The omnichannel path: why are D2C brands making the move?

Picture this: in the vast landscape of retail, Direct-to-Consumer (D2C) brands emerge as pioneers, faced with critical decisions like choosing between debt & equity financing, securing business loan for startups, and optimising ecommerce inventory financing for a seamless supply chain. Yet, in this era of digital dynamism, merely testing the waters of online approaches won't suffice.  Diving headfirst into the omnichannel sea, navigating the waves of consumer preference and technological tides becomes imperative. A comprehensive report by Accel, Fireside Ventures and Redseer Strategy Consultants delves deep into Decoding Omnichannel Strategy for D2C Brands, shedding light on this essential journey.

Kanwaljit Singh, Founder of Fireside Ventures shared insights in an interview with Moneycontrol, emphasising that the current juncture marks a tipping point for omnichannel adaptation. For online-centric brands confident in their product-market fit and consumer understanding, he suggests the time is ripe to expand into the offline realm, and create a large offline footprint.This sentiment resonates deeply with the essence of the report, which highlights the crucial need to be present wherever consumers are. Indeed, we've witnessed the rise of numerous new-age brands spanning various consumer categories in the past decade. Yet, in today's landscape, a common thread among these brands is that omnichannel shopping experiences aren't just a luxury – they're a fundamental expectation for consumers.

Expanding on this theme, Priyanka Salot, co-founder of The Sleep Company aptly observes “After a while of being a fully online operating brand, we started getting calls from customers asking where they can try out the products. For digital-first companies looking to go omnichannel, the only signal needed is listening to customers. Because after a point, they won’t stop telling you they want a store!” 

Here’s a peek into the strategies of consumer brands across diverse categories that have effectively managed their working capital for e-commerce and physical stores well to embrace omnichannel approaches in order to cater to evolving consumer behaviour and achieve remarkable scale.

Without a doubt, disregarding the influence of either online or offline channels in the retail sphere would be a significant oversight. While online brands excel in providing swift consumer access, facilitating rapid feedback loops, requiring limited capital expenditure, and generating demand quickly, offline expansion offers the potential for scalability, addressing consumer needs, driving conversions, and reinforcing brand integrity. 

As per the report, brands like WOW Skincare, AgroStar, and HomeLane have reaped substantial benefits from their offline presence. It not only fosters credibility by allowing consumers to physically interact with products but also ensures a seamless purchasing and return experience. Moreover, an offline presence fosters brand salience, particularly in emotionally-driven purchases that require building trust, and building a true omnichannel brand requires offline and online capabilities to come together.

Jewellery brands like Bluestone are innovating with multiple mix-and-match models to enhance the customer experience, recognizing the importance of physical interaction in the purchase journey. They have enabled seamless purchase of online cart to offline checkout at stores, which aids them in planning inventory and forecasting demand basis online customer selection and cart addition. 

Having explored the significance of omnichannel strategies, let's now delve into the crucial parameters to be considered for crafting an effective omnichannel approach.

Here's how founders can equip themselves to navigate the various facets of omnichannel integration:

1. Assessing the right time to venture offline depends on understanding the consumer base being cultivated. Utilising insights on awareness index and brand salience aids in selecting the most suitable offline channels to effectively unlock revenue potential.
2. Initiating an offline presence involves running pilot programs to refine strategies and then gradually scale them.
3. Implementing omnichannel marketing strategies is paramount to driving brand discovery and facilitating conversions across multiple channels. Methods such as Performance Marketing, Affiliate Marketing, Social Media & Influencer Marketing, Customer Retention Marketing, Organic & SEO serve as effective avenues for driving foot traffic and enhancing conversion rates.

Moreover, the report outlines certain in-store marketing methods to boost product discovery and drive sales, along with essential factors to ponder before launching your brand's exclusive outlets.

Lastly, while speaking about the report with Moneycontrol for this omnichannel approach, Prashanth Prakash, Partner at Accel, weighed in on the notion of a funding spring following a prolonged winter. He emphasised that while securing debt funding is becoming increasingly challenging, deserving companies still have opportunities. However, debt financing demands meticulous preparation to align strategies with investors' expectations. Despite the hurdles, Prakash remains optimistic, highlighting the abundance of investors eager to provide debt capital to support ventures that demonstrate potential and promise. Today, various alternative funding options like Klub's Revenue Based Financing are also available to support and celebrate the growth of local businesses.

As their growth partners, Klub too has witnessed the meteoric rise of brands like BeYoung, BerryLush, BlueSmart, and Soch, their ascent fueled by their expansion into the offline domain. If the prospect of unlocking similar potential intrigues you, join the Klub today.