Growing a D2C Brand in 2022
By Gunjan Chandok
“The sooner we drop the ‘E’ out of ‘E-commerce’ and just call it commerce, the better.”
~Bob Willett, former President of Best Buy International
These words are an indicator of the online revolution that has been happening in the retail space.
Online shopping has changed, rather revolutionized the way people shop by introducing revolutionary changes such as:
- Shoppers expect more variety even when they pay a visit to a retail store,
- Product details and specifications are legible, easy to read, and refer to on an online portal which is sometimes difficult to read due to the smaller font size on the original packaging,
- Delivery is smooth and hassle-free,
- Using omnichannel customer support tools like mezchip, brands are able to communicate and immediately respond to customer queries on any channel.
- Sharing feedbacks and community building is possible
- The advanced technology of data storage are facilitating repeat orders and comparative ordering every time a customer orders online
- Artificial Intelligence and big data have further made it a win-win case for customers by understanding the shopping patterns and behavior of the customers and creating more personalized experiences.
According to eMarketer, the number of D2C buyers has expanded significantly every year since 2017, leading to a projected total of 95.4 million digital D2C buyers in 2021. Therefore, selling online has become a lucrative option focussing on the requirement of having a “direct to consumer” model of selling.
Simplifying the concept of D2C, DTC, or “direct to consumer” sales
It is a trading model selling the commodity of the manufacturer commodity directly to the customers without any role played by the mediators.
As per the typical practice of making sales, a retailer sells the product to the customers involving intermediaries like
- Wholesalers, or
- Different elements from the sales chain.
“In the direct-to-consumer channel, we continue to look at the entire world as an extension opportunity for all of our brands.”
Simplicity is a new luxury when it comes to product design.
Before the internet, most shops (except for mail-ordering companies) were bound to sell as per the amount of shelf space available. This made the stock the most popular item while eliminating the underperformers.
Chris Anderson, a Wired editor way back in 2004, began writing on how the internet might influence the selling scenario. He stated that since e-commerce enterprises don’t have to bother about “conserving shelf space,” they would not be required to make such decisions about what to carry and how to manage its storage that too for what duration. Most importantly, they didn’t have to stick to what was popular or popular at the time.
Instead, they may tap into the various products that are usually not sold in brick-and-mortar stores.
A livid example of the simple product design approach is very much evident from Mamaearth, a baby care product D2C brand.
Mamaearth is a firm run by moms, for moms, and for the benefit of moms. Over 200 young moms are involved in the product development process, helping to conceptualize, try, test, and formulate the items. The products are only put into production when they have been properly approved. It is committed to providing toxin-free products for mothers and their children.
A strong customer experience is the foundation of an end-to-end brand.
The quality of a brand’s offering is a major concern for these direct-to-consumer businesses. We’ve discussed how MamEarth’s slim, customized product ranges give their offerings a sense of prestige. However, the total experience of purchasing the thing, rather than the object itself, is more crucial to the concept of “quality” to deliver a strong customer experience.
D2C brands have positioned themselves as the polar opposite of traditional retail behemoths in this sense. Take, for example, a normal Amazon buyer’s experience. You go in search of a pair of speakers and are instantly confronted with a plethora of options aimed at getting you to the cash register as quickly as possible. If you’re still undecided, the “Compare to comparable items” section may provide even more possibilities.
Whether you only need a basic set of speakers for a party or want to invest in a decent pair for your home office, you should be able to find what you’re searching for no matter which model you choose at first. You will, however, have to make decisions and accept tradeoffs. A lower-cost item may not be as good as a higher-cost item. Amazon provides you with the power to select, but it’s up to you to sort through a plethora of options and make difficult compromises.
For the most part, successful D2C companies usually take a completely different approach to quality. Instead of catering to various levels of interest and motivation, they present a less expensive product with [X, Y] characteristics.
The homegrown consumer electronics brand boAt is India’s largest digital-first brand listed as top-five list globally in the wearable area.
It began by identifying a gap in a rather dull, fuddy-duddy sector, designing headphones with a high fashion quotient at reasonable pricing. Currently, over 30% of the company’s workforce is committed to designing, focussing solely on ergonomic and visually appealing designs of products supplied at the proper price range, with the majority of their products priced between Rs 1,000 and Rs 3,000.
There were hundreds of brands in the crowded market when boAt began in 2015. The company went on to gain over half of the market share and has continued to develop goods with unique features. For instance, its first set of sweat-resistant headphones did well considering the Indian climate and had the kind of bassy sound that Indians liked.
A significant portion of their research is based on
- social listening, which entails spending time talking with customers.
- It also mines trends to discover the most popular search terms in India to get a sense of the country’s pulse.
- Its product range, quality and design of items, and quick innovation cycle, among other things, distinguish them.
For a product launch- swiftly establishing an audience is critical.
It is becoming increasingly difficult for brands to get attention on the internet. This is largely because every business, big or small, has invaded the online world creating an insurmountable amount of noise.
This has made consumers extremely skeptical about brands that indulge in self-promotion. That is why the demand for new, innovative digital marketing strategies has been on the rise.
For example, the brand boATt which began as an online player is now rapidly expanding offline. In the omnichannel environment, they are increasingly seeing a presence. The majority of their consumer category is heavily influenced by technology, which is why the majority of advertising is done online. Consumers may, however, wish to walk into their local stores on occasion. They’d go to a market sometimes, and on other occasions, they’d wish to visit the website. Their ultimate goal is to have the product available wherever customers want it.
Another windfall for the firms, which sells their products across 98 percent of India’s PIN codes, has been an increase in internet purchasing since customers from Tier-2, Tier-3, and Tier-4 cities have been getting more comfortable with buying online.
Omnipresence and the chance of going viral
The pandemic has induced consumers to try new services, offering opportunities to escape from a shutdown. The target audience is now spending more time on social media
With the quarantine in place, the majority of internet users are engaged with social media for different reasons such as entertainment, connecting with friends, and browsing news. This is an inviting opportunity for companies to market their products and establish a direct connection with the consumers.
Getting noticed is now easy with advertising with the help of various mediums, which is usually not attempted by everyone in the industry. The demand for advertising has been rising, with more and more brands collaborating with allied products and services to offer complete packages to customers.
The advantages of utilizing the omnipresence tactics can be well understood by witnessing the growth and reach-out journey of another popular Indian D2C brand, Sugar Cosmetics.
- SUGAR Cosmetics, one of India’s fastest-growing makeup and beauty brands, debuted in 2015 as a direct-to-consumer cosmetics brand with goods tailored to young Indian women.
- It established an omnichannel distribution network with over 2,500 retail locations in over 130 cities.
- Until 2017, it was solely available digitally through their website and other major eCommerce partners.
- By early 2018, they were also in General Trade and large-format shops in malls
- They soon progressed to opening exclusive brand stores and kiosks.
- As of now, they have also established a brand-owned mobile app.
D2C Brands can take up multiple ways to engage customers with their brand on social media accounts:
- Starting or joining conversations
- Utilizing sponsored posts
- Posting more frequently
- Conducting an online contest
- Keeping customers in the loop with store updates
- Promoting special or limited-time offerings
- Having resellers to further sell your products and services.
Irrespective of the pandemic, simplicity in product design, quality of the offering, and utilizing channels to give a wholesome customer experience has become the key indicators for a D2C brand to grow and mark their presence today. Emphasizing the same lines with more fervor and enthusiasm will help the brands to strengthen their place in the market and get ahead of competitors. Understanding the target audience and aligning it with the brand’s vision and purpose will lead to building better business relationships and accruing benefits.