Today, customers are responsible for every business. A recent study found that it wouldn't matter to consumers if 74% of the brands they use today disappeared tomorrow. Customer relations are everything.
Direct Payments in FMCG are here!
Direct-to-consumer (D2C) companies have been around for a while, but they popped up overnight. Looking at the e-commerce market more broadly, we see that Amazon offers 'pay directly to fmcg' for over 80 private labels. For sale.
This is important because when companies like Amazon switch to a direct-to-consumer sales strategy, the trend certainly doesn't change quickly. With the dramatic changes in consumer and food demand, DTC is here to stay and opens up numerous opportunities for e-commerce, especially in the FMCG industry.
An essential part of a manufacturer's omnichannel strategy is its online presence. These engagements are used to collect customer data, share product information, promote brand loyalty, evaluate pricing, compare online inventory, and make a variety of other customer decisions.
According to a recent survey by eMarketer, more than 400 direct payment brands are currently active in FMCG (D2C). The report also shows that web traffic to D2C sites has doubled in the past two years.
FMCG brands have a new option!
The Direct-to-Consumer (DTC) model has been around for some time, but it emerged during the Corona crisis and its implications were discussed in the first part of the article. We know how COVID-19 has affected consumer preferences, shopping habits and purchasing decisions. More and more consumers are using the Internet to buy goods in bulk, especially consumer goods, including groceries, groceries and household goods. D2C enables the FMCG industry to benefit from changes in demand.
Some of the best FMCG companies already use a direct-to-consumer business model. In 2019, Nestle introduced KitKat Chocolatory's DTC website, allowing consumers to purchase premium versions of the candy directly through a custom website.
D2C is a valuable model that helps bypass traditional trade and distribution networks as various quarantine zones and COVID-19 restrictions block last-mile deliveries. The pandemic has caused an unexpected disruption to ecosystem supply chains as companies struggle to address labor shortages as migrant workers return home. This includes finding raw materials, production, and labor to deliver the finished product. Brands are implementing new strategies to connect directly with consumers.
Recent direct-to-consumer initiatives include small and established brands like Dunzo, Scootsy, Swiggy, etc., partnering with various delivery channels and food startups and facilitating the process through tie-ups with local welfare associations (RWAs). ITC Ltd. Managing Director B. Sumant said such alliances increase the effectiveness of teamwork. Because in the current historical period, no company can fully satisfy the needs of the country. ITC also sells its products directly through brand websites and portals.
As Dabur points out, some brands are coming up with creative ways to get consumers to buy the products they need. This issue is vital as Dabur is partnering with online delivery services to enable retailers to reach homes directly, according to recent reports.
Food delivery services Swiggy and Zomato have expanded their networks, and the apps now offer a wider range of consumer goods for customers to order. Apart from enabling customers to buy daily essentials from local stores, Swiggy has expanded its store network to 200 cities.
Instead of Swiggy and Dunzo, FMCG companies are now using hyper-local delivery platforms. These hyperlocal platforms help brand-specific stores or distribution centers to process orders directly and deliver products to the customer's doorstep.
Hyperlocal delivery channels help consumer goods manufacturers reach consumers faster and easier while stationary. However, e-commerce experts say single-brand stores in hyperlocal delivery channels need help, as consumers prefer to buy all the gear they need at once rather than sticking to one brand.
The Final Verdict
For FMCG, D2C is undoubtedly the key to solving urgent needs. It is naïve to say that D2C will disappear once COVID-19 is over. This is a wise move for new FMCG brands and DTC startups due to COVID-19. Even if the COVID-19 situation calms down, there may be a slight change in consumer interest in purchasing certain products, but that is because it has a direct impact on consumers buying behavior.
According to forecasts, the D2C trend in e-commerce will continue to drive significant growth in FMCG, even after COVID-19 subsides. On the other hand, it could also mean new digital opportunities for the FMCG industry.
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