D2C trends that will shape the industry in 2022
Mangesh Panditrao, Co-Founder & CEO, Shoptimize
The year 2021 saw a lot of technological adoption and innovation. It has accelerated the shift to a more digital world and induced long-term changes in consumer purchasing habits. From the business standpoint, brands across verticals have undergone substantial changes due to the pandemic crisis, which forced them to reassess their strategy and realign their operations. One of the most significant shifts is the shift from offline to online channels and the emergence of the D2C market to meet the needs of new generation customers.
According to a report by Avendus Capital, India’s D2C landscape presently has over 800 D2C brands and is on track to be a $100 billion market by 2025. So, let’s look at the D2C trends to keep an eye on in 2022.
New D2C brands will continue to mushroom
The new-age customers are looking for companies that offer one-of-a-kind and personalized products. As a result of this shift in customer tastes, a market for D2C brands has gained traction, bridging the gap between vendors and consumers given the flexibility, convenience, and seamlessness it offers.
Several brands have jumped on the D2C bandwagon to accelerate growth and improve customer reach acquisition, retention, and happiness. As a result of these ever-evolving consumer expectations, new D2C brands will continue to mushroom in 2022.
Investments from venture capitalists will significantly increase
Thanks to the availability of vaccines, India is far more equipped to deal with lockdowns now than it was when the pandemic initially struck. Businesses will not stop, and most certainly, eCommerce will not come to a halt, given the boom it’s witnessing. According to the Economic Times, VC companies backed around 146 D2C brands between January 2020 and August 2021, investing over USD 500 million. The dip which the supply chain and related businesses experienced in 2020 & 2021 will not be the case in 2022. Investments from venture capitalists will skyrocket, and early-stage VCs will start seeing exits in 2022, helping the D2C brands to reach new heights.
More D2C brands to go public in 2022
Despite the COVID-19 outbreak, consumers’ attitudes toward online shopping will remain positive. Following Nykaa’s success, other D2C businesses are likely to consider going public if they reach a certain level of growth and profits. Thus, India will witness a substantial amount of private investment in the future, which means that more IPOs are anticipated to occur in 2022.
Fintech will aid the growth
Consumers’ spending pattern has shifted tremendously, leading to the increased adoption of the D2C model. However, the most significant component in D2C’s success is digital payments. Today, many consumers are opting for ‘Buy Now Pay Later’ or ‘Zero Cost EMI’ options, especially for high-value items. The concept of digital payments is moving us toward a cashless world that will last long after the pandemic is over.
So, to sustain in today’s extremely competitive industry, any D2C brand must look for innovation, convenience, and faster payment methods. Many Fintech brands are partnering with online retailers, making it easier for D2C businesses to offer a variety of payment methods. Thus, with fintech companies enabling faster and convenient payment, the online shopping experience will become smoother and prove to be a game-changer for D2C brands in 2022.
Technology (data-driven decision making) will help in scaling
In the face of increasing competition in the D2C market, data-driven decision-making is essential to D2C success. Irrespective of the organization’s size, technology plays a crucial role in scaling business operations, ensuring better customer experience, and building brand loyalty. Data and analytics enable brands to capture their shoppers’ preferences based on factors like location, demographics, and online behaviour. It allows the brand to provide more personalized recommendations, which leads to higher conversion rates.
So, with growing popularity, D2C brands must focus on scaling their technology. Brands must invest and allocate budgets in technology to meet the growing demand. Technology will also help reduce costs and achieve high profitability with improved return on investment.
Bottom Line
D2C eCommerce is quickly becoming one of the most popular ways for businesses to expand globally. And it will continue to grow and evolve in 2022. As a result, brands with the right tools, knowledge, and procedures can stay competitive in an ever-changing marketing landscape.
