Representative picture

There’s a lot of press and buzz around how D2C brands are growing and unlocking new heights with their digital-first toolbox, innovative marketing, end-to-end manufacturing, and ability to meet customer needs. new-age consumers looking for personalized niches and products.

With Covid, the growth in online spending has been a big boost for D2C brands. In fact, online spending is expected to reach $200 billion from $39 billion in the next 5 years in India. D2C brands are expected to disrupt the retail segment in India in the coming years and are expected to become a $100 billion market by 2025.

Is all this buzz real? Are D2C brands able to gain consumer trust better than traditional brands? What is the formula, if any, of this dramatic attraction? We decided to study consumer perceptions by taking 2 examples of categories with a lot of play by D2C brands, namely skincare products and packaged foods. We conducted a survey of N=600 online for each of the 2 categories in the top 10 metropolitan and mini-metropolitan cities with Crownit’s online panel. This group of consumers represents the highest socio-economic group (NCCSA), regularly buys skin care products and food products online and can be considered the main target of all D2C brands before they extend deeper.

Are D2C brands capable of gaining consumer trust?
We’ve found that some D2C brands have indeed made big inroads in a short time, but legacy brands have a strong hold, even among this primarily online audience.

There are huge success stories like Mamaearth, Wow who have managed to break into the big boy club with longtime players like Dove, Nivea, Himalaya, Lakme, Pond’s in the skincare category, even if there is a long tail of D2C brands that land it in this consumer’s top 3 list.

Packaged food, on the other hand, seems more difficult to break into with a digital-first presence that D2C brands have mastered, as traditional channels of purchase and influence still seem to have a greater hold. Love brands like Maggie, Lays, Haldiram continue to dominate the category.

D2C brands, including even popular ones like iD food, Soulfull, and The Whole Truth are part of the long tail. To be fair, food has a larger repertoire with many sub-categories, but the main difference seems to be the basis of rating factors and sources of information that build trust.

By exploring the trust factors for each of these categories, we found that new-age brands have an advantage on certain key factors, especially for skincare products.

In addition to being good for the skin (largely decoded as natural and safe), D2C brands are well placed to tell an engaging story about the 3 key aspects of personalization, consumer reviews and supporting a clear cause – key factors that build trust. Brands like Mamaearth and Wow have additionally played well on the first and most important natural or nature-derived lever and thus gained massive consumer trust.

Are D2C brands capable of gaining consumer trust?
In packaged foods, on the other hand, taste experience and brand popularity and brand buzz are themselves trust factors. Ingredient information and process transparency, where many D2C brands play, has a much lower impact.

Are D2C brands capable of gaining consumer trust?
When it comes to ways to judge quality, both legacy and D2C brands have the opportunity to tell a compelling story about the quality of the ingredients and the assurance of naturalness and freedom from harmful ingredients is considered important for skin care and packaged food products. . The actual experience of the product (feel on the skin; tastes fresh, good) is an equally important way to determine quality.

Are D2C brands capable of gaining consumer trust?Are D2C brands capable of gaining consumer trust?
In both categories, consumers found higher value if the product was perceived to be of good quality at affordable prices, was a popular brand. However, premium quality worth paying more for was mentioned more for skin care products, while discounts and offers had higher mentions for packaged food.

Cheaper or lower prices were generally not a key indicator of good value for money and in fact a brand offering a relevant range of products or variety of products offered good value for money in the case packaged food products.

We also looked at place of purchase and sources of influence for both categories, as well as information need and reliance on information on brand websites and reviews in marketplaces like Amazon. . Influencers and bloggers have also played a much bigger role in the case of skincare brands. This is one of the main reasons for the success of D2C brands playing such a role in the skincare products space, as they can engage almost personally and connect directly with consumers.

It is possible to share much more detailed information, including the suitability of skin types, the list of ingredients, etc. In many cases, founders personally engage with consumers or are highly visible on social media as key brand ambassadors.

In summary, D2C brands have a distinct advantage in quickly establishing brand trust for premium and slightly higher engagement categories where consumers seek information and among young urban consumers who are engaged on social platforms.

Mere presence on popular marketplaces like Amazons seems to give instant credibility to brands that have required consistent advertising over the years to build legacy brands. Given their anti-legacy DNA, there is indeed greater consumer appeal when all parts of the marketing-mix come together. The perception of high quality at affordable prices is key to winning.

However, when it comes to lower involvement, low-cost purchases, and categories such as packaged food where consumer purchases are impulsive or driven by habit, it is not as easy to establish trust in the brand. Additionally, D2C brands may generate some excitement online among an elite audience, but such brands would struggle to gain higher market share or volume unless they are well-distributed across retail channels. traditional detail.

– DISCLAIMER: The opinions expressed are those of the author alone and ETBrandEquity.com does not necessarily endorse them. ETBrandEquity.com will not be responsible for any damage caused to any person/organization directly or indirectly.

Previous

Dwight Capital & Dwight Mortgage Trust fund over $556 million in May 2022

Next

Can D2C Brands Gain Consumer Trust?, Marketing & Advertising News, ET BrandEquity

Check Also