Growth Commandments for D2C Retail Brands

Recent years has witnessed a paradigm shift in consumer shopping behavior – one which is fueled by both the availability of brands to cater to the burgeoning needs and the increased smartphone penetration.?

A recent KPMG report indicated the presence of 800+ D2C brands currently in India. The D2C sector was pinned worth $45 Billion in India as of 2021, and is predicted to reach $100 Billion by the mid of this decade.

Given this meteoric rise in D2C brands, here are a few game-changing growth commandments that are ‘paramount’ for this industry. Read on.

|| Commandment 1 || ??CONSUMER DATA IS PARAMOUNT

Data literally needs to be worshipped for its ability to provide the correct roadmap for a brand to build itself. It provides the brand a clear indication of where precisely id est which category, cohort, daytype, daypart, sub-segment, variant, occasion, promo, demographic, geography, etc. is it doing well in. Both the pain as well as the pleasure points are clearly enumerated with data and a careful study of it. Many a great opportunity to steer the brand off turbulent waters is lost either due to lack of data or a hazy understanding of it.

Retail research and a thorough understanding of the market & the consumers within is absolutely imperative now more than ever, especially in an environment which relies so much on a virtual shopping experience. Not only would access to data provide keen insights for the brand and marketing, but would also help magnify issues in distribution, stocking, cross-buying practices, etc. It can thus help enhance specific categories within the brand, as also showcase windows to create newer categories and trends. So, yes, consumer data is paramount and sacrosanct.

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|| Commandment 2 || ??PROMIX WIDTH IS PARAMOUNT

Brand pro-mix which relies on width is very beneficial in a D2C environment where the per-capita marketing costs generally turn out to be high on account for fewer products, as Average Order Value is small. With AOV on the low, customer acquisition costs typically rise, and fast. Hence, creation of an ecosystem with multi-product portfolio entails choice expansion to customers and a spread of underlying costs for retailer. A win-win for both.

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|| Commandment 3 || ??PRODUCT EXPERIENCE IS PARAMOUNT

Common downers of ‘lack of trial’ or ‘absence of sampling’ is oft reiterated by consumers while expressing displeasure with D2C brands. This can be dealt with by offering sampling options especially pertinent to newer categories where a certain level of education provision has to be undertaken first.

Case in point, Pride of Cows - a premium milk brand which works on a subscription based model – has no retail presence. None, nought, nada! But, it had first started with an expansive milk-sampling initiative outside popular local kirana stores and residential premises, offering samples in tiny milk bottles. Today it is one of the fastest growing premium milk brands in the country.

Similarly, CaratLane – a young jewellery brand, now acquired by TITAN – is currently providing customers an option of trying and feeling the jewellery at home, and then indulging in a purchase. Therefore, phenomenon called Pre-Purchase Product Sampling cannot be underestimated – be it for new products, niche products or even big-ticket purchases.

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|| Commandment 4 || ??PERSONALIZED JOURNEY IS PARAMOUNT

As consumers have now an ocean of offerings from where they can choose, it is important that one has a certain advantage over the others.

Embracing technology to the highest level would be a way to personalize the shopping experience for the customer. Shopping be redefined by allowing a variety of technological innovations like AI, Voice ordering, One-click-check-out, IRL imaging and other similar innovative systems.

Newer technologies need to be brought in to gain traction among the new-age consumers. CaratLane is the world’s first virtual 3D ‘Jewellery Try-on’ App. Using innovative facial recognition software and 3D imaging technologies, it offers a life-like immersive experience to try on jewellery pieces before making that purchase decision.

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|| Commandment 5 || ??AFTER SALES IS PARAMOUNT

A big hurdle in adoption of virtual purchase can appear in the post-purchase stage. While shopping usually is a pleasure, in case of returns, shoppers complain of it being very cumbersome. In case of D2C experience, service is equally critically defined by the post-purchase stage, hence enough stress needs to be laid on this aspect of the consumer journey.

Good service can also mean good packaging for some – especially when brands employ sustainability into its fold via innovative yet elegant designs in packaging, thus making for a further guilt-free experience for ‘green buyers’ (note, this is a rapidly growing buyer pool).

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|| Commandment 6 || ??OMNI-CHANNEL IS PARAMOUNT, EVENTUALLY!

Considering the early costs involved, a pure-online approach can be good to start with, but every retailer worth his salt indicates that the future rests on having an omnichannel approach - which is not to exclude the offline completely. An omnichannel strategy entails full-integration of the shopping experience united across all touchpoints viz. online (brand website, app, e-markets, etc.), as well as offline (brick-and-mortar retail outlet). So, it would also be astute to have a decision regarding scaling-up parked quite close, since acquisition of newer customers can also be driven through an offline presence to a large extent.

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