Building an Experiential D2C, Here's What Brands Need To Do
There is a lull in between the successive transactions of a D2C brand its customers, how a brand fills that up will be the key differentiator writes Faisal Kawoosa, Founder, Chief Analyst, Techarc
Technology, especially on the digital front has transformed the backend logistics, which is primarily a B2B affair and invisible from the end customers. Emergence of 3PL (third party logistics) and now 4PL (fourth party logistics) are offshoots of this evolution. However, the more exciting and visible transformation propelled by digital innovations is the customer facing part of the value chain.
Online marketplaces have resulted in successful implementation and integration within business delivery, where in some product categories like smartphones and other smart devices, today in India more than half (by volume) of these products are sold through this medium causing a major disruption in the channel or the medium connecting a brand with the end customer.
D2C is a step further which results in the leanest possible chain between a brand and its customers. This flattish structure is not only helping brands to reorient themselves as experiential brands but also minimising the gaps and misunderstandings between the two parties.
In a typical product or service delivery there are partners and agents who finally interact with the end customer and may not essentially create an experience that the brand wants to deliver within. For instance, a brand may design one of the best packaging of a product, but it would not get a complementing shelf experience at the retail store. Having worked in middle east on mystery shopping projects for some of the reputed brands like Zara, Debenhams, Mamas and Papas among others, I have first hand seen the detailing of experience these brands would expect from their own retail stores, which they would get audited through mystery shopping exercise. For instance, in case of Zara there was a defined gap in inches that a mystery shopper was required to observe while checking on items on hangers.
In D2C business delivery model, a brand because of its proximity to the customer and getting insights through an analytics layer hovering over the interactions, a brand is in much more direct control, which helps it to define and implement the experience it wants to leave with a customer while performing a transaction. So, the phase of transaction when the interface between a D2C brand and the customer opens, is very much in control of the brand. This positions a brand very strongly in not just having a quality control of the product or service, but the entire experience leading to a customer delight.
However, this may not be the only factor leading to the elevation of a D2C brand to an experiential D2C brand. It will be equally important for a brand to have an effective strategy in place to keep its customers / audience consistently engaged through ways and means that resonate with the overarching experiential narrative and positioning.
Analysing the pattern of interactions between a D2C brand and its customers (as shown the graph below), there is an interval gap between the successive transactions. This interval, what I call ‘lull interval’ is of varied durations depending on the nature of the product or service which is operating D2C. For instance, in case of furnishing, etc., the interval could range anywhere between 3-10 years. Similarly, for apparels it could be season (6 months to 1 year), cosmetics and grooming (monthly), stationery (annual), so on and so forth. How proactively a D2C brand engages with the customer through right means during this ‘lull interval’ would be the defining moment for the brand.
The effectiveness of handling the ‘lull interval’ will define a lot many things for a D2C brand having a direct impact on its revenues and profitability. For instance, if a D2C brand deals in a product where a typical interval would span 3-5 years, it would have to spend as good as acquiring a new customer than reengaging an existing one, if there is no strategy in place to fill the gap. Similarly, customers would not install apps of such products or may uninstall after some time of transaction. This opens the challenge of brand safety as customers would faintly remember the brand identities and could be spoofed by scamsters.
Compared to this for marketplaces, customers would be more regular in interactions as there would be several reasons to connect due to a variety of products and brands available. Also, a customer would not mind having a marketplace app installed as it would be frequently used.
To create experiential D2C brands, there is a need to have an equally effective strategy for the ‘lull interval’ as the brand would have for the transaction interval. There could be several ways of filling up the gap, primarily around distributing content that perfectly identifies with the D2C brand’s positioning and the tastes of its customers. Others could include organising offline meets which focus on awareness, education as well as fun and celebrations. By having an equal focus on the transaction and lull intervals, a D2C brand will have a sustainable business yielding revenues and profits with an icing of being experiential.
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