The retail industry has seen some significant changes recently, the most crucial being the emergence of D2C or the direct-to-consumer approach. Under this retail model, the sale of a product takes place directly from the manufacturer or producer to the consumer without the involvement of middlemen, dealers, retailers, or brick-and-mortar stores. While there have always been certain D2C brands in every vertical, it was largely confined to fashion or lifestyle industries.

That seems to be changing irrevocably post-pandemic as brands look for alternatives to reach out to their consumers. D2C with its transparent pricing and immediate reach seems to be the most viable option. The numbers support its remarkable trajectory in the past year with D2C brands registering a whopping 88 percent rise in demand in 2020 when compared to the previous year. As of 2020, there are over 800 D2C startups in India with more than 100 million online shoppers. More remarkably, it promises quick returns with startups hitting their Rs 100 crore revenue mark in a remarkably shorter span than in the traditional set-up.

So strong has been the emergence of D2C retail brands that it is slowly reshaping the consumer-brand relationship in India, creating a more streamlined approach that is both effective and efficient. Here are some of the key D2C trends that are redefining the retail industry:

Turnaround Time

One of the most significant changes brought in by a D2C approach is the shortened turnaround time. The traditional model involved multiple stakeholders, from wholesalers or dealers to retailers. Consequently, the journey of the product from its finish to its arrival in the market could take up as long as 12 months. Today, this would be unthinkable for D2C companies that have been successful in launching their products within months if not immediately. With no stakeholders to slow down the process, a product launch is synonymous with connecting with the consumer.

Greater Customization

D2C companies have been largely successful in bringing greater customization to their product. Unlike traditional models, here companies are able to connect directly with the consumer and often have a dedicated channel for gathering customer feedback. The model also allows companies to reach out to a smaller market segment to gather feedback for more customer-centric products.

In the mattress industry, for example, we can see customisation that was not available before with variations such as orthopaedic and luxury mattresses and add-on services such as trial periods with free returns and no-cost EMIs. Digitalization of the marketing channel also facilitates a personalized approach. In digital marketing, brands use tools like browsing history and previous purchases to reach out to their target consumers.

Content to Remain the King

While D2C may have removed the middlemen, the direct approach also creates the necessity of effective communication and this is possible only with dynamic content. For the D2C brand, the website is equivalent to all the stores rolled into one single platform where it often gets just one chance to grab the buyers’ attention. Consequently, these brands have invested in developing their content, creating a platform that not only sells the product, but also educates the consumer.

Omnichannel Marketing for Elevated Customer Engagement

A D2C approach gives brands more flexibility when it comes to engaging with consumers. Not limited to the traditional market, many brands have taken on different channels to connect with their consumers, such as pop-up shops or selling through other online platforms. Many experts predict that the digital-only approach may also slowly see a partial relaxation with few brick-and-mortar stores for consumers who want to see the physical product before buying it.

D2C Creates a Level Playing Field for Smaller Brands

For the first time, smaller brands have as much potential to reach the consumer as a multinational conglomerate! Ultimately, a startup firm’s website can have the same potential to reach out as bigger companies. With innovative digital marketing, they can create more visibility and intimate connect with the consumer. Consequently, homegrown small brands have been largely successful in creating a brand presence that can rival bigger brands.

Given that the pandemic is still impacting the retail industry, the D2C approach will continue to make further inroads into the retail industry with many bigger brands joining the bandwagon. While 2020 was the year it took off, 2021 is poised to be the year it will come into its own. With the market expected to reach $100 billion by 2021. This year would be crucial in the growth of D2C models in realising opportunities, creating greater customisation and working towards its growth targets.

- This article is penned by Harshil Salot, Co-founder, The Sleep Company.