Marketing strategy for D2C e-commerce marketplace: Aarti Samant

Written by -Aarti Samant, Digital Consultant | Business Coach | Co-Founder - Sorted, Masala Tokri

Shall we start with the basics? What exactly is the D2C marketing strategy or direct-to-consumer retail strategy that has gained popularity among retail brands?

In simple terms, the direct-to-consumer strategy involves selling products directly to customers without intermediaries such as distributors or wholesalers. L'Oreal's Color and Co is an example of a D2C offering that provides personalized hair dye kits with live online consultations from professionals.

Nike also implemented a D2C sales program, resulting in record-high sales during Black Friday and an 84% increase in digital sales. Another interesting example is a French furniture company that transformed 240 hotels into private showrooms to showcase its products.

Over the last few years, over 800 emerging brands in India have adopted a Direct-to-Consumer approach by cutting out intermediaries.

These new-age brands, including Mamaearth, Sugar Cosmetics, and Licious, are giving established brands such as Himalaya, Unilever, and ITC a run for their money.

What constitutes an effective D2C marketing campaign? Typically, it involves robust branding, a robust social media strategy, and the ability to showcase products to customers effectively. In this article, I will share some of the marketing tactics used by D2C brands and some I’ve personally implemented for several brands I consult to dominate their markets and outmanoeuvre more prominent, established brands.

 

  • ORIGINAL STORYTELLING AND PURPOSE-DRIVEN BRAND BUILDING

 

Your brand is the foundation of any marketing strategy. A product alone won't suffice in drawing people in; you need a promise, a goal, and a personality. It often entails creating a style guide, setting a tone of voice, selecting a colour palette, and solid central brand ideas. Above all, it means selecting a message, a purpose, and a brand ethos to champion.

One of my favourite brands’ whole truth foods, has a clearly defined “WHY” – They believe that “In the name of ‘healthy’, we’re being sold a bunch of lies. And they were done being lied to. So they started The Whole Truth.

Their purpose is simple.  They claim to make food so clean; they can proudly declare every ingredient that goes into it upfront and speak the whole truth because they have #nothingtohide.

When your central brand idea and purpose are well-defined, it shows in the content you create, which invariably attracts the right tribe. Over time you don’t have to spend as much on media as brands who play in the “WHAT” space. 

 

  • RETENTION-DRIVEN GROWTH  

 

According to an Inc42 report, the D2C market in India is highly saturated, with over 50,000 digital-first brands competing for a share of the market. The industry is expected to exceed $300 billion by 2030, with a projected annual growth rate of 24%. Given this intense competition, prioritizing retention strategies over new customer acquisition is crucial. The ultimate goal is to keep customers coming back for more, which justifies spending more on acquisition costs than the average order value. While this approach may seem counterintuitive in terms of pure business terms, it makes sense when you consider the potential for customers to make repeat purchases from your brand.

Personalized Customer Experiences Are Increasingly Necessary for Customer Retention Programs

Drivers of Repeat & Loyalty

A Few Customer Retention Tactics By e.l.f cosmetics:

Customer Retention Tactic 1: Leveraging hygiene Emails to Generate Referrals

Understanding that recent purchases are a key indicator for future purchases, you can embed your referral incentive in your first transactional email.

Customer Retention Tactic 2: Overcoming negative experiences with proactive measures, apologies, free shipping, and monetary incentives.

Observe how they turn a negative experience into an opportunity for a future sale. They begin by apologizing and acknowledging me as a first-time customer while emphasizing their usual commitment to timely deliveries. Furthermore, they provide an incentive for a repeat purchase by offering a $10 coupon code along with free shipping.

Customer Retention Tactic 3: Leveraging Loyalty Programs to Spur Repeat Purchases

Rather than watering down their offer to fit their financial goals, they introduce a few additional requirements. To access the reward, the customer must have accumulated more than 100 points, place another order, and ensure the order is worth $10 or more. By implementing this strategy, e.l.f. aims to align the customer's objectives with their business objectives.

 

  • BUILDING A COMMUNITY THROUGH CONTENT & UGC

One example of a D2C brand in India that has successfully built a community through content is Nykaa, 

Nykaa has created a thriving community of beauty enthusiasts through their blog, YouTube, and social media. Nykaa's blog, Beauty Book, features articles on beauty tips, trends, and product reviews, written by in-house experts as well as guest contributors. The blog has become a go-to resource for beauty enthusiasts in India, with over 2 million monthly pageviews.

Nykaa's YouTube channel features makeup tutorials, product reviews, and celebrity interviews, with over 3 million subscribers. They have also created a series called "Beauty Book Unlocked", where they take viewers behind the scenes of the Nykaa Beauty Book team, giving them a glimpse into the world of beauty blogging.

In addition to its blog and YouTube channel, Nykaa has built a strong social media presence on platforms like Instagram and Facebook. They use these channels to share beauty tips, product launches and engage with their community through giveaways and contests.

By creating valuable and engaging content, Nykaa has built a community of loyal customers who trust their recommendations and turn to them for beauty advice. This has helped them become one of India's leading beauty and wellness platforms, with over 17 million monthly active users and a revenue of over $247 million in FY21.

 

  • GAMIFICATION 

 

Gamification involves adding game-like elements to a marketing campaign or product to increase engagement and motivate customers to take action. For example, 1. Xiaomi's "Mi VIP Club" is a loyalty program that rewards customers with points for purchases and activities on their app. Customers can redeem these points for discounts or play "Mi Bunny" to win free products. This program has helped increase customer engagement and loyalty, with over 40M members and 18M app downloads reported in 2020. "Mi Bunny" also drives sales, with over 100M plays and 2.5M product sales in a single day during the 2021 Mi Fan Festival. Xiaomi's gamification is an excellent example of how D2C brands can engage customers and drive sales.

 

  • CHATBOT AI 

 

Another great example of chatbots for retention marketing in India is Swiggy, a popular food delivery platform. Swiggy implemented a chatbot on their app to provide customer support and help customers with their orders.

The chatbot uses NLP and machine learning algorithms to understand customer queries and provide personalized responses. It can help customers with a range of tasks, such as finding restaurants, placing orders, and tracking deliveries.

The implementation of the chatbot has had a significant impact on Swiggy's customer retention and satisfaction. The company reported that the chatbot had reduced its response time to customer queries by 60%, leading to a 20% increase in customer satisfaction.

Moreover, the chatbot has also increased sales and revenue for the company. Swiggy reported that customers who interact with the chatbot have a 25% higher order frequency than those who do not, indicating that the chatbot is helping to drive repeat purchases and increase revenue.

Swiggy's implementation of a chatbot for retention marketing is another great example of how D2C brands in India can use technology to improve customer experience, increase retention and satisfaction, and ultimately drive sales and revenue growth.

Customers have numerous alternatives and an ever-expanding basket of choices in today's market. D2C brands that comprehend their customer's demands and adapt their offerings to meet those needs will thrive. Streamlined delivery service and product quality are also crucial for ensuring customer satisfaction.

In summary, no single formula exists for success in the oversaturated D2C market. However, these brands can achieve profitability by implementing the right strategy, leveraging influencer marketing, analytics, and AI and constantly innovating.

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