a few which I believe are essential:
- Innovation has to be pervasive and a mindset or culture in an organization.
- With social media and influencer marketing, D2C companies are expanding their reach to compete with their traditional counterparts. They've enforced automation across verticals, including product development, marketing, sales, and logistics, using analytical tools to improve customer service. Innovation can help improve every function, whether revenue-generating or not.
- Innovation also comes from collaboration, autonomy, and design thinking. It is required to constantly streamline operations and unite with partners to ensure better and more efficient use of capital.
- Innovation through the use of modern technologies and data is vital for the brand's survival and expansion. The rise of e-commerce marketplaces and online shopping allowed brands to expand faster than ever.
- Innovation is at the core of it all. Brands must be driven by both content and design. Whether a challenge involves a product, communication, creativity, operations, or logistics, divergent thinking can be used to tackle it.
- D2C brands disrupt categories by creating new experiences, innovating products and services, and exploring new distribution channels.
- Innovation through outsourcing is a common practice in business today in lieu of which brands get fresh, new content that they can use for their own marketing campaigns. Partnering with third-party publications enables brands to explore new opportunities and innovate.
Brands still need to consider the D2C model risk of losing loyal customers whose behavior and expectations have changed. A Statista report suggests that 55 percent of buyers now prefer to shop directly with the brand compared to multi-brand retailers. Another 50 percent prefer to visit brand websites for comprehensive product information.
Digital-first D2C brands now have a more extensive and more accessible consumer base to tap into. In addition, the power of new-age technology, such as AI and other aids, can enhance the consumer experience while amplifying visibility.
D2C market players are extending their reach to Tier II and III cities after experiencing accomplishments in metropolitan cities. Therefore, businesses must unlock the potential of these cities. Like e-commerce, many believe D2C will eventually spread from metros to smaller towns and cities.