If you haven’t already heard of the DTC business model or D2C brands then don’t worry — you probably already know what they are, and you’ve probably already shopped from a DTC brand before, too.
The past decade in retail saw a monumental shift, the one in which the shopping experience was more tailored to what is convenient and easy for the consumer, rather than the retailer.
And COVID-19 pandemic accelerated D2C adoption far more quickly than anyone expected, and much of that adoption is likely here to stay.
So, what is a D2C business model?
D2C refers to the practice of selling a product directly to the consumer via a company’s own web store, thus bypassing third-party retailers or wholesalers. For companies, building D2C capabilities allows them to directly interact with end-consumers, which helps steer brand strategy and innovation based on real-time consumer insights.
Benefits of the D2C model :
With the D2C approach, brands can gain control over the entire shopping experience resulting in stronger brand identity, and lasting relationships with customers. They can open up new revenue streams using D2C strategies and gain customer loyalty more quickly and efficiently. Here’s why –
● A direct relationship with the customer eliminates distribution inefficiencies. Brands have reduced distribution costs by removing intermediaries and gained greater control over their profit margins.
● D2C strategy allows brands to fully utilize the data available to them. They can identify patterns, trends, needs, and preferences of their customers, leading to better customer segmentation and marketing strategies.
● Brands get to form deeper relationships with their customers. With the entire customer experience chain, from brand websites, personalized offers, and messages to product delivery under their control, they get to dictate how the brand is perceived by the consumer.
● With greater control of all channels, brands can regulate their branding and conversion efforts under one funnel, creating a 360º brand identity.
Examples of D2C brands :
The D2C sector is growing tremendously in India and around the globe. According to data by KPMG, India currently has over 800 D2C brands, with the sector being worth approximately $44.6 billion in 2021 and projected to touch $100 billion by 2025.
Many companies are attempting to build out D2C businesses, with varying degrees of success. Leaders in this area have been able to make D2C not only their primary growth platform but a core part of their business.
With the appearance of social networks and various media channels available for marketing in recent decades such as Tiktok, Instagram, Youtube, there has been a surge in the amount of successful D2C brands.
Let’s take a look at some of the top DTC brands. These businesses encapsulate DTC’s heart — they all capitalize on specific niches with an interesting twist.
So, without further ado, allow yourself to be inspired by these clever direct-to-consumer brands.
Licious is a meat and seafood brand offering the cleanest fish, chicken, beef, and eggs.
Licious operates on a farm-to-fork model, controlling supply chain with world-class processing facilities,
Ensuring that highest quality and fresh until it reaches the end customer.
With over 3500 employees, the company claims to deliver orders within 90-120 minutes. And it handles over a million orders per month.
To date, Licious got a customer base of 1 Million + unique customers with an average basket size is of Rs 700.
Haus sells custom wines featuring various notes and flavors and offers a membership subscription that supplies customers with several bottles a month.
Haus’ membership grants access to exclusive flavors, free shipping, and members-only events.
For a wine company, their direct-to-consumer strategy certainly helps to establish long-term customer relationships.
United Sodas nails personalization. As the “People of the United Sodas of America,” they invite you to find your unique flavor. Also, they offer themed packs and variety packs to give their audience what they want.
Like Haus, they too have a monthly subscription that keeps customers’ fridges stocked with all their favorite sodas. With its bright, sparkly brand identity, United Sodas undoubtedly appeals to soda-lovers.
There are T-shirts and T-shirts, and then there is Bewakoof that brings a smile to one’s face.
The Mumbai-based e-retail business was started by IIT-Bombay alumni Prabhkiran Singh and Siddharth Munot in 2012. The company identified college students and millennials as its target audience and started producing funny T-shirts to capture the market.
The brand made waves, and in 2013, clocked more than 1 Lakh fans on Facebook, where it was primarily marketing its products.
The company clocked a revenue of INR 210 Cr in FY20 and improved its earnings by 28% compared to the previous year.
“D2C is not just a niche creation to step away from legacy brands. It is, in its entirety, a process- creation to address issues at every product touchpoint,” said Singh at the D2C Summit.
Consumer trust is quite low when it comes to online purchases of eye care products that may affect one’s vision.
But, things worked out well for a brand that has topped the funding table in the D2C segment with $774 Mn since its inception.
First, much like other fashion items, eyewear is a typical look-and-feel segment.
Lenskart managed to build trust and change perception through mind-boggling product varieties, widespread sales, at-home services, and more. It focussed on fit, comfort, and accuracy.
Lenskart now operates 750+ stores in more than 175 cities.
BLU PONY VINTAGE
Blu Pony Vintage came to life when a designer took her love for high-quality vintage clothing and utilized the DTC model to transform her dream into a reality.
With custom-created clothing, Blu Pony Vintage operates on a small production basis. Besides supporting charity, the brand also offers a Birthday-Club subscription. They promise to send out a little gift to kids on their special day. How’s that for customer delight?
Takeaways From These Direct to Consumer Brands
- They appeal to conscientious younger generations
- They embrace individuality. Brand voice is important. Use the language and tone that appeals to your core audience and don’t be afraid to really hone in on a niche.
- They carve out a place in their consumers’ lives to ensure they’re the go-to for their respective items.
- The examples above neatly outline how novelty and innovation can propel start-ups to success.
We’re confident that direct to consumer brands and all their associated trends will continue to disrupt the online marketing space and as time goes on, they’ll only become more influential.
So, now’s the time to take a leaf out of the books of these direct to consumer businesses — especially where customer experience is concerned. Examine your own brand to see if there’s room for improvement and if you’re creating a new brand, think about what DTC tactics you can include.
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