Future of D2C Business Model: How it will change the Consumer Market
Like everything else, the democratisation of the consumer market has been facilitated by the digitalization of retail. All micro-consumer categories are now recognised and better supplied than ever before by a multitude of emerging and well-known D2C firms. There is room for established businesses to grow and more new firms to join the D2C revolution, where it is predicted that the total addressable market would exceed Rs. 7 trillion ($100 billion) by 2025.
The Important Digital Change
In the previous two years, there has been a significant and fundamental movement towards online business. This has been supported by the influx of digital channels for everything - from e-commerce to connecting with digital media to developing brands, etc.
Brand owners don't have complete control over their platforms, the packaging they can use, marketing, customer data, policies, content space, etc. in traditional media and retail channels. Today, brand owners have the chance to engage customers even before they make a purchase because of the sheer volume and variety of customer engagement modalities, such as the numerous social media channels.
With complete control over every part of the customer experience, brands can successfully increase the lifetime value of a customer by communicating with them in a much more calibrated and focused way. This occurrence serves as a tipping point for the exponential rise of D2C brands.
Customers in Generation Z who heavily rely on digital platforms for news and trends have a stronger propensity to try new businesses and make purchases online.This expanding personal buying trend is ideal for D2C's targeted and customised shopping proposal.
Culture of "Made to Taste" products
This is where specialty groups are going to emerge now that consumers have had their fair share of online buying experiences. These market groups go beyond typical purchasing to explore what's new, what's available, and what appeals to them in order to form relationships with a brand created by someone who shares their viewpoints.
Numerous D2C businesses are already thriving in the nation and serving certain niches. This opens up the possibility for other business owners to develop ancillary goods and services for D2C brand clients.
As growth brings its own set of issues and opportunities, there will be a gold mine of unmet demands for specific user niches for new innovators.
The industry's micro-segments will therefore show trends in the D2C led eco-system, which will be evident in solutions like women-specific credit cards, reward and loyalty aggregators, zero to one consulting, etc.
Rising Industry enables “outside of their area” of expertise
This makes it clear that well-known international companies will attempt to expand their offerings outside of their primary industry. We have observed this pattern throughout the previous few months in the following ways -
i) Portfolio D2C SMB acquisitions by large size retail giants
ii) The largest retailers in the world entering the Indian market by acquiring the bulk of local e-commerce businesses
iii) Public offerings by fast-growing logistics and fulfilment businesses
iv) E-commerce SaaS businesses that are experimenting with payment services, last-mile delivery, branding consultants, etc.
This tendency will continue to grow in the future as big businesses don't simply want to shop. To maintain their retail market share, which is supported by one of the largest numbers of millennial and Gen Z consumers anywhere in the globe, they must venture outside of their comfort zones.
It will be crucial for larger D2C platform technology companies to enter new vertical markets and provide additional value-added services in order to make it difficult for merchants to leave them once they get bigger.
Making the scaling process easy for D2C business owners so they may continue to collect money for services they aren't supposed to provide on their own. The more value they can pass on to end users, the simpler it will be to concentrate on the purpose as a primary service. Therefore, quite evidently, it will be a Win-Win for all parties.
All the stars are aligned to support D2C in the consumer market. Thus it is crucial to continue concentrating on effective product-market fit, the consumer value chain, and the brand's narrative. The idea that each and every one of us has the potential to create a company is not absurd. We're approaching the turning point where end customers, as opposed to today, will be the ones making the decisions and making the purchases.