The spectrum from entrepreneurs to investors finds their interests piquing continuously in the D2C space because of its ability to compete against large FMCG brands by reducing internal costs and pricing, being able to focus on niche segments and a strong market recall by consumers across segments.

Industry analysts estimate the size of the Indian D2C market to cross $100 million by 2025. The current valuation of the sector stands at $44.6 billion as of 2021 with 800 such online-first brands already making their way in the Indian markets - according to a KPMG report. A key notable event recently was the Nykaa IPO post in which there was a surge in funding inflows for brands in this space. 

As competition gets fierce, D2C brands will be required to strategically play their cards in an ever-evolving and competing an online marketplace. With e-commerce surging, here’s how a D2C brand can build its capabilities to scale and improve performance in a thriving online marketplace. 

D2C Clarity - While in-store shopping has pick-up in a post-pandemic world, it does have its own set of challenges to scale, become resilient, and most importantly innovate - which is comparatively low cost in the digital world if these brands are to craft delightful experiences for their customers. As a D2C brand, you are addressing your consumer needs directly and also breaking their reliance on e-giants like Amazon. You have a role to play here - that of maximizing the lifetime value of your product, getting your consumer to surrender, and using D2C in defense to grow your market share. If you are building a D2C brand, steer clear of the fact that the degree of favorability varies significantly for some brand categories simply because shoppers are more likely to buy them online. E.g fashion and apparel will usually see high engagement as compared to electricals. Hence, building a D2C brand might come easy for some and not so easy for some categories. 

Making Shifts in Your Leadership/Management - You need the right minds to spearhead the D2C strategy. It’s critical for a D2C brand to attract and retain digital-first thinkers who can anchor the vision of your D2C journey with seamless execution to win a digital marketplace. For an online-first brand to succeed, the leaders must identify and recognize customer-first choices to consistently deliver the best customer experiences across channels. The leaders further should be able to thoroughly map the role, KPIs, and strategy for D2C e-commerce and eventually be able to prioritize and align the same across teams.

Channel Alignment - For sales, channel partner relationships are integral and by foraying into D2C, you might have to forego a few of the current channel partners. Here’s where a D2C brand needs to be careful of misaligning its marketing communications across different channel partners, especially when there are high fluctuations in the supply or demand of stocks. It’s important to sync the teams across different channels, types of customers, geographies, etc. to get the utmost clarity for your D2C planning and execution.

More Than a Channel to Sell - Most brands perceive D2C as a channel to either sell or optimize profits. Make efforts to develop a journey mindset - customer journey as well as product journey, prioritize customer-centricity, and how these two can nurture brand development over time to create value for customers.  

Scope - For a lot of categories that aren’t easily tapped by consumers for online shopping, brands might be aversive to exploring new product opportunities in e-commerce. It’s time to leverage e-commerce + direct-to-consumer relationship. Brands can invest in innovating new products, do white labeling, or even engage in a full-fledged marketplace of customized product suites. 

People + Technology - Investing Ahead of the Curve - If you are to scale a D2C route, it cannot be a successful attempt without deep integration of your resources with the technology. The right talent (ideally people who are experienced in fast-moving digital businesses) with the fresh technology infrastructure is paramount to efficiently deal with complexities and take risks. For this, look at your D2C space as an external investor who is looking at long-term returns over margins and profitability metrics. Then look at all the digital investments, strategy objectives, and estimated cash flows. This way you are forward marching holistically. 

Look at hiring talent from your organization and also from other organizations’ leadership teams and training them as they bring a valuable mix of expertise and experience. Further, D2C brands can also look at talent from other D2C startups and work closely with their talent by way of the acquisition of small D2C startups. These ways will help you not only prioritize D2C but also bridge the talent gap.  

Driving Better CX Consistently - Invest in predictive models if you can to be able to identify the needs, behaviors, and preferences to get better insights on making them loyal customers. CX and UX are the first and the longest partnership for a D2C brand on which your customer relationship is based. Of course, it cannot be subs-standard but it needs to be thoroughly relevant, and forward-thought. Hence, take into consideration a 360-degree experience to: 
-    Consistently get to learn more about your customers
-    Provide a seamless shopping experience
-    Build UX with utmost relevance that is truly customer-centric
-    Improve your Supply Chain operations
While predictive models elevate your insights, technology will accelerate your actions based on those insights.

Beyond Transactions

Delivering a great customer experience is one thing and bringing down your cost of acquisition to acquire a new one is another. Focus more on building and delivering a rewarding long-term relationship with your customer. Add real value to their lives in exchange for their loyalty. This will call for mindful choices between how and what you charge your customers and what can they access from your e-commerce ecosystem - product + experience. 

The above are ways to build, scale and grow a D2C brand holistically and sustainably. With evolving markets, customer choices, and technology, brands will have to adapt and relook at their CX and UX to remain ahead of the curve.