How to stand out from D2C Competition & about D2C vs B2C
D2C vs B2C and How to stand out from D2C Competition
D2C is a model and unique business model which is at its peak after digital evolution. A customer who wants to change their lifestyle organically, their significant choice is D2C brands. And the rise of D2C brands changed customer behaviour drastically. Let us discuss a lot about D2C and a little about B2C.
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What Is D2C?
D2C meaning Direct to Consumers. This business model is where manufacturers or businesses directly sell their products to consumers without any middlemen. Selling products or brands now to customers feel magical, but capturing customers in the market takes much work. The role of 3PL is crucial for D2C brands to get their brands to consumers. 3PL is third-party logistics with a warehouse supply chain and delivery worldwide. Find out how to start an eCommerce business in India by clicking the words.
What Is B2C?
B2C meaning Business to Consumers. It is one of the old and traditional models where a business or manufacturer sells their product through a merchant or third-party platform. As the product may or may not be delivered through an intermediary, B2C companies are not D2C brands. Thus, D2C is a subset of the larger B2C business model. Amazon and Flipkart are one of the best examples of online B2B brands.
D2C vs B2C
Many people see B2C and D2C as the same since they both sell products. However, it isn't. The majority of B2B manufacturers sell their products in bulk. On the other hand, direct-to-consumer eCommerce involves manufacturers selling a single item or a few items directly to customers. Let us see more details about both models.
Benefits of D2C
Complete Control Over Brand:
Each step of the buying process is handled by D2C businesses, from research to purchase. It will allow them to manage the customer experience better and, as a result, their brand's reputation. To present and sell its products, it does not need the opinions of retailers or distributors. You can control many aspects of a business by selling your products directly to your target customers. You can, for instance, build a direct relationship with your customers and gain more insight that helps grow your brands.
With direct-to-consumer marketing, manufacturers can launch their products on a smaller scale, test them with selected demographics, and gather feedback. Thus, manufacturers can find out what their customers want, develop products that sell, and improve their products as needed. By using those customer insights, you can build a unique brand.
Quality over Quantity:
In B2C businesses, bulk sales are preferred, where quality may be compromised. However, since D2C products are niche-based, they focus more on quality than quantity since they have a smaller customer base than B2B. With D2C businesses, waste can be reduced since they have more information about their customers' usage.
Authenticity and Loyalty:
It has become more important for younger generations to be selective about where they spend their money. Before making a purchase, they do more research online and only trust high-quality items. Through targeted D2C marketing campaigns, this engagement increases brand loyalty and builds strong relationships.
Drawbacks of D2C
Limited by Products:
Today, buyers need to be able to try a wide variety of products where D2C brands don't quite work. They have very few products because they are niche-based. In this situation, D2C needs to launch more unique products, or they will need help to sustain themselves in the market. D2C commerce is limited to personalised items like smartphones, wearables, clothing, footwear, and other non-personalized things like consumables, groceries, home decor, or other non-personalized items.
Difficult to Scale:
D2C doesn’t work unless you have excellent brand visibility and distribution over a large geographical area. Most D2C product companies focus on Products, Not Communication. It does not allow them to collect customer data, which is crucial for scaling.
As a result of the ease of entering the D2C market, hundreds of companies are moving towards this model. A huge crowd is waiting to copycat your unique product, which leads to you losing your brand's authenticity if you can only scale slowly. And your targeted audience is also tiny compared to B2C; it is challenging to stand out from the crowd.
You have spent much time on research, product development, etc. Each of these factors affects your pricing factor. It was previously discussed that copycats place their prices much lower than yours, causing you to lose money.
Benefits of B2C
Easy to Scale:
As expected, the B2C model can be expanded across various industries and geographies. Businesses can add several products without worrying about scalability since multiple selling channels exist. The size of the B2C targeted audience is also enormous. It is easy for them to scale up when it comes to scaling up.
Massive Number of Products with low price:
By leveraging digital sales and marketing strategies, the B2C model helps companies reduce the price of their products. In addition, they offer a wide range of products to sell at low margins. They only care about selling many products and earning much money. For example, all ITC FMCG products are priced low, yet they have captured a significant market share.
Omni Channel Sales and Distribution:
Using multiple sales channels, such as social media, store outlets, online sales, and e-commerce platforms, increases market presence. Many paint companies in the market conduct marketing through multiple channels and raise brand awareness. Their products are available all over India through distributors and dealers, making it easy for consumers to buy.
Drawbacks of B2C
Dependency on merchants:
B2C businesses rely heavily on merchants who supply them with their products. Without them, they cannot survive in the market. The main challenge B2B store owners face is not getting credits from merchants, which makes them invest more.
As discussed earlier, they must create spacious storage space to attract clients. Furthermore, they should invest more in marketing to capture the market. In addition, they need to invest in stocks and workforce, which are in high demand today. Today, most B2B brands face workforce issues.
D2C Competitions and the Journey:
The coronavirus (COVID-19) has quickly caused drastic changes in markets and consumers' behaviours. During COVID, Google India reported very high search volumes for D2C brands. As a result of Covid, consumer lifestyles began to shift toward organic. Customers' preference is for brands that are quality-oriented over quantity-oriented.
Business Today reports that the direct-to-consumer market will grow to $60 billion by FY27.
Importance of AI Tech in D2C
Our application's advanced technology will help us gather more data for creating new best-selling products and changing the game. As an example, let's look at a live case study.
One of the companies with a more advanced website is Myntra. Their website has very advanced artificial intelligence. After entering your size measurement, you only get size-specific recommendations. You will get suggestions based on your same-size pants, and today, much data is used in their advertising. From Myntra, we should learn to give customers what they want. With the Flipkart backend, they have many customer data and will use it to create the following best-selling fashion products. Their feature goal is to provide fashion based on artificial intelligence. Many companies develop their D2C brands using advanced technology. As a result of AI, they can forecast everything based on data. Personalised AI recommendations influence consumer decisions.
A brand which tells a story that gives a personal touch to its customers will bring sales in the D2C market. Here is a lively example:
- Our eCommerce SaaS product provides websites and apps for D2C eCommerce businesses. We are making much money and selling a lot. It is mainly due to the story we are telling our leads. Our tagline is that we do not sell, but we scale. If any customer uses our SaaS product to bring their web and mobile online presence, their business will look like a big business, or they have invested much money in it. Their customers are more likely to trust them as a result. We promised to scale their business and delivered. Regardless of their marketing strategy, we only promise sales that are independent of them. Contact us if you want your D2C eCommerce business to go live. Our company is one of the leading eCommerce website development companies in Coimbatore.
- Another example of story-based D2C marketing is Ghee Sales, which are currently trending. Many direct-to-consumer milk brands claim that we prepare ghee on full moon nights, which have a higher cosmic energy than regular nights. Ghee made on this night will have a higher nutritional value than ghee created on other nights. This is not a new model. Traditional farmers are the only ones who do this. However, some brands make it their story and impress their clients. People who want something other than ghee also came to their website and saw what full moon ghee is.
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Word of Mouth and Referrals:
As soon as your story-based marketing strategy is successful, you will get much word-of-mouth that speaks about your product, increasing the impression of your brand. Additionally, your brand looks very real and is very memorable. Sooner or later, all will get sales. As soon as your old clients are satisfied with your products, they will refer you to their friends. Leads from referrals always have a higher conversion ratio than leads from other marketing channels. In addition, we give many references to D2C organic products that we have used and are satisfied with. Post testimonials as videos or Google review on your landing page to increase conversion ratios.
Spend on Digital Marketing:
All D2C brands should spend money on digital marketing. Most D2C brands are hesitant to spend on Digital Marketing. Additionally, we noticed that many of our clients needed more time to spend money on Digital Marketing. Our goal is to convince them to invest in digital marketing to enhance their D2C brand. Assign a digital marketing budget to digital marketing every month to bring more impressions towards your brands. If you don't have much funding, start with small Facebook ads, which will give an immediate return on your spending. It would help if you focused on SEO in the long run.
It would help if you had a coherent connection between your blog, vlog, YouTube channel, Facebook page, and Instagram account to practise digital marketing effectively. Don't overspend but spend.
It is impossible to avoid influencer marketing when it comes to D2C brands. The best example of influencer marketing is a food vlog. Check-ins at restaurants will increase dramatically after an influencer visit. If you own a d2C pet product brand, you can sponsor or host some pet shows and invite all influencers that will enhance your brand's value. Identify the best influencers based on your industry audience by analysing many influencers. After choosing the influencers, contact them and ask them to do a vlog. Small D2C brands can send them products for free and ask for testimonials on their landing pages to get good conversions. In recent years, we have seen a lot of D2C brands getting reviews from cinema celebrities and promoting their products in very different ways. For example, a drinking brand company became famous after Virat Kohli became a customer.
The sales funnel is an essential concept you should read about if you are still familiar with it. It would help if you created a sales funnel for your D2C brands to avoid spending a lot on digital marketing. It is a simple sales funnel for a D2C brand.
- Each lead should be sent to a tracking page with tracking codes via ads, influencer marketing, SEO, or social media marketing.
- Get information about customers, such as their mobile phone numbers and names.
- Give them regular offers with an SMS or a personalised Whatsapp campaign to bring more attention to your brand.
- Tracking codes allow you to do retargeting, which is more effective than standard advertising.
- Until they become a regular client, do it consistently.
Convert Customers into Product Creators:
It would help if you took better care of the early customers of your brand. You should assign a separate person to bring feedback to support and encourage customers to purchase your products. As a result of getting insights from clients, many D2C brands created new products and made them the best-selling products. Therefore, we recommend that you convert your clients into product creators. If you are launching a new product, give it away as a gift to your customers. Check out some practical reviews of the product. Release it on the market if you encounter any issues.
Example of D2C Vs B2C
Examples of D2C brands :
D2C brand with skincare and beauty care products based in Gurgaon that became extremely popular during COVID. They have a solid online presence but are furiously expanding their offline presence. The company is now valued at 100 crores.
The strength of their online presence and storytelling strategies has impressed us a lot. The Two Brothers brand is a direct-to-consumer brand that offers traditional organic products from farm to home based in Pune, Maharashtra. Additionally, they provide some unique products.
This is also a D2C brand with organic products based in Coimbatore, Tamil Nadu. In the past, we have used these products. They must maintain quality. Additionally, they offer traditional rice varieties that other organic brands do not.
Examples of B2C brands
Aditya Birla Fashion and Retail:
The Aditya Birla group is unavoidable in the fashion market.
They are known for their fashion brands
- Louis Philippe
- Allen Solly
- Van Heusen
- Peter England
- Fred Perry
- American Eagle
- Simon Carter
Aditya Birla Fashion and Retail Group own and market these fashion brands. However, they do not manufacture it. Marketing and sales are their responsibilities. It is an excellent example of a business-to-consumer (B2C) brand.
Regarding FMCG Products, ITC is one of the market leaders. Let us see their brands and products.
- B Natural
- Engage Perfumes
- Shower-to-Shower Powder
- Mangaldeep (Pooja Agarbattis)
- Homelites Matches
You may be familiar with ten or more of the brands you regularly use daily. Therefore, only they are the market leader in FMCG. It is one example of a B2C brand from the FMCG industry.
You are all familiar with this brand, and we hope you have used it at least once in your lifetime. Business-to-consumer brand Amazon is the best platform for connecting vendors and sellers online. An excellent example of an online B2C brand is Amazon.
The key takeaways from D2C Competition and more about D2C vs B2C