What are the top trends poised to dominate the D2C arena for next five years

According to a recent industry report, India has an estimated over 800 D2C brands, a part of the market poised to be valued over USD 100 Billion by 2025

While the D2C business model has been around for a while, it has become more prominent and witnessed a sudden increase due to its advantages in the quest to reach directly to customers.
While the D2C business model has been around for a while, it has become more prominent and witnessed a sudden increase due to its advantages in the quest to reach directly to customers.

By Shreyansh Bhandari and Shweta Sharma

Direct to Consumer (D2C) has emerged as the growing trend for brands including some of the large FMCG traditional companies as a route to directly interact with their customers, reach them faster, provide a customised shopping experience, get customer data and also make the entire operation cost effective.

While the D2C business model has been around for a while, it has become more prominent and witnessed a sudden increase due to its advantages in the quest to reach directly to customers. According to a recent industry report, India has an estimated 800+ D2C brands, a part of the market poised to be valued over USD 100 Billion by 2025.

Given the stats, the expected growth and the investments flooding the D2C arena, we foresee five trends disrupting and dominating this space over the next five years.

Let’s now talk about the ‘Next Five in Five’!

Personalised Marketing- Collation of better quality customer data through advanced first-party data collection, consultations, surveys and mapping online behaviour has enabled the D2C brands to offer superior personalised experience – which is only going to get richer. Brands can serve their customers by creating individual experiences for each one of them, which in turn, maximizes the profit and increases customer Lifetime Value (LTV). Consumers are looking for personalised offers and experiences and this shift will drive this emerging trend. In D2C e-commerce, brands can segment their consumers into various categories through behavioral data and offer personalised deals and content. This will go a long way in not only reducing the overall marketing costs by 10-20% but also ensuring a
10-15% boost in sales conversion rates.

Augmented and Virtual Reality R–Interactive Shopping Experience- Given the current pandemic and its effects on the buyer behavior, Augmented and Virtual Reality have proven to be an emerging trend for brands going for multimedia strategies. This technology enables them to provide a try-on experience to their customers, and use Dynamic Creative Optimisation to generate content as per the likings of their customers. Most of the D2C brands will try to incorporate the same and offer a try-on experience through AR/VR. Brands like MyGlamm and Lenskart amongst others are already trying to provide an interactive shopping experience to the people who don’t want to step out.

Influencers and Social Media – Influencer marketing has opened a whole new platform for thousands of brands who couldn’t penetrate the market due to certain limitations (mostly financial budget). The rise of social media has created a new generation of online celebrities who enjoy a huge fan following over different social media platforms. Their opinion on certain products specifically related to skincare, makeup, healthcare, diet and nutrition, women’s hygiene, kids categories has proved to immensely elevate the credibility of a brand among their followers. Therefore, they are routinely approached by brands for endorsing their products, and it definitely works! Influencer marketing helps brands in building credibility, brand advocacy, market penetration, and increased engagement.

Focus on Mobile App As per Statista, 72% of Indians used mobile apps for shopping in 2020. 72% of consumers use mobile phones to browse, due to the increased smartphone penetration and availability of competitive internet offers. This is imperative to note considering for D2C brands, mobile apps will heavily dominate their user acquisition share. Demand for mobile applications amongst consumers has been growing every year and is one of the essential pillars for a D2C brand wanting to provide personalised and interactive shopping experience. Along with an immersive shopping experience, mobile apps of D2C brands will play a pivotal role in maintaining the customer retention and creating a loyalty database in times ahead.

Emergence of Niche Categories- D2C segment has indeed become a competitive segment. To meet the customers’ expectations and create a differentiator, brands are trying to explore the niche markets. In the coming years, we’ll be witnessing the launch of many category-specific brands focusing on acquiring the niche audience. The re-emergence of Ayurved, emergence of SuperFoods and the openness of customers to try new products will further give an impetus to this trend. Some of the emerging categories will include nutrition and wellness, men’s grooming products, skin care solutions, women’s hygiene, women’s apparel, eco-friendly products, customised jewellery/accessories, DIY products and kids’ fashion. As per a report published by Unicommerce and Kearney, the personal care/beauty and wellness category witnessed a growth of over 95% in Q4 2020 followed by FMCG, healthcare, consumer appliances and fashion. Some of the niche marketing examples are Skinkraft, The Moms Co., Soultree, Healthkart, Lush, Nua, and Neeman’s amongst others.

The story does not end here. We surely will see many more disruptions over the next few years and are very excited and optimistic about this segment. We are also hopeful that many of the Indian brands will be able to make their presence felt on the Global stage soon.

The authors are COO and head-media operations, Lyxel&Flamingo

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