The Impact and Implications of D2C eCommerce in 2021

Global lockdowns, disrupted supply chains, and delayed orders during the pandemic worldwide have widely impacted the eCommerce industry and the retail sector. With the closure of many retail ventures with all-time low revenues, the rise of online commerce has proved to be a boon for traditional stores. One of the trends that have grown exponentially in the past year is Direct-to-Consumer or D2C eCommerce showing enormous potential and continuing to follow the trend with a forecast to maintain a 19.2% growth by the end of 2021.

Why is D2C a current trend?

The evolving digital infrastructure equipped the consumers with the awareness and means to shop from the comfort of their homes. The new-age digital consumers now prefer personalization and direct engagement with the brands rather than dealing with the middlemen. This is the basic concept of D2C, which is why brands have entered the D2C arena to disrupt traditional retail business models. The same is felt throughout, including Beauty, Food & Beverage, and lifestyle industries.

The Post Covid era brought rapid development in the D2C ecosystem and is expected to grow over the next few years. As we witness a physical retail apocalypse, brands are seeing the benefits of going online. As per the Direct-to-Consumer Intent Index, a whopping 80% of the consumers will purchase by a D2C brand within the next half a decade. That brings a lot of promise in the industry with a subtle hint of where most businesses would put their money.

Consumers prefer D2C brands to fulfill their expectations by removing the established aggregators from the middle and directly reaching them. Hence, many global brands have leveraged the D2C model, set aside distributors or wholesalers, and dedicated themselves to the consumers via a linear channel. So, what is exactly going on in the world of the D2C?

What is happening globally in the D2C eCommerce Industry?

The willingness of companies to enter the D2C industry has grown manifold after the onset of the pandemic and the fall of the traditional brick and mortar retail stores. Brands like Beavertown Brewery saw a drop of 85% in the business during the pandemic but a 1000% increase in sales after launching their D2C online store in a short time. Many other well-known global brands are taking the plunge and setting up their business on the other greener side while generating millions of dollars in revenue via all-digital business models.

Legacy brands haven’t been far either. Long-established companies using the traditional channel for a long time now have entered the D2C realm. Heinz and PepsiCo are two big players who have established a direct relationship with their consumers for the first time.

According to a study by DEG digital, D2C growth is bound to disrupt the eCommerce industry and is one of the main challenges faced by the brands in eCommerce.

What are consumer expectations from D2C eCommerce?

Consumer expectations have always been directly proportional to digital awareness. The new-age consumers want more than ever and expect worth for their time and money from brands. So, the brands that deliver the best in this highly competitive environment would be the ones to see the success. Let us see some of the revealing stats to support this theory:

About 61% of consumers would share their information with brands to help them deliver a better and more personalized shopping experience.
A whopping 54% of the total consumers expect to receive some personalized discount or offer within the first 24 hours of contact with the brand.
51% of consumers want a personalized shopping experience through the brand’s various channels and consider it a vital part of the business strategy.
Improved security and experience at the payment gateway are a must for 26% of the consumers during their D2C experience.
Last but not least, 49% of the consumers prefer to have a same-day delivery option.

These trends result from habits of digitalization and will be nearly impossible to reverse even post the pandemic situation. The D2C eCommerce market will continue to see a rise for the next decade and so on..

So, what is it that makes the D2C eCommerce industry so successful?

What explains the success of the D2C eCommerce industry?

When a retailer commits to D2C, it means to own the entire customer-retailer relationship. The retailer has the power to leverage all available data and create personalized, unique, and more efficient customer experiences. D2C also enables the development of new revenue streams recurring in nature via subscriptions, product launches, and other customized and unique tactics to lead to consumer loyalty. In addition to this, there are four central pillars to D2C that provide a foundation for competitive advantage:

#1 Improved Profit Margin:

Once the intermediaries are eliminated, retailers experience reduced distribution costs while gaining greater control over the profit margins. The supply chain becomes more efficient, and the distribution inefficiencies are translated into extra revenue. This is possible only by leveraging a direct relationship with the customer and eliminating the middleman and other physical channels.

#2 Seamless Customizable Experiences:

The relationship with the customers returns to the retailer in revenue growth. Once the retailer can control the entire experience chain, they add an emotional value to the brand. In a D2C ecosystem, everything from eCommerce website experiences to mobile content to emailers to product messages to product delivery to after-sales services is usually taken care of by the brand itself. So, far from experience solely based on product quality, the customers start relating to the brand and hence begin returning to the relationship, leading to customer loyalty.

#3 Total Control of Data:

Once a retailer has a first-rate relationship with its customers, it can leverage this and gather access to all the real-time data needed to create valuable insights. Brands can use this data to identify patterns and consumer behaviors, analyze consumer trends and preferences and make better consumer experiences. The brands can also facilitate this control of data to find new ways of constructively exploiting it. Retailers can cluster and cater to new audiences and even include intelligent Marketing Automation flows. Businesses can serve the consumers with 100% in-house CRM software and even find ways to innovate the product as per the consumer requirements.

#4 The real possibility of Digital-First marketing:

With gaining global control of all channels, brands are now entering the realm of digital performance. This has enabled them to regulate their branding and conversion tactics under one conduit. Hence, with D2C, they can close the communication gap and make it a circle once and for all.

The bottom line is, the essence of D2C lies in the customer experience and how brands leverage the technology to commit to a linear consumer-brand relationship.

There is no turning back now with the D2C eCommerce industry. Brands love that it has become an intertwined relationship between the benefits to brands and the benefits to customers. The super-digitalization generated by the pandemic crisis globally has paid off very well for brands that accelerated their efforts in D2C, and it has a promising future in the coming decades too.

How can Krish help?

Krish is a globally known end-to-end eCommerce solutions provider. With the rise of the demand in the D2C industry, Krish is determined to provide the brands with a flawless eCommerce store that delivers a seamless digital consumer experience. Krish takes great pride in their tailor-made eCommerce solutions for well recognized D2C clients like American Flags, DuPont Sustainable Solutions, and Prolighting.

D2C eCommerce

As Head - Digital Marketing, Zenul leads the marketing and branding at Krish. He brings with him an in-depth understanding of the evolving digital ecosystem and has a proven expertise and experience in strategic planning, market and competition analysis, creating and implementing client-centered, lead-gen and brand marketing campaigns. He has a heart for technology innovation and has been a keynote speaker on various platforms.

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