How D2C brands are Disrupting Traditional Retail in India

D2C brands have gained enormous popularity in recent years with the advent of the digital era. Some of the major driving forces behind this traction are the increase in usage of the internet and the COVID-induced dependency to purchase online. With the immense push to Make In India and homegrown brands, the category has significantly garnered ample support. The D2C brands are disrupting the traditional retail experience for customers with an omnichannel approach, performance marketing, seamless shopping experience, personalization, brand awareness, and faster time to market among others.

Several industry reports have suggested that India is home to over 800 D2C brands. Another report by Redseer Strategy Consultants mentioned that India's e-commerce Industry is expected to overdo 10 billion shipments by FY28 at a minimum compound annual growth rate (CAGR) of 20 percent.

The colossal community of D2C brands is diminishing the role of intermediaries to connect directly with customers. The Internet gives access to digital technology advancements and analytics which gives greater control over the customer experience and the ability to offer more. In this cut-throat competition, D2C brands can understand their customer better and faster to keep them akin to their product and brand. The power of digital, social media, and influencer marketing, in turn, allows them to receive immediate validation and tap into a larger customer base. As a result, a larger number of brands are opting for the D2C model to get a sizeable consumer base in India.

Factors responsible for the growth of D2C Brands:

The differentiating factor:

The D2C industry is mushrooming rapidly, implying that the competition is getting stronger every day, hence D2C brands have to quickly understand their customers and innovate their offering to create a differentiating factor. Focusing on quality, innovation, sustainability, price, and a seamless shopping experience is key.

Indian-grown D2C brands have better intel on the genesis of the market and users, which helps in curating a proposition better accustomed to the consumers. With a mammoth of customer data available online, D2C brands can easily identify the gaps in the market and product and innovate at the earliest. It also helps them to identify a specific trend or demand in the industry and use it to their benefit.

Leveraging social media platforms, influencers, and available data to their advantage, brands can create user-generated content to spread the ‘right’ word about their products and give their brand the ability to offer a unique value proposition to consumers that is difficult to replicate by traditional retail channels. As a result, they capture a lion’s share of the market and retain customers.

Bringing a seamless customer experience from offline to online:

In today’s fast-paced world, you need to be able to access whatever you want, whenever you want.

One of the biggest reasons behind shopping online is a convenient shopping experience: 24/7 access to products, fast delivery, hassle-free returns, and a personalized customer experience. Customers can shop anytime, from the comfort of their own homes or while on the go, without having to visit a physical store and still have access to a wider range of products at a click of a button.

Today D2C brands have decoded the most important aspect of the business – to offer a consistent and easy customer experience online, which is equivalent to or better than offline shopping. Overall, a seamless customer experience is a critical component of a successful D2C brand, customers want to interact with a company and its products or services in a smooth and effortless way, as this helps build customer loyalty, increase engagement, and boost sales.

Key factors that contribute to a high-quality D2C customer experience:

• Multiple channel customer service: Customers should be able to access information and resolve issues via their preferred mode: email, phone, chat, etc. A high-quality D2C customer experience requires a combination of user-friendly technology. They don’t like to wait to get their issues resolved. D2C brands are leveraging conversational chatbots on their website and WhatsApp to resolve queries. They are also using AI-generated smart and prompt responses to address any issue/post on social media to mitigate any possible concern. The use of technology is helping these brands to take informative action and instantly connect with customers across platforms.

• Try before you buy: A marketing strategy where customers are able to try products or services before making a purchase. This strategy has become increasingly popular in the age of e-commerce, as it allows customers to experience products in a more tactile and immersive way. TBYB enhances the customers' experience, reduces risk, and leads to higher conversion rates and hence helps in winning the trust of the customers and creating a community of brand loyalists, who will later use online channels without hesitation.

• Trust and Transparency: D2C brands must be transparent about their practices, including pricing, shipping, product quality, delivery time, etc. This helps set realistic expectations and fosters loyalty over time with customers.

• Payment methods: The D2C brands offer a range of payment modes to cater to the diverse preferences and needs of customers along with easy pay-on-delivery and bank offers. The tie-ups with BNPL players have made it much easier for D2C brands to acquire customers and offer a seamless shopping experience.

• Return Policy: Today’s customer is well-informed and knows it all. They are cognizant of all aspects of making a purchase. Before adding any product to the cart, they check the return policy and guidelines. For a brand focused on retaining customers, easy pickups, quick returns, and quick transfer of money, are some of the key components of the policy they look at.  A favorable return policy can increase customer satisfaction and loyalty, while a restrictive or unclear policy can lead to frustration and dissatisfaction. It’s always important to have a transparent and customer-friendly return policy to enhance the D2C experience by giving customers confidence in their purchase decision.

• Marketing gimmicks: D2C brands have understood the power of marketing and connecting with customers on social media channels. In today’s time, social media, and digital marketing gimmicks play a pivotal role in customer acquisition and help brands differentiate themselves from competitors while building a loyal customer base.

With the wealth of customer data, D2C brands create highly targeted marketing campaigns. The brands are using a 360-degree marketing approach to be seen everywhere. Several brands are investing heavily in influencer marketing to win a fair share of customers. Partnering with influencers who share a brand's value and target audience, helps build credibility and trust with potential customers. By understanding its target audience and using tactics that resonate with them, brands are able to create a strong brand identity and drive growth in competitive markets.

In conclusion:

D2C brands are disrupting traditional retail in India. Several factors such as digital technology advancements, increased demand for convenience, lower barriers to entry, direct customer relationships, and changing consumer behavior will continue to fuel and disrupt the market. Today, D2C brands are providing a perfect integration of unique and high-quality products at competitive prices, while offering consumers a more convenient, personalized, transparent, and affordable shopping experience.

Leveraging technology, customer data analytics, and insights to understand customers better is key and must be constantly used in innovation and adaptation to stay ahead of the curve. Brands must deliver on these key factors, have a proactive approach, and stay in tune with their customers. This is the only way to stay ahead of the competition and meet their customers' evolving needs and preferences. The brands that can achieve this will build a loyal customer base and achieve long-term success in this disruptive market.