Today, the FMCG industry is witnessing a massive shift with the entry of D2C (Direct-to-Consumer) brands. Avin Agarwal, Director of Haldiram’s, sees this shift as a pivotal change in how organizations engage with customers. He believes that the move towards D2C represents a fundamental evolution in customer engagement, complementing traditional store-driven sales methods.
What is D2C?
D2C is a system of operations where manufacturers or brand owners have a direct link with the customers instead of going through middlemen. This model has received huge attention in India, where consumers are more tech-savvy and have become more demanding in terms of brand value. D2C not only translates to better consumer service but is also likely to translate to a reduction in the price consumers are likely to pay.
Let's delve into the details of how D2C has impacted the FMCG industry.
The new source of competitive advantage
D2C is becoming the new source of competitive advantage. In the traditional structure and model of FMCG industries, competitive advantages were founded on innovation, channel accessibility and scale. Now, with D2C, the FMCG companies can analyze the new opportunities for product invention and take advantage of the new segment of the market.
Customer Cost
Through direct contact with consumers, companies have the benefit of developing more effective and relevant campaigns. These brands can ensure that the costs associated with acquiring new customers are as efficient as possible and fuel growth in the long run with the help of data analytics and personalized marketing campaigns.
Local Yet Global
D2C brands have gone beyond India and expanded their entire presence worldwide. These brands are aiming at expanding their market reach as the global demand for genuine locally produced products continues to rise. Most Indian D2C brands are disrupting the health and wellness industry through their digital solutions and selling to international clients with quality natural products. This combo of local and global aids Indian D2C brands to build a connection globally.
Personalization
The successful rise of D2C brands is guided by the personalization of communication, products, etc. Technology can effectively be used in the launching, management and improvement of customer experiences through marketing. Research also reveals that a large number of consumers are willing to spend more for customized products; therefore, customization is crucial in the D2C approach.
Engage Beyond Marketing
Many FMCG brands use the D2C concept by creating their channels to connect with consumers and foster immediate activation. Although e-commerce is a crucial element, it is equally important to work with partners and retailers to manage the risk of competition. In this way, the D2C brand can complement the activities of partners and fill gaps in the consumer journey from acquisition to retention.
D2C can be described as an unstoppable path and those willing to enter the market have endless opportunities at their disposal. These forms of direct relationships are the key players in determining the future of commerce in India while enhancing growth and providing a more specialized consumer experience.
Businesses stand to benefit from a competitive edge in a market that is always changing as they adopt this new approach. Avin Agarwal’s insights highlight how crucial it is to use both traditional and modern retail strategies to thrive in the consumer-driven market of today.
