The direct-to-consumer (D2C) model has been gaining popularity among customers for some time now as manufacturers get a lot more room to provide customized brand experiences that bring a lot more delight to consumers, which in turn strengthen brand loyalty.
According to a study, 55% of consumers prefer to buy directly from brands, and a further 40% of shoppers say they will purchase from a D2C brand in the next five years. These sentiments reflect in the consistent growth of theIndian D2C market. In fact, according to a recent report by Mordor Intelligence, the Indian D2C market size was estimated to be at $55 billion in 2022. With an expected CAGR of 34.5% during the 2022-2027 period, the total addressable D2C market in India is forecast to hit $100 billion by 2025.
With this growth potential in mind, Locus recently organized a roundtable discussion with industry leaders in the D2C segment on how brands can equip themselves to discover new last-mile efficiencies, reduce costs and engage more meaningfully with their customers with intelligent last-mile logistics solutions.
Key takeaways from the roundtable:
Customers want more:
Customers want more than just a good product. They also want excellent service, which includes fast, increasingly on-demand delivery and hassle-free cancellation and returns. Some retailers are equipped with technology that can cater to these demands, hence most brands outsource or use retailers to sell their products.
However, as the data suggests, more and more customers want to buy from brands directly and want them to solve any challenges that arise post-purchase. Brands need to adopt the latest supply chain and last-mile logistics solutions to make the D2C model a successful business strategy.
D2C trends for brands to leverage
Time sensitive deliveries:
Customers want their orders delivered at a time of their choice, not the brand or retailer’s convenience. They don’t care about capacity or fleet issues that brands are having; they just want their orders to be delivered on time and in a predictability way. Unfortunately, most brands don’t have an intelligent last-mile logistics solution that can optimize capacity planning and routing to deliver orders on customer-preferred timelines.
This is where Locus’ dispatch management solution comes in handy, with a delivery feature that can deliver orders on customers’ preferred timelines by optimizing capacity planning and routing to meet necessary demand. Our solution also enables seamless reverse logistics and frictionless cancellation for improved customer experiences.
Captive or Outsourced:
When it comes to D2C strategy, one question that often arises is whether to buy your own fleet or outsource the orders to third-party logistics providers (3PLs) or courier express parcel (CEP) services. The answer isn’t straightforward, as it depends on various factors.
Outsourcing may be a wise choice during peak periods, such as festive or holiday seasons, when demand is high and brands might be running low on delivery vehicles and drivers. However, choosing the wrong carrier could result in poor performance and unhappy customers. That’s where Locus’ fleet management solution comes in handy, enabling brands to keep active control over their fleet and avoid any delays in deliveries caused by on-ground exceptions.
Third party deliveries:
Third-party carriers are crucial agents for brands and retailers to deliver orders on time. Even companies with a captive fleet outsource some of their deliveries. However, the challenge is not in finding a third-party carrier, but finding the right one and tracking the order status. Many brands that employ CEPs suffer losses and backlash due to poor performance from their delivery partners.
During the roundtable discussion, participants highlighted their concerns around end-to-end third-party delivery management, bringing more predictability and visibility to deliveries, and providing exemplary customer experiences. A concern that all brands can relate to as third party deliveries can make or break your customer experience, especially if most of your deliveries are outsourced.
Locus’ ShipFlex can help brands choose the right carrier by giving them access to a vast network of carriers and selecting the right one based on multiple parameters such as cost, SLA, distance, geography, and track record.
ShipFlex can also provide a unified dashboard for dispatchers to track their outsourced deliveries alongside captive and customers get the same experience as well. The best part about ShipFlex is that most of this can be done automatically without much human intervention.
Sustainability:
As brands adopt the D2C model, they also need to be more environmentally conscious and plan for sustainable routing to satisfy the demands of the new generation of customers who are highly aware of how their consumer choices impact the environment. Companies need to adopt routing solutions like Locus’ automated route planning system that account for multiple real-world constraints while planning optimal routes for drivers to achieve fast delivery and decreased carbon emissions.
In conclusion, manufacturing brands need to strongly consider adopting the D2C strategy and adopting the latest supply chain technologies to make it a success. Locus has helped multiple brands such as Myntra, Tata Group, Nestle, Unilever, and more optimize their D2C strategy to improve customer experience and revenue.
Book a demo today to see how Locus can help your D2C strategy