B2C and B2B have now given way to a new model: D2C (Direct to consumer).
The direct-to-consumer model is becoming popular as more and more small manufacturing businesses are choosing it over traditional formats.
Before online shopping became popular, small brands struggled to find a place on supermarket and kirana shelves, and the distributor dependency was high. Thanks to the D2C model, now it is possible for every business – big or small – to reach its target audience.
Meet Sania Rohatgi, who runs a small business selling handmade scrubs and toiletries. She runs an offline store in Mandi, a small, beautiful town in Himachal Pradesh, and finds that her products are selling extremely well among locals and tourists. She’s now keen to get a pan-India clientele.
Over 1,500 km away, in Nashik, Maharashtra, Rahul Nath, a first-generation entrepreneur, is creating Indian wines for a global audience. His red and white wines have been liked by family, friends, and a loyal set of customers in the region, but he’s wondering how to get it to more people in a quick time.
The D2C model can help both these business owners. Once they go digital with a website and use digital marketing promotions, they can benefit by reaching out directly to the customer – and cutting out the middleman.
The idea is to remove resellers, producers, and other companies that come in between the brand and the final customer, and bring the business closer to its target audience.
India has more than 600-plus D2C brands today, some of which have gone on to become big businesses. These include the likes of Boat, Licious, Wrogn, MamaEarth, MyGlamm, MCaffeine, Wakefit, and Mom’s Co. Others are working to get there: ItsyBitsy, NuttyGritties, Cosmix, and more.
The key benefit
The biggest benefits of the D2C model is that there are no middlemen, giving you higher control over profits. There’s also more freedom for product testing, the ability to offer more personalisation, and access to targeted customer data.
D2C brands are “not just product companies”. They are companies that are creating a community of like-minded people – this power of community is helping many small businesses grow faster than they would have otherwise.
So, how can small businesses benefit from the D2C model?
By gaining a better understanding of the customer
Before the rise of D2C, small manufacturers and businesses hardly interacted with the end-user who bought their product. But D2C has shown that there are other ways to get to know the consumer.
A D2C business lets you have direct contact with the customer through every stage of the sale process – and also for after-sales conversations.
This channel gives you total control – you can craft the customer experience the way you want and will own the data from all consumer interactions such as sales, customer service, and marketing.
Learning more about your customers – be it their demographics, choices, preferences, and needs – helps you for future marketing and creation of new products.
By providing you with more opportunities
Selling from an offline store means you are bound to a specific location and city. An online marketplace means that you have to go by that company’s methods and processes.
Taking the D2C route gives you many options – you can sell as you like, experiment with pricing, try subscription plans, offer try before you buy services, introduce new product lines and packages.
In fact, the D2C channel sets you free and lets you innovate on a small scale without the fear of risk. D2C also empowers you to understand market trends as and when they happen, be more responsive, and have the ability to react and respond to change.
The availability of customer-centric data helps to focus on offering products that are likely to win your customers’ attention.
By offering increased control over the brand, product, and image
The traditional retail format meant that businesses only had a certain degree of control. This included the packaging and outbound marketing activities and stopped once the product was placed on supermarket shelves or in the store.
Things have changed a lot since then with D2C allowing SMEs to take control of the brand end to end. With most customers now placing as much importance on their buying journey as the product, it’s important that businesses offer an all-round high-quality experience.
This begins with the initial customer engagement, the browsing/buying journey, payment, after-sales service, and repeat targeting. This translates into increased control over the business’ brand, product, and image – and ensures a more cohesive brand experience.
More than 50% of manufacturers said D2C sales helped to improve brand awareness and boosted leads and sales for channel partners while 14% said their D2C strategy allowed them to test the success of newer and innovative products before pitching them to retailers.
Clearly, D2C is the way ahead and small businesses can leverage this to grow their business. But an online presence is the first step and Boost360 can help you take it.