Technology Fueling Growth Of D2C Brands
Brands in the direct-to-customer trading have been leveraging technological solutions to take an edge over their counterparts
The fast-paced digitalization and advancements in technological innovations have been transforming the overall outlook of businesses and the way consumers trade these days. The recent years, especially post the unprecedented pandemic, have brought in a paradigm-shifting change in the buying process, where the consumers get control over the pre and post-shopping experience. In line with this, the brands in the direct-to-customer (D2C) trading have been leveraging technological solutions to take an edge over their counterparts.
Even since the COVID-19 hit, there has been an increase observed in online shoppers. The crisis of lockdown forced people to open the resorts to order their necessities online and experience the process of online shopping.
Another shift in the digital world was seen through an increased content consumption of the audiences and penetration of internet facilities by a number of mobile users. As a nation, there is increased trust in transacting online as earlier people preferred to choose 'cash on delivery', and this ease of payment convinced consumers to do it often; this shift has also lasted post COVID-19 trends.
Coupled with the ease of purchase, options available to choose from, speed of delivery, and ease of return or exchange for some industries, with genuine and authentic product is fueling the online shopping trends. If we look through a microscopic view, the numbers and protocols that we could achieve in 2028-2030 was hit in 2020-2021 itself. It's just the beginning for the era of growth in D2C trends.
While the D2C market in India has been valued at $33.1 billion in 2020, it is projected to take an exponential leap to reach $100 by 2025. Notably, the market has grown 15 times since 2015, mostly accredited to the astounding penetration of technology in Indian trading over the years. Most eminent brands in the country have grown to more than 80 per cent in 2022. One of the major drivers in the growth of the D2C segment in India has been the beauty and personal care sector, which observed the highest e-commerce order volume in 2022.
From the inception of an idea to execution and growth, technology has been bringing in transformational changes in the operations of D2C brands. Some of the core areas where technology has been fueling the growth of the D2C brands in the country include content generation on social media or a seamless shopping experience on the website.
Here are some of the key ways that D2C brands have been leveraging technology for business growth:
Customer communication is common for consistence communication to integrate the several touchpoints a D2C has to engage with the consumers. Through the trend locking tools, studying the consumer behavior graph presents a picture of where and what has changed daily. To maintain the brand identity throughout, technology helps synchronize the communications for the brand's voice.
Supply chain integrations
From procurement to warehousing to fulfilment of orders and logistics, all supply chain management processes are linked through technology tools.
a. OMS/WMS tools allow the methods of keeping the customer in the loop during the shipping process. It helps ensure the consumer of its timely delivery and creates a sense of responsibility & credibility throughout the journey of purchase.
b. Modernizations allow reducing the overhead of redundant tasks. All orders can be centrally processed, and itemized inventory provides tracking to the last detail etc.
Multiple enablers are available within the startup ecosystem to maintain the hygiene of supply chain processes that have escalated the delivery timings for D2C brands.
Customer checkout system
With tools to engage with customers during the checkout portal, it helps read customer behaviour patterns for early detection of fraud, buying trends developing in different regions' history, and access to a database with minute details and showing delivery timelines before dispatch etc. It enables options for subscription and secured payment information being stored, etc., for ease of usage.
Integration of online and offline channels
The seamless presence of the brand is only able through technology to knit together the offline learnings and online challenges for better decision-making. Capturing omnichannel user behaviour helps develop strategies around better recommendations, using consolidated patterns to give a personalized experience to the customer and maintain the brand identity throughout the platforms of customer connect.
Enabling AI for conversational commerce
The development of AI has smoothened many edges when it comes to interact with consumers in real-time digitally. The recommendations basis AI learning with customer interactions are called in-cart upsell. The overall digitalization of business operations has made customers more prompt at making purchasing choices, and direct-to-customer businesses have been focusing on making customers feel welcome at any platform they are advertising their products. There have been inclusions of cutting-edge technologies even in D2C marketing like automated conversations through chatbots, which significantly reduce wait-time and help with customer acquisition and retention.
There has been a significant surge in quick-commerce (Q-commerce) and the need to categorize product sales into a niche segment. Adopting technologically advanced analytical tools, D2C brands have been easing their understanding of the vital market and making fundamental decisions like setting up a micro warehouse or propelling their reach in a particular area.