Here are the thumb rules D2C businesses should apply when adapting technology to achieve operational efficiency and enhanced customer experience
New Delhi: The direct-to-consumer (D2C) market in India is at an exciting juncture, with brands redefining how they operate, innovate, and engage with consumers.
But what does the future look like for these brands as they adopt technology?
In a panel discussion titled ‘Building a brighter future for D2C brands in India leveraging technology’ at the India D2C Summit 2024 by Images Group, a retail intelligence company, founders including Richa Kapila, co-founder, D’chica; Akash Valia, co-founder, Secret Alchemist; Mohit Malik, VP & Head – Digita Business, Heads Up For Tails; Nitin Jain, Founder, Indi Gifts; and Pratik Mukherjee, Head of Business – Beauty, House of Masaba, moderated by SAP’s senior customer advisory specialist, Anshuman Wahal shared their insights on the role of technology in future growth for D2C businesses.
The discussion highlighted that while technology is not a cure-all, it is an enabler for D2C brands looking to thrive. Operational efficiencies, AI-driven solutions, and strategic omnichannel approaches are the pillars supporting this growth. Whether a brand is in its early days or the scaling stage, those leveraging the right technologies and preparing for future trends will not just survive—they will lead the industry into the next era.
Here are 5 Strategies D2C brands can employ to leverage technology for growth…
Understanding areas for tech intervention
Technology can help D2C brands grow in two areas: Customer experience and operational efficiency. Mohit Malik of Heads Up For Tails highlighted that while enhancing customer interactions through optimized websites and apps is crucial, true growth lies in perfecting the backend operations.
“Efficient post-order processing, inventory management, and logistics optimization have emerged as pressing challenges, particularly in markets like India where cash-on-delivery (COD) and address inaccuracies lead to significant return rates and losses,” he added.
Addressing challenges
Indian D2C brands face hurdles unique to the local market. These include high return-to-origin (RTO) rates due to COD and incorrect or incomplete addresses, both of which impact profitability and scalability.
Brands often see RTO rates as high as 20%–25%. This impacts bottom-line profits and necessitates investments in emerging technologies that can refine address accuracy, improve last-mile delivery, and balance logistics costs.
Using tech for automation
Early investments in automation tools and efficient supply chain practices can save time and resources later. Entrepreneurs should prioritize what goes beyond the top-line metrics and focus on real profitability, where revenue translates into actual bank balance growth.
Adopting AI
Richa Kapila shared how D’chica leverages technology to streamline various business departments, from marketing to customer support. AI-powered tools help reduce fixed costs and improve efficiency, allowing businesses to scale without a significant increase in headcount.
Chatbots that simulate human-like conversations enable brands to handle customer interactions at scale without diluting the experience. This aids in maintaining customer loyalty and nurturing ongoing relationships, which is pivotal for retention.
Facilitating omnichannel through tech
Expanding into offline retail remains a daunting task for D2C brands accustomed to the digital realm. Akash Valia of the Secret Alchemist pointed out the differences between online and offline operations, emphasizing how technology bridges this gap by providing data-driven insights for better decision-making.
Platforms powered by AI can now recommend optimal physical store placements based on digital consumer data, reducing the trial-and-error approach traditionally seen in offline expansion. Technology not only aids in discovery but also detailed sales tracking to ensure that inventory management in stores matches the level of detail brands enjoy online.
Brand representatives agreed that staying agile is vital in today’s fast-paced industry. The future promises innovations in quick commerce and other tech-driven solutions that keep brands aligned with consumer expectations.
Pratik Mukherjee of the House of Masaba mentioned the constant evolution of consumer needs and the necessity of brands to keep up. Whether through AI-driven marketing strategies, better data analytics, or integrating newer commerce platforms, technology’s pace will only quicken, and brands must be ready to adapt.
