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The E-Commerce Model of D2c: The Next Big Thing?

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Ankur Dayal, is CEO & Co-Founder of Primarc Pecan Pvt Ltd, the only end-to-end e-Commerce service provider of its kind in India. He is a young and dynamic leader who brings with him years of experience in the spaces of banking, insurance and of course e-retail

Never in public memory has a disaster affected the entire world so drastically and at such a rapid pace as seen in 2020. The past year was completely bizarre and brought the industry overall on its knees and to a relentless standstill. The Covid-19 pandemic changed the way the world lives and business is conducted. Both consumers and businesses have had to cope and adapt in several ways, and the D2C or direct-to-consumer business space is no exception.

The D2C Switch
As the barriers to operating a business online began to blur, the D2C model of business started its take off run and is now more common than it was ever. Though some might call it a utopian concept, brands are now exploring the sale of products and services directly to consumers and not through middlemen or distributors and retailer set ups.

Though the switch from the traditional retailer model to D2C is gaining traction, it has been slow-moving. This is because the traditional seller deals with bulk selling and the D2C model requires them to deal in single items as well. However, all that is changing swiftly as the pandemic changed the world around us.

The contribution of digital marketing is immense in brands retargeting their customers to execute their strategy


Upping the Recall Factor
The service module is seeing a gradual shift as brands are now taking on a D2C approach. Brands are preferring to communicate by using effective digital marketing tools as offline stores suffer a major setback. Brands setting up their virtual marketplaces to maintain a direct connection with their potential customers is increasingly the order of the day.

As the country deals with the second wave of Covid-19 and a third wave predicted within the next few months, being relevant as well as omnipresent has definitely emerged as the need-of-the-hour for most brands.

Marking a potentially bright future for the brands here is the D2C model, which is certainly upping the recall factor for brands and businesses and helping them to secure their spot in this ever-so-competitive market.

Next Big Thing
There are several reasons why brands are switching to the D2C model. Connecting directly to the consumer offers operational efficiency, better connect directly with the buyer, enables replicating the brand identity, builds trust around the quality and authenticity, offers the buyer an official product gallery, etc.

As things stand today, the future of e-commerce is looking bright with the D2C model and brands view it as the next big thing in the space. The benefit of working on a D2C e-commerce strategy is that the manufacturers get full control of all aspects ranging from product packaging to marketing. This is a huge plus point for brands as it helps them connect well with their consumers and fulfil their aspirations which would have been executed through offline stores in the absence of a pandemic and temporary lockdowns.

Intuitive and Better Customer Experience
Today's shopping experience is unlike anything we've ever seen before. Various reports available suggest that over the last 1 year there has been an almost 60% increase in brands building their e-commerce websites. Brand websites have seen an order volume growth of almost 80 percent in the same period.

According to The Start Up Lab, it attributes this `tremendous disruption' seen in the D2C space to increased internet penetration and changing consumer behaviour. It further said that online shopping in India is at an all time high, showing a 24 percent y-o-y growth, fuelled by over 700 million internet users,

To enhance the experience for their consumers, brands are going big on the use of AI in e-commerce. AI is helping brands predict the shopping patterns of consumers and this information is in turn used to create a virtual shopping experience. By using virtual tools like a chat box and digital assistants, brands are getting more intuitive and are enabling a better customer experience.

From intelligent product recommendations to the personalisation of online shopping, AI has improved customer retention and sales as seen from the higher returning number of shoppers on e-Commerce platforms, including the D2C model.

Retargeting Customers
The contribution of digital marketing is immense in brands retargeting their customers to execute their strategy. It is often said that in many ways, D2C brands represent the original promise of digital commerce. Digital marketing is essential for D2C because it leverages the internet for each stage of the consumer journey.

Though sales are enabled by e-Commerce platforms, it is digital marketing using social media that ensures a two way communication and email marketing strategy that connects directly to consumers. These tools help influence consumers of making a repeat purchase, lure them with exclusive discounts, and others. Digital marketing has provided brands with a new standard in creative marketing and product development.

An Effective Substitute
By making D2C an effective substitute for offline stores, brands are creating a solid consumer database which combined with digital marketing tools has managed to direct more traffic to the websites. What an IAB Research report found was that in most categories ranging from mattresses and furniture to pet products, personal care, and beverages, D2C brands were fast gaining market share from incumbents.

For brands, the D2C model provides for a single channel platform that enables network wide visibility, supply chain planning, and execution integrates logistics management and warehousing. Offering a network platform, brands can see their entire supply chain from inbound raw materials to last mile doorstep delivery. Customer satisfaction is improved through optimal demand supply matching, and market spends ensure that product orders are never delivered piecemeal.

On the whole, the demand for D2C brands in India is in transition as the digital boundaries expand, trends like augmented and virtual reality pickup, product personalisation takes centre stage and the number of consumers shopping online for grocery, home, and food products, cosmetics, etc. keeps going up.