Your D2C Brand Performance in FY2023: Insights & Market Trends

It wasn't the year for few, but was it for you?

Would you like to know how your brand has performed FY 2023?

Of course you would. But you also need to know how the rest of the market did.
Because..

1. You might be doing something right that they are not. You need to capitalise more on that advantage.
2. You need to know who your closest competitors are, just so you are not competing with someone technically out of your league. At least currently.
3. You can straight-up copy & paste whatever you can from what you learn, and add-on something extra. There’s nothing wrong with it, it’s a competitive world.

Understanding Market Dynamics:

In 2023, the D2C market in India has seen significant growth, influenced by increasing internet penetration, a shift in consumer preferences towards personalised and niche products, and advancements in digital payment infrastructures. Brands that have excelled often exhibit strong characteristics such as agile supply chains, robust digital marketing strategies, and exceptional customer service.

1. Digital Presence and Engagement:

Top-performing D2C brands in 2023 invested heavily in optimising their digital presence. This includes a user-friendly website interface, seamless checkout processes, and highly targeted social media campaigns.

Tools like AI-driven analytics for understanding consumer behaviour and personalised marketing have been crucial. Your brand’s performance in this area can be benchmarked against peers by analysing metrics such as website traffic, conversion rates, and social media engagement rates.

2. Customer Experience and Satisfaction:

Customer experience is a make-or-break factor in the D2C sector. Brands leading the pack have leveraged technology to enhance customer interactions, from AR-powered try-ons to AI chatbots providing round-the-clock customer service. Evaluate your customer service metrics, return policies, and overall customer satisfaction scores to see how your brand stacks up.

3. Product Innovation:

Successful D2C brands are often those that rapidly respond to market trends and consumer needs with new and innovative products. Whether it’s sustainable goods or customizable options, being at the forefront of product innovation is a clear market differentiator. Review your product development cycle and launch frequency compared to your competitors.

4. Logistics and Supply Chain Efficiency:

With the rise of same-day delivery expectations, operational agility has become a competitive edge. Brands that have streamlined logistics and supply chain processes often enjoy higher customer loyalty. Assess your supply chain resilience, delivery times, and cost efficiency.

5. Sustainability Practices:

An increasing number of Indian consumers prefer brands with strong sustainability credentials. This includes eco-friendly packaging, ethical sourcing, and carbon footprint reduction initiatives. How does your sustainability commitment compare to others in the sector?

TOP 5 Performance Data That D2C Brands Need

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We analysed 1,64,26,547 orders and showed D2C brands the importance of performance data and optimisation.

1. Location Data

- Understanding Location based customer satisfaction

- Understanding Location based fulfilment rates

- Understanding Location based ROI (return on investment)

- Understanding Location based returns & RTO data

Understanding Location based data helps brands tailor their marketing strategies, optimise inventory distribution, and plan logistic operations.

For instance, a brand might discover that certain products perform exceptionally well in metro cities but not in tier-2 cities, prompting tailored promotional campaigns or specialised product launches.

Furthermore, this data can assist in identifying potential new markets with unmet demand.

This, combined with the location info of competitors helps to optimise and compete in areas where they lack.

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Data Collected: Geographic distribution of website traffic, conversion rates by region, popular shipping destinations.

Example:

Insights: Metro cities show higher conversion rates, indicating stronger purchasing power and market demand. Tier-2 cities have significant traffic but lower conversion rates, suggesting potential for targeted marketing campaigns or localised product offerings.

2. Checkout Data

Checkout data encompasses information gathered at the point of transaction, which includes 

- Understanding Payment Mode success rates

- Evaluating cross-selling & upselling success rates

- Monitoring device preferences

- Customer buying behaviour

- Cart size

- Time spent in the checkout process etc. 

This data is invaluable for optimising the checkout experience to reduce friction and enhance conversion rates. Analysing trends over time can reveal insights into how changes in the checkout process affect customer behaviour.

For example, the introduction of a faster, more secure payment option might correlate with a spike in completed transactions - like our 1Checkout (wink wink)

Data Collected: Cart abandonment rate, preferred payment methods, average order value.

Example:

Insights: Despite higher abandonment rates, Cash on Delivery remains popular, indicating a need for reassurance or incentives to complete purchases. Credit card users tend to make larger purchases, suggesting potential for targeted promotions or loyalty programs.

3. RTO Data

In the Indian ecommerce landscape, Return to Origin (RTO) — where undelivered goods are returned to the seller — is a significant challenge, impacting profitability. High RTO rates can be due to various factors, including issues with address veracity, customer availability, or payment failures.

Monitoring RTO data helps brands identify patterns and problem areas, whether they're specific to certain locations or product categories, allowing for targeted interventions such as improving address verification processes or offering more reliable payment methods.

Also, limit RTO risk with historic customer data from 500+ brands

- Disable COD for the risky consumers

- Show selective coupons and offers 

- Spend less on marketing for regions with high RTO %

And more 📈

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Data Collected: Reasons for return, return rates by product category, geographical distribution of returns.

Example:

Insights: Apparel and electronics have higher return rates due to size mismatch and damage, respectively. Returns are concentrated in major urban centres, highlighting the need for improved delivery accuracy and packaging.

4. Return Management and NDR Data

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There is an inevitable increase in the number of returns during the holiday season sales, yes.

But brands can adjust a couple things in real-time to maximise satisfaction when it comes to return experience.

- Automate 100% of the refund & exchange process, showing instant action to all customers

- Keep tabs on SLA breaches etc. from the logistic partners’ side

- Have access to real time data to communicate clearly. Brand ↔ Customer ↔ Logistics.

(PS. In 2022, we were able to help avoid 9,35,053 NDRs and helped over 200 brands automate 100% of Return Management.)

Data Collected: NDR reasons, frequency of returns, actions taken to reduce returns.

Example:

Insights: High NDR rates indicate operational inefficiencies. Implementing proactive measures like improved communication and flexible delivery options can reduce NDR occurrences and associated costs.

This data provides insights into the reasons for returns or delivery failures, helping brands to improve product quality, packaging, or courier partnerships. For example, consistent issues noted in NDRs like 'customer not available' could indicate the need for better delivery scheduling options.

Enhancing these aspects can lead to reduced returns, improved customer satisfaction, and lower operational costs.

5. Abandoned Cart Data

Cart abandonment rate in India has steadily increased from 69.57% in 2016 to 81.52% in 2022 (oof!)

Abandoned cart data is a goldmine for understanding consumer hesitation and barriers in the purchase process. It involves analysing items that customers added to their carts but did not purchase. 

Making it crucial to..

- Understand the stage of drop-off and then the cause

- Optimise and monitor with AB testing & Ecommerce Dashboard

FYI, we converted a total of 6,20,127 abandoned carts in 2022

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Data Collected: Reasons for abandonment, cart value distribution, effectiveness of recovery strategies.

Example:

Insights: Addressing shipping costs and price sensitivity through targeted discounts or free shipping promotions can significantly reduce abandonment rates. Simplifying the checkout process enhances the likelihood of cart recovery efforts succeeding.

This data helps identify trends or commonalities among abandoned products, such as price sensitivity, shipping costs, or a complex checkout process. Addressing these issues can significantly increase conversion rates. For instance, offering timed discounts or free shipping when a high-intent customer abandons a cart could incentivize them to complete the purchase.

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Conclusion:

Evaluating your performance against the market gives you strategic insights, allowing you to:

1. Enhance What Works: Identify your unique strengths and push these advantages further to distinguish your brand from competitors.
2. Understand Your Competition: Clearly define who your direct competitors are, ensuring you’re not aiming too high or low in your competitive strategies.
3. Innovate from Observations: Adopt successful strategies from others while adding your unique value. In a competitive market, adapting and enhancing proven strategies is necessary.

For D2C brands in India, leveraging these five types of performance data can lead to more informed strategic decisions, enhanced customer experiences, and improved operational efficiencies.

By understanding and acting on location trends, checkout behaviours, RTO patterns, return management intricacies, and abandoned cart insights, brands can not only meet but exceed customer expectations in a highly competitive market.