2020 was a climacteric year-The Covid-19 pandemic brought industries everywhere to a grinding halt and changed the way the world lives and does business. The retail industry was impacted very hard by COVID, where sales have drastically dropped. The bulk of whole-sellers and indirect middlemen had been eliminated from the game due to the pandemic, which somehow unintentionally helped D2C (Direct-To-Consumer) E-Commerce.
D2C brands are the ones that came out on top in retail marketing. The pandemic provided numerous opportunities for D2C brands to directly reach out to customers without the need for physical contact (as opposed to the traditional retailing process of selling to vendors, retailers, and resellers).That’s what business-to-business (B2B) usually does. In comparison to this method of retail, D2C is very convenient.
D2C brands sell directly to customers without any middlemen. These brands work independently and do not depend on stores or any indirect middlemen to deliver their products directly to their customers.
According to Good Rebels, “India’s digital transformation has taken off in a big way over the last several years. As of 2020, there are over 800 D2C start-ups in India with more than 100 million online shoppers. D2C brands are radically changing consumer preferences and expectations and they are using that infrastructure to grow fast and connect directly to their customers.
The growth rate in 2021 is predicted to be a further 19.2%. The Direct-to-Consumer Purchase Index states that in the next 5years, around 80% of consumers will end up purchasing at least once from D2C brands.”
1. Correlation with Customers
Any relation between two different parties is created through communication. Even in the retail industry, communication is the key to building an indirect relationship between the manufacturer and the customer. As we already know, D2C manufacturers have direct relationships with their customers, unlike the old traditional retail method where there is no direct communication between the manufacturer and the buyer. Customers love to be directly in touch with the manufacturing brand. The engagement of the customers allows the brand to grow with word of mouth and generates trust amongst the community members, which helps increase the customer base.
2. Say No To “Middle-Men”
In the (D2C) business model, the seller is the one who directly sells and delivers the product to the consumer, without the interference of a middleman. They do not follow the traditional retail process as D2C Brands are all online business modules. The D2C brands don’t have to rely on conventional stores, shops, or any other middlemen to deliver their products to the buyers, which allow D2C companies to sell their products at lower costs than traditional consumer brands and to maintain end-to-end control over the making, marketing and distribution of products.
3. Revealing Brand Stories through Advertisement
Offline sales have been reduced rigorously, Due to the pandemic where online sales skyrocketed; brands saw the potential of online marketing. Many D2C brands started investing more in digital advertising, which improved return on expenditure and higher sales as well.
Video is the number one way consumers discover a brand before they make a purchase. It is the ideal marketing medium for the D2C industry. Brands can use videos to evoke an emotional response and engage customers online.
In the personal care brand, for example, we can see mCaffeine (which was launched in 2016). mCaffeine has sold more than 2.8 million products in just four years since its launch by investing more in digital ads, which has enhanced return on expenditure along with higher sales as well.
4. Shaping Up The Costs And Prices
Many D2C businesses can charge their buyers lower prices as compared to traditional retail businesses. As there are no middlemen, many D2C brands save up a lot of margins which can be used by them to provide some attractive discounts which attract a large number of customers to their products. When companies have control over what they sell, then they also have the power to create unique offers and combos that help to increase the profit margins and stock clearance.
5. Surfing the Omnichannel waves:
A huge benefit of the D2C e-commerce strategy is that manufacturers get complete control of all their activities, from packaging to marketing. Unlike traditional marketing, many brands have opted for different channels to connect with their consumers. Customers can use any type of medium, such as social media: Facebook, Instagram, Whatsapp where you can find different D2C brands pages and directly contact the manufacturer for any queries regarding the product or the company. Brands also get feedback, which helps them to improve their services. Many more social media platforms have also created a path for selling their craft and work easily. D2C nowadays has websites where they can easily connect with consumers.
Moving forward, it is evident that D2C is going to become big. Moreover, a contactless world (which has become a norm) has further given the D2C space an impetus.
Authored by:
Raghunandan Saraf,
CEO & Founder,
Saraf Furniture
