Do customers like to buy products at lower price?
– Yes, they do.
Would a company like to sell products at profitably low price?
– Of course they will.
That’s what D2C is all about.
Direct-To-Customer is one of the e-commerce models where the manufacturer has the ability to sell its product directly to their customers through the website.
Whereas, in a traditional business model a product is supplied from Manufacturer -> to Wholesaler -> then to a Distributor -> then a Retailer and finally to the Customer.
D2C manages to sell products at quite lower price by eliminating the middleman and connect producer directly to its customer. D2C isn’t a new business model but it observed a sharp spike while the time of pandemic as people were not able to buy from stores and shopping online was the only alternative left.
According to report India is the third largest online shopper’s base following United States and China. Currently India’s largest market is into Fashion and Accessories sector.
Benefits of D2C model – Why should you go for it?
Better relation with your customer
As a manufacturer, being close to customer is very important. You get to know your customer’s need, complaints and suggestions. But having middlemen means having barrier in this communication, customer insights doesn’t reach till you.
This crucial information helps you build a better product, making changes according to customer’s on-site behavior, get a closer look on which stage of marketing funnel are the customers and send personalized messages accordingly.
More control over pricing and profits on it
In traditional model a chunk of margin is kept by the middlemen due to which customers get the final product at higher price and even company isn’t able earn a good profit.
But in D2C, company has the complete control over pricing as there are no middlemen involved in the process. This let’s product reach to end consumers at quite low price and on the other hand also spare good amount in profits.
Customers love buying directly
Customers like dealing with the manufacturer as it gives them the feeling of buying from an expert and being connected with the company itself.
Customer’s loyalty increases when the brand’s dedicated support team communicates with them regarding any query or issues to be resolved.
Also buying directly from producer has its own advantages like expert guidance, attractive offers and discounts and customization on product according to their requirement.
Create excellent Brand Identity
When a customer is shopping from a store they might have divided attention comparing various products as there are many other brands present along with yours sharing their own perks too.
But while they are on your website they have their attention only towards your product and that’s how you have the control of conveying your side, the story, unique attributes of your product to the customer and create an unforgettable experience with imprinting an impression into their mind.
Omni channel approach
It is company’s approach where they give access to customers to their products, offers and support service across all channels, platforms and devices.
So instead of resolving support queries by website only, companies can hear customer’s enquiries by WhatsApp too. That means you will be reaching your customers where they are instead of them coming to you.
Also this makes it easier for customers to make purchase through any medium. They can buy through their preferred device Desktop or Mobile and even from the store if they want.
Challenges in D2C
As it is a low entry barrier market there are a lot of companies opting for the d2C model. Due to this customers have variety of options to choose from.
Also on other hand there are retailers who already have a base of customers who prefer buying from the. Hence, maintaining your existence is quite of a task over here.
In traditional business model, the manufacturer had to just handover the products to wholesaler and they would take care of the rest supply chain.
But, in D2C as this whole supply chain is optimized, manufacturer will have to see over the delivery. You have to make sure the numbers of order are fulfilled within time and products are never found Out-of-Stock.
Matching customer’s expectation
As its said customer is King, so companies will have to make sure that customer is always happy with the brand.
To make sure this, brands will have to keep themselves updated according to the market trends, customer behavior and their preferences. Failing to do so may result in losing customer.
Still thinking why to start D2C brand?
- Current D2C market of India is more than $12 billion and is growing swiftly.
- D2C industry is estimated to reach $60 Billion by FY27 according to CII report.
- Some popular D2C startups of India are Bewakoof, Mamaearth, Licious, Nykaa and Boat Lifestyle.
- Low Entry barrier whether whichever industry you want your D2C brand to be.
You are good to go, by just keeping in mind some key details related to your target customer and the industry you want to enter in.
As this sector has seen rise in startups even at the times of pandemic so you can predict how much scope will it attract in the coming years. Leverage the power of social media and make your brand reach a large audience.