2020 was a climatic year. The Covid-19 pandemic has crippled industries around the world and changed the way the world lives and does business. The retail sector has been hit hard by the pandemic where sales have fallen dramatically. Most of the wholesalers and indirect middlemen had been knocked out of the game due to the pandemic which somehow unintentionally helped D2C electronic commerce (direct to consumer).
D2C brands are the ones that dominated retail marketing. The pandemic has given D2C brands a lot of chances to reach customers directly without any physical contact (unlike how the traditional retail process is, i.e. selling to suppliers, to retailers and resellers. B2B) generally does, compared to this retail method, D2C is very convenient.
D2C brands sell their products directly to customers without any middleman. These brands operate independently and do not depend on stores or indirect intermediaries to deliver their products directly to their customers.
According to digital agency Good Rebels, âIndia’s digital transformation has taken off tremendously in recent years. In 2020, there were over 800 D2C startups in India with over 100 million online shoppers. D2C brands are dramatically changing consumer preferences and expectations and are using this infrastructure to grow quickly and connect directly with their customers.
The growth rate of 19.2% is expected in 2021. The Direct to Consumer Purchases Index indicates that over the next 5 years, around 80% of consumers will end up buying at least once from D2C brands.
Correlation with customers – Any relationship between 2 different parties is created through communication. Even in the retail industry, communication is the key to establishing a direct relationship between manufacturer and customer. As we already know, the manufacturer D2C has a direct communication relationship with its customers, unlike the old traditional retail method where there is no direct communication due to so many obstacles between the manufacturer and the buyer. Customers like to be in direct contact with the manufacturing brand. Customer engagement allows the brand to grow through word-of-mouth and generates trust among community members, which helps increase customer base.
Say no to intermediaries – In the D2C business model, the seller is the one who sells and delivers the product directly to the consumer, without any interference from a middleman. They don’t go through the traditional retail process. D2C brands do not need to rely on conventional stores, department stores or any other middleman to deliver their products to buyers, allowing D2C companies to sell their products at lower costs than mainstream brands. and maintain end-to-end control. on the manufacture, marketing and distribution of products.
Revealing Brand Stories Through Advertising – Offline sales have dropped dramatically due to the pandemic where online sales have exploded. For this reason, brands have seen the potential of online marketing. Many D2C brands have started investing more in digital advertising, which has improved ROI and increased sales.
Video is the number one way for consumers to learn about a brand before making a purchase. It is the ideal marketing medium for the D2C industry, brands can use videos to bias emotional response and engage customers online.
In the personal care category, for example, we can see mCaffeine (which was launched in 2016). mCaffeine, has sold over 2.8 million products in just 4 years of launch investing more in digital ads which have improved ROI as well as higher sales.
Shaping costs and prices – D2C companies may charge lower prices than traditional retail outlets. Since there are no middlemen and many D2C brands save a lot of margins which they can use to offer great discounts which attract a large number of customers to their products. When companies are in control of what they sell, they also have the power to create unique deals and combos that help increase profit margins and inventory liquidation.
Surf the omnichannel waves – A huge benefit of the D2C ecommerce strategy is that manufacturers have complete control over everything 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 Facebook, Instagram, Whatsapp to find different D2C brand pages and contact the manufacturer directly with any questions regarding the product or the company. Brands also receive direct feedback that helps them improve their services.
In the future, it is obvious that D2C will get bigger. In addition, a contactless world (which has become a standard) has given further impetus to the D2C space.