The Direct-to-Consumer Profitability Playbook

WHILE THE D2C APPROACH ALLOWS A BETTER AND STRONGER CONNECTION WITH THE AUDIENCE, ONE CANNOT DENY THE INVESTMENT AND OFTEN LONG GESTATION PERIOD REQUIRED TO OFFSET THE RISING CUSTOMER ACQUISITION COSTS CAC)

- BY SWAGAT SARANGI, CO-FOUNDER, SMYTTEN

The direct-to-consumer (D2C) landscape has witnessed significant growth and shifts in the past few years. From a niche segment, it has gradually evolved into a formidable player, re-defining India's retail narrative. The pandemic has also played an important role in shaping this segment as well as further accelerating its growth. Initially, a differentiated offering was sufficient to embark on a D2C journey. It helped the players build a direct connect with the consumers and scale operations. The initial players saw significant success, which encouraged more brands to venture and take the D2C route as they launched innovative offerings. However, as the segment matures, and consumers evolve, concerns with regards to balancing this direct relationship while staying profitable, is forcing brands to face the ultimate conundrum.

A direct-to-consumer route eliminates the middleman and gives brands greater control over their relationship with the consumer as well as the immensely valuable data generated through each relationship.