Mangesh Panditrao is the co-founder and CEO of Shoptimize. He has a total of 21 years of experience in India and the United States with extensive knowledge of technology and its role in business. Mangesh was educated at Purdue University in the United States, and spent seven years in the US in several consulting roles. He began his professional career as a software engineer at Infosys. He subsequently took up roles at Stanley Technologies, JDA Software Group and Exact Software, assuming roles related to supply chain management and the implementation of software solutions. In 2007 he founded his first company, Niyuj, targeting mid-market companies to implement enterprise software solutions. He handled new market expansion, pre-sales, sales, project management and IT strategy. The experience taught him what building and running a new business entailed and he carried those lessons into his next venture, which was starting Shoptimize in 2012 to cater to the increasing number of Indians doing their shopping online.
The Covid-19 pandemic brought about paradigm shifts not only in the way business operates but also in the kinds of expectations and preferences customers have. Now, buyers expect 24×7 brand availability online, as well as a lightning-fast shopping experience that combines variety with value for money. While digital-first brands have found this relatively easy, traditional brick-and-mortar retailers have struggled. It is clear that brands hoping to survive in this dynamic new environment will have to pivot swiftly to an omnichannel approach, one that includes D2C selling in particular. Here, we discuss how big brands in India have made the shift and benefited from it.
How customer behaviour has changed
When the pandemic hit, customers were forced to quickly rethink all their shopping behaviours. The number of in-person shopping trips declined rapidly, even for necessities like groceries, to be replaced by consolidated trips to ‘stock up’. Hygiene and social distancing considerations also impacted shopping behaviour, with about 85% of young consumers and 9-% of middle aged consumers in India moving away from their main store. Perhaps most importantly, more customers than ever have experimented with omnichannel shopping – grocery delivery and in-store pick-up, for instance, grew in popularity and are expected to continue as default shopping models even after the pandemic.
The move to ecommerce for both necessities and luxuries has, of course, been exponential. A key trend that manifested, however, was the shift towards D2C buying. Many digital-first brands sprung up during the pandemic, helmed by entrepreneurs working from home and with a strong understanding of the digital mindset of millennials and Gen Zers. These brands offered niche, sustainable and environment friendly products as well as the convenience of digital shopping – a double win for buyers. There was also a shift in preference towards supporting small local sellers who may have been struggling during the lockdown, and who offer niche products at fair prices rather than the highly commercial and homogenised offerings on ecommerce marketplaces All in all, D2C is set to be the next big thing in ecommerce, with an estimated $100 billion opportunity in India by 2025.
What prompted the shift for big brands?
Retail has undergone significant changes well before the pandemic. Big brands are themselves an evolution from small specialty stores, when it was understood that producing multiple items at scale could bring prices down for customers. Ecommerce too is a product of the shift towards an at-home, on-demand model where customers can procure everything at home from appliances to gourmet meals to fitness classes. And when lockdowns began, this became effectively the only model by which consumption could happen.
The long-term shift to digital, however, is because of much more than just lockdown-related compulsion. Today, millennials comprise about 68% of the population – a significant majority. For them, convenience combined with quality is paramount when it comes to shopping. With the plethora of new-age brands available online, big brands risk losing relevance in the millennial’s mind unless they too provide a sleek omnichannel experience. There are also clear benefits to having a D2C online presence, which we discuss below.
Business impact of going online
Done right, going digital can empower brands to take control of customer relationships like never before. Some of the benefits that big brands like Haldiram’s and Whirlpool have enjoyed from the shift to D2C ecommerce include:
- Valuable data insights – The use of a smart D2C ecommerce platform provides access to a vast inflow of previously untapped data. From buying patterns to size preferences, from customer sentiment to factors causing cart abandonment, brands can benefit from powerful insights that enable smarter, faster decisions across the entire value chain.
- Better customer experience – The new stream of data insights and the removal of middlemen enables big brands to respond directly to customer queries, complaints and requests. They can also personalise the shopping experience better, such as by recommending products based on previous buying patterns or offering in-store discounts based on products wishlisted online. Fast and responsive service is key to gaining customer loyalty, particularly in today’s fiercely competitive online space.
- Lower costs overall – With digital platforms, brands need no longer rely on traditional sales channels and brick-and-mortar stores to reach buyers. This is particularly useful for those who have been forced to shut shop during the pandemic. Expanding business to other parts of the country is also cheaper, as brands need no longer set up new shops or make costly agreements with local third-party retailers. They also save on the costs of maintaining a presence on ecommerce marketplaces.
- Increased revenue and profits – By selling directly to customers, brands get extra revenue streams that they can benefit from even when the lockdown ends and in-person shopping returns. Moreover, data insights can enable them to launch new products or tweak the shopping experience in anticipation of consumer demand. Being the first mover brings with it the advantage of being the first to profit as well.
The road ahead
Customers today expect the same premium quality and personalised experience when they shop online as they would in a physical store. To oblige this expectation calls for concentrated effort and a swift strategic pivot to online sales, combined with a commitment to safety, hygiene and quality. Of particular importance is the kind of platform big brands move to when making this shift – given their vast reach and the volume of their operations as compared to small start-up brands, they need a robust platform that can handle large scale data, keep the shopping experience hassle-free and deliver relevant insights to boost brand growth. D2C eCommerce is becoming an increasingly important growth channel for brands across the globe. D2C growth is all about finding several growth opportunities and executing them at scale. Brands that are able to find opportunities and act on them tend to outpace their competitors who are left playing catch up. Shoptimize is enabling brands big and small to make the shift and unlock the power of digital growth through data insights and recommendations.