Over the past year, consumers have become warier of stepping out of their homes to make purchases and have opted for shopping from the safety and comfort of their homes. This has created a significant surge in the adoption of D2C in the country. When it comes to e-commerce, India has been at the forefront of growth and disruption of the sector, being one of the fastest-growing markets in the world. D2C brands, especially those adapted to the digital landscape and taken to online selling, can rapidly scale their business.
Additionally, the rise of D2C has gone above and beyond a means to directly reach consumers. For retailers, the changing tide has increasingly led to the adoption of the D2C route to seek better opportunities for customer acquisition and retention. Here’s why:
Elimination of Middlemen - In the traditional way of doing business, retailers always had to rely on middlemen to ensure that goods reach customers. However, with the D2C model, retailers can now reach their customers directly without the need for middlemen, making their business less time-consuming and more cost-efficient.
The Post-Pandemic Effect and the E-commerce Boom - The pandemic has undeniably left the world reeling with its impact. For the retail segment, particularly offline retailers, the crisis was a devastating blow for businesses. Many retailers had to shut shop with multiple lockdowns while others struggled to adapt to the new normal. During this arduous time, D2C began emerging as an almost sure-shot way for retailers to regain lost customers, acquire new ones, and offer their business a much-needed boost to be on the road to recovery.
Furthermore, even before the COVID-19 pandemic, India’s e-commerce sector had begun to gain immense traction as people swayed from physical shopping and gravitated towards online shopping. The pandemic accelerated this adoption of e-commerce and India, today, is one of the fastest-growing e-commerce markets in the world with an estimated 330 million online shoppers over the past year. Specially, with people apprehensive about in-store shopping, e-commerce, and D2C channels, it has now become some of the most efficient ways for retailers to acquire customers as they turned to D2C brands to purchase everything – be it essential items, apparel, or home appliances/ decor.
Enhanced Customer Engagement and Brand Identity - As mentioned earlier, the D2C model of business allows the elimination of middlemen, thereby enabling brands to better engage with customers directly. Moreover, the advent of advanced digital channels such as social media has further facilitated customer engagement for retailers adopting the D2C route. With D2C, retailers can also enhance their brand identity, making their brand more visible to customers, thereby boosting business. Given this increased access to engaging with the customer directly, retail brands are now empowered to gauge an in-depth understanding of customers’ needs and preferences and design products accordingly, making room for increased customer acquisition, satisfaction, and retention.
Added to this, the digitization of currency fuelled by the pandemic has further pushed retailers to switch to the D2C business model to adapt to the new normal. Without this shift, a majority of retailers would have become redundant as 80 percent of them operated in a cash-driven economy.
Besides the aforementioned benefits, D2C also offers a reduced time to market, allowing retailers the flexibility to launch products on a smaller scale and establish a market growth plan accordingly. Retailers would also be able to make alterations to their products faster to better suit customers’ needs.
However, having said the above-mentioned reasons as to why retailers are opting for the D2C route, D2C goes above and beyond merely setting up an online store. Players in the retail sector need to understand the market, constantly analyze performance, and engage customers across channels to keep business booming. Given India’s newfound affinity towards the D2C model, it is likely that this shift will prevail for the foreseeable future.