How Retailers are Reinventing their D2C Businesses

The reinvention of the D2C business is all about building an intimate understanding of your customers in much the same way as the neighborhood store but through technology and digital experience.
How Retailers are Reinventing their D2C Businesses

The technology revolution ushered in a few decades ago by the spread of accessible internet brought with it new business models for sales and marketing of goods, and possibly the first big shift in several centuries to the way people shop. On the one hand, the rapid growth of horizontal ‘everything’ stores such as Amazon shook traditional brick-and-mortar businesses, forcing them to either adopt new business models embracing the internet or face a slow but certain demise. On the other, the ability to engage with individual consumers, rather than mass audiences, has dramatically changed the way brands and retailers communicate with, and market to, audiences.

These seismic shifts have led to the development of various business models as brands and retailers have scrambled to adapt. One of these has been a reinvention of the Direct to Customer or D2C model. For a single small traditional neighborhood store, every sale is direct to a (most-often) known customer. The store knows what its customers buy, how much, and when. What is most attractive to them, what makes them change their mind, what makes them spend more. But what about national and international retail-led brands with large numbers of stores?

The reinvention of the D2C business is all about building an intimate understanding of your customers in much the same way as the neighborhood store but through technology and digital experience. 

The first step has been the building of a unified omnichannel experience, which allows consumers to shop from the comfort of their homes with an experience as close as possible to the experience of a physical or brick-and-mortar store. And vice-versa. Features such as seamless exchanges and returns and easy refunds and replacements have become almost a hygiene factor for the new D2C brands. And this has what we at Chumbak have done across our 70+ stores across India.

The essential operational step is integrating the logistics and supply chain across marketplaces such as Amazon and Myntra with the company’s own website and retail stores. At Chumbak, we have done this on a Uniware omnichannel platform: a single dashboard gives us a centralized view of orders and inventory by merging all offline and online sales channels, along with providing an AI-based robust order allocation engine to significantly reduce order fulfillment time.

The next big step is using data to understand customers, whether they shop in our stores or on our website. Customers (and visitors) generate huge amounts of data as they shop in your stores, browse your site or stop by a digital advertisement. With robust privacy safeguards, we at Chumbak use such data to understand consumer behavior, trends, shopping preferences, and so on. A number of tools have been led to the traditional CRM framework being invented for the D2C business: for better search and recommendation, for example, so prospective customers are shown what is most relevant to what they are looking for based on browsing and shopping history and other data points in their journey.

And lastly, the growth of the new models in D2C businesses has led to the development of a lot of brand-new optimization technologies and tools. These tools allow companies to test and optimize their sites, their navigation, their site content, their media spends…while dealing with a sea of data.

As D2C brands realize that internet-only and physical-store-only models are not durable, the debate or question of choice between the two has been sorted: brick-and-mortar stores provide the necessary consumer touch-and-feel experience and reassurance, while digital provides the convenience. The Covid-19 experience has led all brands to move faster to the more unified new world, to rethink the role of each channel, and indeed their product lines.

Finally, the rise of digital and social media has meant that brand-to-consumer communication is no longer one-way, but a conversation. It has also meant that D2C brands have to seize the opportunity of explosive growth with positive viral communication while managing the risk of an equally rapid fall should they under-deliver to their promise or indeed offend even a small section of their consumers. 
 

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