Direct-to-consumer (D2C) brands have revolutionised the traditional retail model by selling products directly to customers, enabling them to bypass intermediaries and gain greater control over their brand and customer experience. This business model has also provided D2C brands with an enormous amount of data that they can use to improve their sales and marketing efforts.
In this article, we explore how D2C brands are maximising sales with data-driven insights.
D2C Brands & the Advantage of Data
One of the key advantages of the D2C model is that it allows brands to have complete control over the customer journey, from product development to marketing and sales. This has allowed Indian D2C footwear brands to establish themselves at world standards by focusing on quality, design, and customer service. By eliminating intermediaries, D2C brands can offer products at more competitive prices while maintaining quality. D2C brands collect a vast amount of data about their customers’ preferences, behaviours, and purchase history. This data allows them to personalise their offerings and marketing messages, significantly increasing customer loyalty and sales.
For example, D2C clothing brands can use data to recommend products based on a customer’s past purchases and browsing behaviour. They can also offer personalised sizing and fitting recommendations based on a customer’s body type and measurements.
D2C companies can use the data collected from their customers to make informed business decisions. This includes developing new products and services, refining marketing strategies, and improving overall customer experience. For instance, D2C brands can analyse customer feedback and reviews to identify areas where they can improve their products and services. They can also use data to identify trends and patterns in customer behaviour, which can help identify new opportunities for growth and expansion.
Additionally, D2C brands can use data to optimise their supply chain and inventory management processes. By tracking sales trends and customer demand, they can ensure that they have the right products in stock at the right time, which can improve efficiency and reduce costs. Overall, the ability to collect and analyse data is a significant advantage for D2C brands, as it enables them to make data-driven decisions that can improve their business performance and enhance the customer experience.
Inventory Management & Waste Reduction
Inventory management and waste reduction are essential aspects of any business, including direct-to-consumer (D2C) brands. These brands can leverage data to optimise their inventory management and reduce waste, ultimately enhancing their efficiency and profitability. D2C brands can analyse sales data and customer demand to forecast inventory requirements accurately. This helps in ensuring that they have sufficient stock to meet customer demand without overstocking and wasting resources.
By analysing sales data and customer demand patterns, brands can also identify products that sell better during certain seasons or periods and adjust their inventory levels accordingly.
Furthermore, by tracking slow-moving products, brands can reduce production of such items, which helps in preventing overstocking and avoiding excess inventory. By reducing waste, D2C brands can also save on storage costs and maintain a leaner, more efficient supply chain. Reducing waste is not only beneficial for the environment but also for the brand’s bottom line. By optimising inventory levels D2C brands can avoid discounting excess inventory, and maintain profitability. In conclusion, inventory management and waste reduction are crucial for the success of D2C brands.
Pricing & Promotions
Another way that D2C brands are using data to drive sales is by optimising their pricing and promotions. By analysing customer behaviour and purchase history, brands can identify the products that are most likely to drive sales and adjust their pricing and promotions accordingly. For example, some D2C brands use dynamic pricing algorithms to adjust prices in real-time based on customer demand and competition.
Customer Acquisition and Retention Strategies
D2C brands can leverage data to improve customer acquisition and retention. By analysing customer data such as purchase history, search history, and website activity, brands can segment their audience and deliver personalised messaging to each segment. In addition to personalization, D2C brands can use data to identify the channels and content that resonates most with their target audience.
By analysing engagement rates, follower growth, and click-through rates, brands can determine which social media channels and content are most effective for customer acquisition and retention. Social listening tools can also be used to monitor online conversations and identify trends and opportunities to engage with their audience.
Another strategy that D2C brands can use to improve customer acquisition and retention is influencer marketing. By tracking metrics such as engagement rates, reach, and conversion rates, brands can determine the ROI of each influencer campaign and identify which influencers are most effective for customer acquisition and retention.
Finally, D2C brands can use customer data analysis to identify customer behaviour patterns and preferences. By analysing purchase history, customer feedback, and website activity, brands can determine which products and messaging resonate most with their customers. This can inform marketing strategies and product development, which in turn can help to improve customer acquisition and retention.
Expanding Reach & Disrupting the Market
D2C brands in India are not limited by geographical boundaries and can expand their reach beyond traditional brick-andmortar stores. With the rise of e-commerce platforms and social media, D2C footwear brands in India can reach a wider audience and build brand awareness through targeted advertising and influencer marketing.
The Indian footwear industry has traditionally been dominated by established brands, but the rise of D2C brands has disrupted the market and provided consumers with more options. This has also led to increased competition, pushing brands to innovate and offer better products and services to stand out in the crowded market. Overall, this data-driven approach to inventory management can help brands optimise their product offerings and maximise their sales potential.
Monrow: A Case Study
Monrow is a rising star in the women’s footwear industry, known for its stylish and comfortable vegan shoes. The brand has quickly gained a following, thanks to its unique USP and data-driven strategies that have led to the perfect Product-Market Fit. With an impressive 10x growth since its launch in 2019, Monrow has achieved a turnover of over Rs 35 crore, cementing its place as one of the most successful new-age brands in the space.
Using Google Analytics to track the number of purchases per view at the product level is a useful metric for identifying which products are generating the most interest and driving sales. Let’s say that Monrow has two products: Product A and Product B. To make inventory decisions, Monrow considers both the number of units sold and the number of impressions (views) each product receives.
Product A receives 1000 impressions and sells 10 units, resulting in a purchase rate per view of 1%. This indicates that Product A is performing well and generating a high level of customer interest. Monrow might decide to increase their inventory levels for this product to meet demand and ensure continued success.
Product B receives 100 impressions and sells 5 units, resulting in a purchase rate per view of 5%. This indicates that Product B is over-performing relative to its number of impressions, generating a high level of sales. Monrow might decide to reduce their inventory levels for this product to avoid excess stock and focus on promoting other products with a higher level of customer interest.
By analyzing the number of impressions and purchases per view for each product, the brand gains insights into how well each product is performing and can make informed inventory decisions to maximize sales potential.
One of the key factors contributing to our success is its emphasis on brand loyalty. Nearly 30% of the company’s direct-toconsumer revenue over the last six months has come from repeat customers, who are drawn to the brand’s fashionable yet comfortable shoes. This has resulted in higher average order values (AOVs).
In addition to its online presence, we have also expanded its reach through a tier 2 strategy, opening brick-and-mortar stores in cities such as Hyderabad, Delhi, Bhubaneshwar, Lucknow, and Jaipur. This Omnichannel approach has proven successful, with the brand’s offline stores performing exceptionally well and creating a compounding effect on its online sales.