By Raghunandan Saraf, CEO & Founder, Saraf Furniture
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 the COVID where the sales have drastically dropped down. 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 one that came up on top in retail marketing. The pandemic gave lots of chances to the D2C brands so that they can directly reach out to the customers without any physical touch (unlike how the traditional retailing process goes down i.e. sell to vendors, retailers, and resellers That’s what Business-to-business (B2B) usually do, in comparison to this method of retail, D2C is very convenient.
D2C brands sell directly their products to the 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 startups in India with more than 100 million online shoppers. D2C brands are radically changing consumer preferences and expectations and used 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 5 years, around 80% of consumers will end up purchasing at least once from D2C brands.”
1. Correlation with Customers
Any relation between 2 different parties is created through communication. Even in the retail industry, communication is the key to build a direct relationship between the manufacturer and customer. As we already know that D2C manufacturer has a direct relationship of communication with its customers, Unlike the old traditional retail method where there is no direct communication due to so many hindrances 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 generating trust amongst the community members, which helps in increasing the customer base.
2. Say No To “Middle-Men”
(D2C) business model, the seller is the one who directly sells and delivers the product to the consumer, without any 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 for delivering their products to the buyers which allows 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 reduced rigorously Due to Pandemic where online sales skyrocketed owing to this, brands saw the potential of online marketing, Many D2C brands started investing more in digital advertisement which improved return on expenditure and higher sales as well.
Video is the number one way consumers discovers a brand before they make a purchase. It is the ideal marketing medium for D2C industry, brands can use videos to incline 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 4 years of launch by investing more towards digital ads which enhanced return on expenditure along with higher sales as well.
4. Shaping Up The Costs And Prices
D2C businesses can charge the buyer lower prices as compared to traditional retail businesses, As there are no middlemen and 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 helps 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 much feedback which helps them to improve their services alongside many more social media has also made a path for selling their craft and work easily. D2C nowadays have 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.