A recent report by Unicommerce indicated that over the past year there has been a 65% increase in brands developing their own websites in India, which led to an increase in self-shipped orders. At the same time, brand websites have witnessed 88% order volume growth compared to 32% for e-commerce marketplaces.

Unlike “D2C brands” – companies born and bred on digital mainly, major consumer goods companies and brands, which have always relied on legacy retail, have only recently accelerated the process of building their own robust direct-to-consumer (D2C) ecosystems. It took a once-in-a-lifetime pandemic to push the throttle to full-speed. But, while Covid-19’s effect on supply chains and distribution may have accelerated their plans, several marketers say they’ve been on this transformation journey for a while, driven by fast-changing consumer needs.

Now, legacy brand marketers are getting serious about D2C strategies which give them direct access to consumers, more control over distribution through digital channels, and the opportunity to engage more meaningfully with consumers at a time of great uncertainty.

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From digital natives to first-time users, consumers today are looking for seamless and unique experiences, especially when they are online. Brands are tapping directly into their moments of consumption with the right product at the right time. Confectionery and snack major, Mondelez India, has been developing product bundles for all sorts of occasions – from midday snacking and Zoom parties to Netflix nights. The rise in impulse purchases of indulgent foods and in snacking gave the company a cue to even introduce customised packs for birthdays, festivals, and even weddings, says Garima Dikshit, head of e-commerce, Mondelez India. The company’s gifting commerce site provides the ideal testing ground and launch pad.

With the e-store for all products under brand Saffola, homegrown FMCG major Marico is also able to “cater to the specificity” of the consumers, says chief marketing officer Koshy George. The company learned that consumers often buy honey and oats together. Marico latched on to this and offered a combination of its oats and recently launched Saffola Honey, in order to pass on value to its consumers. The brand, however, was caught in the recent controversy over adulterated honey. To put consumer doubts at rest, Saffola is now encouraging people to get the Saffola Honey Certificate of Purity for every bottle they buy to be assured of quality.

George tells Brand Equity that Marico’s “e-commerce sales have grown by nearly 40% in H1 FY21. As a result of which the share of business has increased from about 1% annually in FY17 to 8% in Q2 FY2.”

With direct selling channels, FMCG companies can also monitor shopping trends more closely. ITC’s recent consumer dipstick stated that with the emergence of D2C consumers are much more aware of product portfolios now.

Brands’ direct-to-consumer strategies are not only designed to boost sales but are also focused on building communities. Procter & Gamble (P&G) India is doubling down on its community-building efforts. Girish Kalyanaraman, senior director – brand operations, P&G India, says, “Many people are going through similar lifestyle and life-stage challenges in the new normal and brands can play a vital role in supporting these communities.” For the baby and toddler brand Pampers, the company launched the ‘Pampers Baby World’ app, for parents. The app serves as a pregnancy and baby care guide with information on pregnancy milestones, baby development, baby care, baby and mother nutrition requirements and parenting tips.

It’s not just the food and personal care brands that are going straight to the consumer. Electrical equipment company, Havells India is significantly invested in its e-store. The company has brought together a team of micro-subject matter experts and is also leveraging customer intelligence to make better business decisions. “Consumer behaviour has settled into the new normal by now. There has been a tremendous shift to mindful shopping with the lines between what was hitherto essential, and non-essential and discretionary items blurring,” says Amit Tiwari, vice president – marketing communications, Havells India. Tiwari tells Brand Equity that during the lockdown phase, more than half of service issues were resolved through video calls or do-it-yourself videos on its social media channels. D2C services also serve as a way to build brand loyalty, believes Tiwari.

Personal care brand Nivea’s website currently serves 17,000 pin codes across the country. “This is helping us get a micro-level understanding of the demand clusters of specific assortments which is beneficial for both our online and offline channels,” says Sachin Killawala, marketing director, Nivea India. He adds, “We are also clearly understanding the impact of different offers on every individual product and trying new value propositions like loyalty programs.”

Experts say that for long-term success of these D2C models, companies will have to invest more and get their data architecture right. “Streamlining customer data to use for future success is critical,” says Pooja Jauhari, chief executive officer of WPP-owned agency The Glitch. This will not only help in acquiring new customers and improve the conversion funnel, but also enhance engagement strategies.

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At the moment, it seems, the big consumer companies are betting big on their D2C offerings to supplement other online and offline retail channels and capture more demand in the post-pandemic world. But will the popularity of direct-to-consumer models among these brands continue to rise as the world inches back to the “old normal”? Will companies continue investing or will D2C become just another marketing buzzword from the year 2020?

BE Snapshot

Major consumer goods companies are leveraging their own D2C ecosystems to engage with consumers on a more meaningful level and build brand loyalty.

With the emergence of big brand D2C, consumers are much more aware of product portfolios.

Marketers are gaining a micro-level understanding of demand clusters which is beneficial for both their online and offline retail channels.

Getting the data architecture right is critical to acquire new consumers, improve the conversion funnel and enhance engagement strategies.
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