The Direct to Consumer (D2C) model is taking off with a high speed. In recent years, brands have realized the merits of the self-owned and self-operated direct-to-consumer sales model. In line with the pandemic and accelerated growth of online channels, the model saw a fast acceleration and greater emphasis. One of the reports by Statista noted that the D2C sales grew by 45.5%, worth $111.5 billion in 2020 and will reach $174.98 by 2023.
But because of the new model, this domain requires a different approach towards marketing and advertising strategies. One of the challenges for managing a D2C brand is to find a balance in all aspects of business and find actual ROI, using the marketing strategies. The perfect combination of ROI comprises seamless brand growth, brand recognition, increased sales, SEO, and paid advertising that will grow the business profitable. The companies are now focusing on e-commerce marketing that relies on digital marketing more than ever before. Last year alone, 78% of the D2C brands indicated an increase in their e-commerce marketing budget.
Digital Marketing to drive as revenue channel
D2C brands currently are using different techniques to acquire customers by using techniques such as social media commerce, search engine shopping, search PPC advertising. According to a report, 93% of brands say that acquisition is their biggest priority. Out of the customers 34.6% of customers said that they first discover brands using social media, nearly 25% say that they find brands using some search engines.
Akanksha Gupta, Lead- Marketing, Beco stated, “We definitely agree with it and the brands are operating their own D2C website as a sales channel today, and it’s working tremendously well because it allows them to deep dive into each customer by helping them to understand their likes, interests and purchase behaviour which in turn facilitates a brand to build a more focused strategy for advertising.”
“However, the scalability of the business also depends on the category it operates in, so it’s paramount for a brand to weigh in its category and habits customers hold for their category and eventually cater to them in a way that resonates with them,” she added further.
Aakash Anand, Founder & CEO, IDAM House Of Brands which is an FMCG brand started in 2015 responded when asked the same question, “While social media marketing started off as a tool to increase brand awareness, it quickly found its way to help with revenue conversion. From the technical aspect, there are some platforms that give us tools like direct shop links that help bring customers to our websites and apps directly.”
Nidhi Yadav, Co-founder, AKS Clothing that sells their fashion products on different marketplaces said, “Digital marketing can indeed serve as a revenue source for a brand. It allows you to sell the products and services to more qualified customers, which result in increased revenue for the company.” She further added, “At our end, we make every effort to use digital marketing to generate new revenue streams. Our adverts appear on various social media sites to reach a larger audience. We continually keep posting product photographs and descriptions, as well as a link to our website, on the Instagram and Facebook accounts so that people may go straight to our website and look at more of our items for sale.”
Building a Community to Fuel Growth
The paradigm has shifted, now e-commerce has given more dominance to buyers. Now, the buyers have full control over their buying journey and decision making process. Today, the definition of a good buying experience has changed, earlier it was just about the purchase stage but the digitization has shifted to include it with pre and post shopping experience. The D2C model enables brands to create a community with the customers by engaging with them on a daily basis. With this, the brands can offer personalization to its customers and can resonate with more customers that can eventually lead to increased sales.
Prathamesh Krisang, Co-founder and Chief of Growth, Magicleaf, a brand that sells stevia drops made from all-natural ingredients harped on the idea of creating a community of customers “Yes, we are very serious about community building. We have already piloted our No Sugar Club with a few champion customers and will roll out this community to a wider audience soon.”
He further added, “Community building has become essential right now. With the rising cost of acquiring new customers and the low entry barrier to starting a D2C brand, it is essential to nurture solid champions who love your brand and what it stands for.”
Priyanka Salot, Co-founder, The Sleep Company that provides SmartGRID mattress which has a digitally native comfort technology told about this, “Sleep is becoming a major issue in today’s generation, not just in India but throughout the world. People are suffering from a variety of sleep problems. And the prevalence of insomnia is gradually rising. So that’s where we want to establish a community, and that’s what we’re doing. We use a lot of material with influencers and professionals to truly help our company reach its goal and vision.”
D2C brands riding high on Influencer Marketing
Under the D2C model, the brands are in direct connection with the customers as there are no middle-men involved. It became essential for brands to have a large database and have a strong relationship with the customers. As the buying power has been shifted to millennials and Gen Z, who are heavily influenced by social media platforms. In that case, micro and Nano influencers play a dominant role in creating brand awareness of the D2C brand. According to GlobalWeb Index, 54 % of social media browsing is done for product-related brand research and it also helps to gather the data analytics of the customers.
Krisang told us about their brand integrating with the influencers, said, “Our partnership with influencers has been a mixed experience. We have witnessed that working with right influencers is necessary. We don’t look at the “number of followers” when collaborating. We are more interested in knowing if the influencer has a point of view and can communicate with the audience effectively. That has worked much better for us than collaborating with influencers who have a lot of followers but not a strong enough opinion.”
Yadav highlighted from their brand’s perspective and added, “Yes, partnering or collaborating with influencers attracts higher-quality customers to the business. This is because social media users tend to be more affluent and likely to recommend products to family and friends.”
She further added to it, “Influencer marketing may substantially increase the online visibility and reach. Users on social media will learn more about the brand, narrative, who you are, and the services that the brand provides. The key to maximize the influencer approach is to make sure that the brand delivers excellent material that can contribute to the social media presence, ensuring that both parties benefit.”
Anand highlight a different lens added “The influencer marketing industry values at 900 crore for a reason. Influencers don’t have followers, they have fans. They become idols & mentors. People treat their word as the gospel truth. It’s important to understand that it’s not just the number of followers that you have to consider when you’re thinking of collaborating with an influencer- you have to consider how authentic their content is, how their followers engage with them – among other things.”
Paid vs Organic Media Campaign: Creating a Hybrid Model
Social media marketing has evolved over the past few years. The brands are creating different strategies to create engagement and bring more customers. To acquire customers, brands are using a combination of organic and paid social media campaigns. Organic Social campaign is doing any social activity without using any paid promotion whereas paid social media campaign that’s influenced by dollars by using social media posts, CPC (Cost-Per-Click) is the most common way of charging for the type of paid campaign.
“Organic campaigns & engagements are the more sustainable form of social media marketing. Any brand who has been using social media at the core of their marketing plan knows that the followers you get organically are the ones who are going to stay and eventually turn into paid customers,” said Anand emphasizing on the brand strategies.
He further added to it, “On the other hand, paid campaigns have its own advantages. You are able to atomize your audience and reach out to people who may not have come across your brand yet. The goal with paid campaigns is brand awareness first, revenue conversion second.”
Gupta also highlighted it and said, “SEO is the holy grail for any brand while paid advertising is the constant food that your brand needs. Focusing on organic traffic by involving more relevant collaborative approaches to reach a wider audience is also another way to amplify a brand’s presence.”
She also told the little information about the new social media campaign “Following the success of our first brand campaign #YoursNaturally with Día Mirza, we’re planning a more customized campaign that puts the customer first, followed by our next brand campaign that reinforces our narrative of chemical-free homes.”
Yadav added to it, “The two cornerstones of digital marketing are paid and organic content. Around 70 percent of our brand’s website traffic is generated by sponsored and organic efforts combined: Organic marketing accounts for 55 per cent of our website traffic, while paid marketing accounts for 15 per cent.”
Moment Marketing: Boon or Bane
Marketers are constantly trying new ways to communicate with the consumers. The brands have been prudent in making the use of trends to catch the people’s attention. Moment Marketing is the ability to create marketing strategies around the ongoing events happening around the world.
Moment marketing helps brands to insert themselves into the daily conversation of the live events and add a point in it so that it can catch the customers’ attention. But sometimes, it also faces backlash from the consumers if their sentiments get hurt through it. There is a thin common line that the brands need to understand while using moment marketing.
Neha Indoria, Co-founder, Boingg explained, “Yes it is a trend, whether it is useful or not is debatable. On the positive side it can give you a momentary bump on your views and on the con of course you are recognised as such hopping on a trend without having anything fun/informative/witty to say.”
She added, “We haven’t started using it as a marketing tool as at the moment we are more involved in creating a presence for ourselves and making the customer aware about the features/qualities of our brand.”
Salot added to it and said, “We use current news or events to engage our consumers in a more enjoyable and engaging manner. That is why we use a lot of memes and other types of material on social media. With that said more than 30% of our leads come from Social Media.”
Yadav told us about their brand’s strategies, “In recent years, brand moment marketing has become a mainstream phenomenon. Timing is one of the most critical aspects of developing a great piece of branded communication. When they say that time is everything, they are correct. Of course, design, copy, and other creative parameters are essential. We make sure to post on Monday, Wednesday, Friday, and Sunday, between 11 AM and 12 AM.”
She further added, “On the other hand, we publish an effective communication piece that garners increased interaction by articulating our brand’s ethos while touching on themes that are currently popular. All because we have opted to participate in a relevant and fascinating discourse to our target audiences.”
by Yash Bhatia