Present-Day Contours Of The D2C Model

India’s digital journey has taken off in a big way in the past few years and the pandemic has only augmented its growth. With ecommerce swelling in Tier II & Tier III towns, along with affordable internet plans and smartphones becoming ubiquitous, these trends combined have created a paradigm shift in consumer behaviour towards online shopping for all their needs, both essential and non-essential. With nearly 90 million shoppers in India today, many of which interact regularly with ecommerce marketplaces, the D2C market is projected to maintain a 19.2% growth in 2021.

Discussing the new trends emerging in the D2C market, Varun Alagh, Founder, Mamaearth spoke at a recent forum, hosted by BW Businessworld, CII & SAP on consumers’ growing comfort in ecommerce. “There has been a strong tailwind in the past two years, especially due to Covid. From commerce’s perspective, consumers are now more comfortable in transacting online. This phenomenon is not limited to just India but has lanced through ‘Bharat’ as well. We, at Mamaearth, ourselves see 11k pin codes getting serviced every month. Hence, this deep reach offered by commerce is making D2C even more relevant,” he says.

He goes on to explain how brand experience counts for another essential area. Within this, personalisation is its nucleus and brands are expected to cater to consumers' individual choices and usages. Further, for Alagh, the ability to generate stronger customer lifetime value is a byproduct of this, given brands have direct access to their audience. 

Highlighting some other trends that are apparent today, Smerth Khanna, Business Head, Ecommerce, Dabur India expounds, “The concept of consumer loyalty has now transformed into how a brand is to his consumers. Shifting from one element to another has become a necessity. As brands, we are constantly reshaping as per our consumers’ needs and demands.

Also, India being a heterogeneous market, traditional channels cannot shape future supply needs. Hence, going close to consumers is crucial. This is where the importance of D2C becomes imperative, as it caters to ‘local’.”

For Khanna, ecommerce was the pilot channel pre-pandemic. Covid has given a major fillip to it, where categories can now sustain only on D2C or ecommerce alone. “It is a game of mindshare vs market share, where the latter will be influenced by the former,” he adds. 

Latching On To Loyalty

Accepting that an enriching consumer engagement often begets strong brand loyalty, Lalit Aggarwal, Chairman, CII Regional Committee on Retail & FMCG and Chairman & MD - V-Mart believes that brands are perhaps born with it. “It is not only developed by products or prices but relationships- it’s how you build a relationship with your consumer. This relation is further driven by trust. How you generate trust is what as a brand must be your focus. 

In the case of our brand, there runs huge loyalty because customers are unwilling to experiment. 

For semi-literate or customers with low ability to spend and consume, their risk-taking ability is limited. They think twice. Brand loyalty will continue as long as the brand gives the right value for money. A brand’s continuous effort must lie in understanding their consumers’ evolving habits, behaviours, aspirations and then adjusting to it,” he suggests. 

Vishal Mahajan, CEO, Jubilant Consumer too mentions that we often overlook customer expectations. Understanding what a customer expects in terms of price, product, service, value, etc. and how a brand adds value to it, determines the final outcome. “Listen carefully through the tools. If we listen carefully, there are transformational opportunities for you to create better values. If there are well-defined systems to listen and execute learnings into action, you can uncover opportunities for delighting consumers more,” he advocates. 

Sameer Wanchoo, CMO, Eureka Forbes also pushes to engage with customers throughout the year, which will naturally result in high lifetime value. “Your approach must start with getting one view of the customer and data from across channels. Next, what we do with this data is equally important. Everyone in the chain must know what category of customer he is dealing with and respond accordingly. We must act on these granularities as there are so many data points.”

He urges marketers to first have a good quality robust product so that the customer experience is exceptional the first time. “Maintain a low complaint rate. Indulge in post-purchase demos. Make your customers’ experience enriching,” he says. 

Tech Tales

Technology has become all-pervasive, aiding markets to untap newer avenues and audiences. Digital, in fact, has made a huge difference here, enabling 24 hours engagement with stakeholders. On leveraging data, analytics and technology to ensure personalised experiences, Ashok Cherian, CIO, Page Industries marks, “Technology is the real common thread to get a brand going. It has become critical to set up forward-looking platforms to grow further and offer a fulfilling experience. Numerous questions get answered through tech and analytics today. 

Analytics space, on the other hand, enables us to understand the insights that brands can take action on. It is helping merge multiple data sources and build a comprehensive data lake. It is also a great way to table the ‘what’ or warning signs, that improves engagement.”

Sudakshina Ghosh, Industry Business Architect, SAP India supports technology that helps businesses move to D2C quickly. “When we envision D2C, it is always physical blended with the digital model. Tech is the thread that connects omnichannel engagement with consumers. But this doesn't mean we are doing away with the physical aspect of engaging with consumers. Covid is proof that Kirana is very much thriving and continues to be an essential aspect to reach consumers.

From a tech perspective, it is delivering reach. It is also helping internal stakeholders cloud back while generating new marketing strategies.”

Growth Potential

Exhibiting a double-digit growth rate over the past few years, the direct-to-consumer (D2C) market in India has only risen through the ranks. The potential of the sector remains huge, given opportunities abound in the activities of measurement, identification and targeting of consumers.

Sanjay Singal, Chief Operating Officer - Dairy & Beverages, ITC signals the rise of the sector, especially due to new customer segments, increased demand for existing products, digitisation, and deeper reach. “While newer brands, who perhaps can’t afford to launch a TVC, are trying to scale up through the relevance of D2C, larger brands are using these platforms to populate their new offerings. Also, ecommerce is helping brands present their entire product portfolio, which sometimes is a challenge in general/ modern trade.”

For Singal, the latent entrepreneurial ability of the Indian shopkeeper or Kirana store owner is leveraged to create a compelling blow of products on a D2C platform.