The Rise Of The D2C Model In India

The growing demand for online shopping and convenient deliveries has brought about a new revolution in the consumer goods and retail supply chain. While traditional mom-and-pop storekeepers have started selling products digitally, big-scale retail brands and consumer goods manufacturers have adopted the direct-to-consumer selling model in order to fulfill customer demands.

Direct-to-consumer or D2C selling is a fast-track retail model wherein brands sell merchandise directly to consumers through an online storefront, without involving intermediaries such as wholesalers or distributors. Brands sell directly to consumers via in-house fulfillment centers, e-commerce marketplaces, or with the help of third-party logistics providers.

Why are Brands Gunning for this Business Model? 
Going D2C has several advantages, and retail brands are stepping up to meet the evolving needs, expectations, and behaviors of the tech-savvy, post-pandemic consumer. 

Cost-Effective Retail Distribution - By implementing a D2C distribution model, enterprises can save the logistical costs involved in the secondary mile, by avoiding shipping and transporting to wholesalers, and directly shipping goods to customer locations. Companies also save the added cost of beat planning and sales reps visiting retail stores to replenish stocks. 

Safe Doorstep Delivery - Post the pandemic, consumers are concerned about the quality and safety of the things they are buying and the way they are handled. In D2C distribution, goods are shipped and delivered directly from the manufacturing location to the consumer’s address, minimizing the number of places a package travels to and the number of people who handle it. 

Brand-Consumer Relationship - D2C allows brands to offer customers personalized product options, resolve issues quicker, and ensure a satisfying fulfillment experience. It also allows consumers to know the brand well, share their shopping experiences, product feedback, and grievances directly with the brand. By selling directly to consumers, retailers can build stronger relationships with their customers as well as an improved brand image in the market.

Faster Last-Mile Operations - In D2C distribution, manufacturers and big retail brands simply take orders online and deliver faster, using their own logistics arms or with the help of 3PL distributors. By skipping middlemen involvement and wholesaler distribution, enterprises can speed up the last-mile delivery process by shipping goods to consumers directly as and when an order is placed.

What are the Supply Chain Challenges in D2C Selling?
The D2C model has various benefits but there are also some logistical challenges brands must consider:
Supply Chain Visibility - When customers purchase from a brand, they expect complete transparency from the seller. They want to know when their order is shipped, where exactly their order is in transit, and who is handling their delivery. If a D2C brand does not have an efficient delivery tracking system, they might not be able to establish this transparency with their customers and makes it difficult for logistics managers to monitor on-ground operations, and take preventive measures in case of any deviance from planned delivery schedules. 

Fleet Utilization Challenges - In order to fulfill customer demands with doorstep deliveries, companies might depend on either in-house fleet or rental fleet, based on demand fluctuations. Businesses are faced with the challenge of identifying the right mix between owned and outsourced fleets to carry out delivery operations cost-effectively while ensuring vehicle capacity utilization.

Last-Mile Delivery Bottlenecks - A shift to D2C selling comes with an underlying requirement of efficient last-mile delivery. However, many brands may be new to last-mile dynamics and challenges such as delivery route planning, rider allocation, route restrictions, customer address verification, and more. 
Competing with e-commerce giants and ensuring timely and efficient last-mile fulfillment, especially during the festive season is a major challenge ahead of D2C sellers.

What’s the Solution? 
Digitization is the need of the hour, and D2C selling is not an exception.
With logistics SaaS solutions such as route optimization, fleet management tools, and last-mile visibility tools, brands can plan delivery networks and routes optimally, reduce costs, build greater visibility in the supply chain and automate manual processes such as dispatch planning and rider allocation. 
The new ground reality also demands companies to be prepared for different scenarios and challenges in business. Logistics SaaS tools can enable businesses to come up with optimal game plans that can tackle these challenges efficiently. 

Whether planning to expand retail sales by entering the D2C market, or trying to optimize existing D2C operations, it’s essential to consider implementing intelligent logistics tech in your D2C supply chain to gain a competitive advantage while fulfilling customer expectations effectively.