SUMMARY
While the ecommerce industry has been traditionally driven by deep-pocketed players such as Flipkart and Amazon, D2C brands have witnessed significant traction over the years
Besides focussing on brand awareness, D2C brands are now understanding the importance of delivering a smooth post purchase experience
Doing so requires a data-driven strategy including end-to-end order tracking, on-time order delivery and easy order return options
India’s ecommerce industry has grown unabated in the last few years as more and more people have started using smartphones to shop online. In addition, the deepening internet penetration has largely contributed to the growth of ecommerce, which is expected to grab a $400 Bn market opportunity by 2030, growing at a CAGR of 19%.
The surge in online shopping is a big boost for many SMEs and new-age retailers who have acknowledged the opportunity and have transformed their businesses online.
Interestingly, online sales increased by 25% in 2022 and are expected to reach $100 Bn by the end of this year. While the industry has been traditionally driven by deep-pocketed players such as Flipkart and Amazon (who continue to capture the majority market share), it is the D2C brands that are making in roads across India and have gained significant traction in recent years.
Their niche segment and customer-first approach has also helped them gain popularity among customers. There is also a paradigm shift in how they approach and strategise their marketing efforts compared to traditional sellers. They are more focussed on delivering a unified purchase experience — from selling products on multiple channels to offering regular tracking updates and easy return options.
Opportunities Galore But What About The Challenges?
With the increasing demand for D2C brands, the competition has also increased. This has led brands to invest in technology-based solutions aggressively to manage all their operations efficiently. While mostly the focus is on increasing brand awareness and boosting sales, D2C brands now understand that logistical glitches too can drive away customers.
Simply put, a delightful post-purchase experience is as crucial as a pre-purchase experience. However, delivering several post-purchase aspects, including end-to-end order tracking, on-time order delivery, a responsive customer support team and easy order return options can prove to be cumbersome for new-age players with limited resources.
Let’s look at the challenges faced by D2C brands:
No Single Solution: D2C brands usually have many types of deliveries and at the same time, they also need to track their returns. Big companies with many resources will be able to set processes and integrate all needs seamlessly. However, for a small to middle-market brand, it becomes a tedious task to use a single provider.
Transportation Companies Are Not Enough: Transportation companies cannot be a replacement for ecommerce partners. Delivery companies provide excellent transportation services but don’t have the right visibility from the first to the last-mile.
D2C Brands Overpay For Small Parcel Delivery: Many companies opt for the biggest players in the market that have premium pricing. As per industry estimates, D2C brands are likely to incur 15% additional cost annually when they lack tech-enabled solutions. What D2C brands don’t realise is that more cost-effective options exist in the market.
Technology Trends To Help You Grow Your D2C Business
A post-purchase experience that truly resonates with the customers requires a well-planned and data driven strategy. This also means that D2C brands must adopt a comprehensive approach, considering all aspects of post-purchase rather than isolating individual components. Not only will this help in delivering the greatest customer experience, but it will also help minimise errors, lower operations costs and increase overall efficiency.
Hence, the first step towards building a seamless post-purchase experience starts with streamlining the warehousing operations. With D2C brands expanding, there is a need for end-to-end logistics and fulfillment centres. With tech-driven fulfillment centres, brands can manage their warehouse operations by managing inventory, picking, packing, and delivering orders intelligently.
Intelligent management here refers to the use of smart technologies such as data science and data analytics. For instance, in a smart fulfilment centre, businesses can monitor the inventory level and set priorities of the SKU depending upon the demand or zone.
Last-mile delivery is another challenging aspect that D2C brands can overcome with the help of technology-driven logistics solutions. AI-based solutions help choose the best and most-suited courier partner thus, helping brands optimise their logistics costs without compromising on quality. Similarly, sellers can also offer faster last-mile deliveries with intelligent order processing.
However, the customer’s journey doesn’t always conclude with shipping, as a significant number of customers may choose to return their package for various reasons. Reverse logistics can weigh down heavily on D2C brands in terms of the costs incurred.
While advanced order tracking solutions can help identify the risk of RTO (return to origin) orders even before shipping the product, technology can help businesses with deeper insights through real-time information and reasons for order returns. The reasons can include the wrong address, unavailability of the customer at the time of delivery, and damaged goods among others. Tech-enabled solutions can further help D2C brands develop strategies to reduce order returns and increase the delivery success rate.
Forging A Stronger Customer-Brand Relationship
The customers’ expectations from the brand have changed. Online buying is not just limited to consumers ordering the products online and getting them delivered to their doorstep as customers expect more from brands. They not only expect same-day or one-day delivery of goods but also look for a wholesome experience that keeps them coming back.
At Shiprocket, our focus is to serve the ever-evolving needs of the D2C industry through technology-based solutions. We are aiming to build a one-stop logistics solution to help brands offer holistic post-purchase experiences.
That being said, digitalisation and technological advancement will continue to be the way the ecommerce industry operates. Particularly after the unprecedented pandemic, there is an increase in online purchases, providing online brands with a significant opportunity to encash.
As the D2C market evolves, it is becoming increasingly important for brands to adopt trends like hyper-personalisation, where the products are designed to the demands and liking of the customer. This will help them connect with their customers better and attract them more towards their business.
