In the current digital age, most people are searching for information and reading reviews before purchasing the products and shopping online. Many of the companies are shifting from traditional to direct-to-consumer models (D2C or DTC), Because they want to improve customer experience and connivence. Also they can have full access and control of the products, brands, creating, marketing, and selling processes. D2C is becoming a common way for consumers to shop. According to the recent study, over 80% of consumers plan to make purchases from D2C brands by 2023.
Direct-to-Consumer, D2C is an eCommerce strategy where the products or goods are sold to consumers directly by the manufacturers. With this model, manufacturers have full control of creating, marketing, and selling their products to the end customers through various digital channels. This model eradicates the middleman such as retailers and wholesalers, allowing the manufacturers more control over their products and overall marketing and trading process.
Consumer electronics would be the largest direct to consumer segment in the Indian market with an estimated market size of 30.6 billion dollars, while FMCG market value is expected to reach 20.8 billion dollars, home decor expected to reach 5.4 billion.
Due to focus on convenience and increasing online shopping, most brands are now focusing their attention on D2C channels. Some of the D2C brands in India are Lenskart, Licious, Zivame, Boat, Wow skin science, Healthkart, Mamaearth, MyGlamm, Sugar, IncNut, Country Delight, Pepperfry, Bombay shaving company, and many more.
The benefits of Direct-to-consumer (DTC or D2C) are
Through D2C channels businesses can gain control over their brand messaging and consumer engagement. While in traditional marketing once the product is handed over to the retailers, manufacturers can no longer influence the sale and build relationships with customers.
D2C companies get a full view of data by owning all the processes right from manufacturing to sale. They can use that data to enhance D2C channels. You can collect their email addresses, location, social media profiles, purchasing preferences, etc. it also gives insights into consumer buying behavior which helps manufacturers to optimize existing products.
3. Better opportunities to innovate
Retailers follow a set standard when selling the products and may not desire to promote or sell new products and products that have no track record of hot-selling items. With D2C, companies can launch new products at a smaller scale and can get feedback. In this manner, companies can understand what their consumers are looking for and can improve and optimize the products accordingly.
4. Increases the profit
D2C allows the manufacturer to sell their products at the same price as retailers, by eliminating the middleman in the process will impact the increase in profit margin.
5. Strong Brand Loyalty
D2C companies can provide better service and support to consumers which helps in building lasting relationships with the consumers and also helps in retention through targeted marketing campaigns.
Adopting a D2C strategy is beneficial to the companies however, it is always better to create a proper plan to ensure that the model remains consistent in delivering what the consumers need. D2C is the future. Especially if there is a continual disruption happening across supply chains. More manufacturers will turn to D2C e-commerce to sell to end-consumers directly.