Exploring Aspirations, Data & Innovations: A Deep Dive Into The New Consumer Playbook For D2C Success

Today’s D2C consumers have an inherently digital approach. They spend considerable time online, not just shopping but also engaging with brands through social media, blogs/vlogs and digital communities. In fact, platforms like Instagram and Pinterest now serve as main discovery engines for direct-to-consumer brands.

New-age consumers seek visually appealing content and intriguing storytelling aligned with their values and aspirations. Plus, they demand a frictionless, mobile-first experience, intuitive browsing and a hassle-free, secure checkout. Although this shift in consumer preference has unlocked new opportunities for brands, it also presents new challenges.

According to marketers and retailers, at the heart of this transformative change lies the shopping trends of millennials (aged 28 to 43 in 2024) and Gen Z (12-27). A 2022 Capgemini survey pegs these tech-native generations as the most significant demographics in the D2C market, as 74% of Gen Z shoppers and 62% of millennials purchase from D2C brands. 

As technology has paved the way towards an all-new era of connected retail, big brands specialising in brick-and-mortar retail often struggle to cope with digital-age customers. But for D2C brands, the blurring of boundaries between digital and physical commerce and the consumer preference for value over price present interesting opportunities to redefine customer engagement.  

To decode the changing landscape, Inc42 and fintech startup Cashfree Payments recently hosted the first roundtable of the D2C Leader’s Boardroom Series in Delhi. The discussions centred around one of the most relevant themes – Exploring Aspirations, Data & Innovations: A Deep Dive Into The New Consumer Playbook For D2C Success – and brought together as many as 13 D2C founders and thought leaders.

The roundtable was moderated by Renu Bisht, founder and managing director of Commercify360, with participation from:

• Vinit Jain, cofounder & CTO, cityfurnish
• Harshit Vij, founder & CEO, Freecultr
• Mohit Garg, cofounder & CEO, Assembly
• Shalabh Gupta, cofounder, NUUK
• Divij Bajaj, founder & CEO, Power Gummies 
• Deepanshu Manchanda, founder & CEO, Zappfresh
• Rithish Kumar, cofounder, Pee Safe
• Abhishek Agarwal, cofounder, Farmley
• Piyush Wadhwa, head (product & engineering), SleepyCat
• Sumant Kakaria, cofounder & CEO, Solethreads
• Amit Bansal, cofounder & CEO, 91Squarefeet 
• Harsh Gupta, chief revenue officer, Cashfree Payments

How Aspirations Are Fuelling D2C Growth Beyond Tier I

The consumer market dynamics in India are witnessing a paradigm shift as the middle class tries to adapt to economic challenges and a dip in aspirations. Although FMCG leaders have expressed concerns about the shrinking middle-class spending, the D2C ecosystem has a counter-narrative. Tapping into Tier II and III cities, most D2C brands have found that the number of aspirational buyers is soaring while low-cost digital access continues to unlock new markets.

“The real aspirational consumer is outside the Tier I cities. You will find them in Tier II and III; hence, we see more demand there,” said Sumant Kakaria of Solethreads, a casual footwear brand. “Data often surprises us when we see how these markets respond. For instance, we recently opened a store in Dehradun based on data insights, and it is doing really well. That’s where D2C truly shines, meeting aspirations and creating access where it was previously missing.” 

 

Shalabh Gupta of the home appliance brand NUUK has a different approach regarding consumer behaviour. “Looking at India through the lens of metro, Tier I, or Tier II is outdated. Age and income are the real metrics defining the market, as aspiration transcends geography,” he added.

From CoD To UPI & BNPL: E-Payments Are Improving The Bottom Line

As digital access fuels aspirations and changes consumer behaviour in smaller cities, the country’s digital payment infrastructure is another key enabler steadily building trust and convenience among Indian consumers.

India’s e-payment ecosystem has matured quickly, driven by the proliferation of digital payment solutions and the transformative impact of ecommerce. Although cash on delivery (CoD) is still prevalent here – nearly 60–65% of shoppers use it, according to various reports – the introduction of UPI (unified payments interface) and small-value credit transactions like BNPL (buy now, pay later) has fostered trust and convenience. This has resulted in a clear shift towards prepayments, enabling more conversions for D2C brands and reducing returns.    

Harsh Gupta, chief revenue officer at Cashfree Payments, also lauded how the ecosystem had grown. “A decade ago, CoD accounted for 80% of the transactions. The gap has narrowed today, and the ratio is closer to 60/40 or 65%-35%. Indian consumers’ trust in ecommerce marketplaces like Amazon and Flipkart has grown significantly, and innovations like UPI and better checkout experiences have made online payments more seamless.”

Superior Experience Makes D2C Shoppers Happy

If digital payments are a great business enabler, premium customer experience is another key differentiator, building brand loyalty for the long term and driving growth. Boosting customer interaction across all touchpoints helps extend engagement throughout the journey, from initial brand exposure, product display and delivery to after-sales support. Moreover, seamless cross-channel engagements enable well-rounded conversations with customers, helping brands identify friction points, resolve issues and inspire customer trust. The aim is to personalise outreach and enhance performance to maximise customer lifetime value(CLTV). 

Vinit Jain of cityfurnish, an online furniture and appliance renting startup, dived into why brands should focus on deep linking and a holistic understanding. “More than pricing, consumers today are value-sensitive. They will be willing to pay a premium if you are providing value. But the trust factor, product messaging and overall experience on every channel should truly set your brand apart.”

Data-Driven Insights Enhance Customer Retention 

In consumer retail, customer retention and repeat purchases are critical to reducing customer acquisition costs (CAC) and driving sales. A deep dive into customer behaviour, activities, preferences and other metrics – essentially data-driven retention analytics and insights – can reduce churn rates.

However, knowing the whole picture means only half of the battle has been won. D2C brands, or any company, for that matter, need to identify their high-value customers, analyse retention criteria and implement appropriate measures to fix issues and tailor messages for meaningful communications. 

With these data insights, businesses can decide on product offerings, marketing strategies and customer engagement tactics that ultimately build long-term loyalty. They should also monitor customer trends and feedback and make continuous and necessary adjustments to optimise operations and stay ahead of the competition.

Divij Bajaj of the nutraceutical startup Power Gummies shared a use case. “As our product [a packet of 30 gummies] typically lasts a month, tracking purchase dates is essential. After 20 days or so, we remind our customers to reorder. Users should consume their gummy supplements regularly for the benefits we promise.”

According to Bajaj, tracking the sales cycle and engaging with customers through reminders are vital for retention and positive product outcomes. “This data-driven approach helps us maintain customer loyalty and repeat purchases,” he added.

Abhishek Agarwal of Farmley, a wholesome snacking brand, emphasised the role of customer feedback and data insights for sustainable growth. “It is critical to understand what customers like about a product and scale up accordingly. When the right product reaches the right customer, it drives retention and loyalty.”

The Road Ahead For The D2C Ecosystem 

A McKinsey & Co. report aptly observed that businesses must harness new-age technology as a core enabler of next-generation consumer retail. Think of how the rapid adoption of AR-VR innovations can provide immersive experiences to digital-first shoppers rather than endlessly browsing online storefronts. 

Kakaria of Solethreads enthused about 3D stores of the future where shoppers could engage with virtual products, and the focus would shift from passive browsing to an experiential path, enabling them to discover, try or even design what they want to purchase.

Additionally, the rapid foray of AI-GenAI in every sector and every sphere of life is expected to bring about radical transformations in product visualisation, personalisation and experiential marketing. 

A few participants, like Manchanda from meat and seafood e-retailer Zappfresh, think AI and its many iterations are still evolving and will take some time to culminate. However, there was an overall consensus that AI-GenAI would be moving towards hyper-personalisation, creating highly customised products, services and content to attract shoppers.

The future of D2C will ultimately depend on how brands interweave innovations and everyday applications. They must fine-tune this approach to resonate with their target audiences and set up a foundational pillar for upholding consumer retail’s holistic transformation over time.