The Worst Advice for D2C Brands in India

Introduction

Navigating the world of Direct-to-Consumer (D2C) e-commerce in India is both exciting and challenging. With the sector expected to grow at a CAGR of 25% and reach $100 billion by 2025, there's immense potential. However, not all advice is beneficial. 

Here, we dissect some of The Worst Advice D2C Brands in India often receive and provide insights on what you should do instead.

1. "Spend More on Acquiring Customers, Ignore Retention"

The Advice

❌ Focus all your resources on acquiring new customers. Retention can come later ❌

The Reality

Acquiring a new customer can cost five times more than retaining an existing one. A 5% increase in customer retention can boost profits by 25-95%. But hey, who needs profits when you can just set your money on fire? 

‍Cost Comparison

Example: 

Consider Sugar Cosmetics, which focused heavily on customer retention through personalised emails and loyalty programs. As a result, their repeat purchase rate surged to 54%, significantly reducing their overall marketing costs. But if you prefer the thrill of constant new customer hunts, ignore this.

2. "Discounts Are the Only Way to Drive Sales"

The Advice

❌ Constantly offer discounts to attract customers and drive sales ❌

The Reality

Yes, because devaluing your brand and training customers to never pay full price is the ultimate business strategy. While discounts can boost short-term sales, they can erode your brand’s value and condition customers to wait for sales. Instead, value proposition and product differentiation are key.

Discount Impact Analysis

Example: 

D2C brand Licious focused on quality and freshness instead of frequent discounts. This strategy helped them build a loyal customer base and maintain a healthy profit margin.

3. "One Size Fits All Marketing Strategy"

The Advice

❌ Use a single, broad marketing strategy for all customer segments ❌

The Reality

Because everyone loves a generic, one-size-fits-all approach in a country known for its diversity. India’s diverse demographic requires targeted marketing. Personalisation can increase conversion rates by up to 10%.

Marketing ROI

4. "Ignore the Power of Local Influencers"

The Advice

❌ Focus on big influencers with millions of followers ❌

The Reality

Micro and local influencers often have higher engagement rates and more trust with their audience. Collaborating with local influencers can result in better ROI and more authentic connections.

Influencer Engagement Rates

Example: 

Mamaearth collaborated with local influencers in different regions of India, which led to a more authentic reach and higher engagement, contributing to their rapid growth.

5. "Social Media is the Only Channel You Need"

The Advice

❌ Just focus on social media; it’s the only place you need to be ❌

The Reality

Depending entirely on a platform where algorithms change overnight and your reach can be throttled is a foolproof strategy, not. Relying solely on social media is a strategy fraught with risk. Diversifying your channels, including WhatsApp, email marketing, SEO, and content marketing, ensures you aren't at the mercy of social media whims.

Channel Performance Metrics

Example: 

Nykaa utilises a robust multi-channel strategy, incorporating WhatsApp, social media, email newsletters, SEO, and content marketing to ensure consistent customer engagement and growth. But hey, if you want to put all your eggs in one unstable basket, who are we to stop you?

6. "The Customer is Always Right"

The Advice

❌ Always bend over backwards for the customer, even if their demands are unreasonable ❌

The Reality

While customer satisfaction is crucial, it's important to set boundaries. Overextending to appease unreasonable requests can harm your business and morale. Establish clear policies and communicate them effectively to maintain a balance.

Example: 

Urban Ladder implemented a structured customer support policy, resulting in higher satisfaction rates and lower staff turnover, proving that clear boundaries are beneficial.

7. "Focus Only on Performance Marketing"

The Advice

❌ Allocate your entire marketing budget to performance marketing. Branding can wait ❌

The Reality

Branding builds trust and recognition, which are critical for long-term success. A mix of performance and brand marketing ensures sustained growth.

Marketing Budget Allocation

Example: 

boAt, the consumer electronics brand, invested in both performance marketing and brand-building campaigns. Their strong brand presence contributed significantly to their rapid growth and customer loyalty.

8. "Outsource Everything to Cut Costs"

The Advice

❌ Outsource all operations to minimise costs and focus only on core activities ❌

The Reality

While outsourcing can be cost-effective, it can also lead to quality control issues and misaligned priorities. Keeping key operations in-house ensures better control and consistency.

Outsourcing Impact

Example: 

Chumbak initially outsourced their manufacturing but faced quality issues. Bringing production in-house improved product quality and customer satisfaction.

9. "Rapid Expansion is Key to Success"

The Advice

❌ Expand quickly into as many markets as possible to dominate the industry ❌

The Reality

Because nothing could go wrong with spreading yourself too thin, right? Rapid expansion without a solid foundation can lead to operational challenges and resource strain. Sustainable growth with a focus on core markets ensures long-term success.

Expansion Impact

Example: 

Bewakoof expanded cautiously, focusing on building a strong brand and operational efficiency before entering new markets, ensuring stable growth.

10. "Ignore Data, Go with Your Gut"

The Advice

❌ Rely on instinct and experience rather than data analytics ❌

The Reality

Because who needs facts and figures when you have a gut feeling? Data-driven decisions lead to better outcomes. Ignoring data in favor of gut feelings can result in missed opportunities and misguided strategies.

Decision-Making Impact

Example: 

Zivame uses data analytics to understand customer preferences and optimise their product offerings, resulting in higher customer satisfaction and sales. But if you trust your gut over hard data, by all means, dive into the darkness.

11. "Bootstrapping is Bad"

The Advice

❌Avoid bootstrapping and seek venture capital from the get-go❌

The Reality

Because who needs financial discipline and control when you can swim in investor money and lose sight of profitability? 

Bootstrapping encourages efficient use of resources and fosters a strong foundation. Relying too heavily on external funding can lead to reckless spending and diluted ownership.

Funding Impact

Real-Life Example: 

Zoho, a major player in the tech industry, bootstrapped its way to success, maintaining control and profitability. But if you enjoy answering to investors and spending lavishly, avoid bootstrapping at all costs.

12. "Don't Worry About Product Packaging—It's Just a Box"

The Advice
❌ Skimp on packaging costs because customers only care about the product, not the box it comes in. ❌

The Reality
Because first impressions don’t matter at all, right? Wrong. In fact, packaging is often the first physical touchpoint your customer has with your brand, and it can make or break the unboxing experience. Studies show that 72% of consumers say packaging design influences their purchasing decisions. Brands that ignore this miss out on a golden opportunity to enhance brand perception and customer experience.

Packaging ROI Analysis

Example:
Unacademy found that their customer satisfaction and referral rates surged after investing in high-quality, branded packaging. But if you prefer to send your products in brown, crumpled paper bags, go ahead and keep cutting those packaging costs.

13. "Ignore Sustainability—Customers Don’t Really Care"

The Advice
❌ Sustainability is just a trend. Don’t bother. ❌

The Reality
With climate change looming large, 64% of Indian consumers now prefer brands that are environmentally responsible. Ignoring sustainability not only alienates a large customer base but also puts you on the wrong side of history. Brands with strong eco-conscious practices are seeing higher customer loyalty and greater willingness to pay premium prices.

Sustainability's Impact on D2C

Example:
Wakefit, a D2C mattress brand, pivoted toward eco-friendly packaging and materials in 2022. The result? An increase in repeat customers and fewer returns, proving that sustainability is no longer a 'nice-to-have' but a business imperative.

14. "Focus on High Margins, Not Customer Experience"

The Advice
❌ Sacrifice customer experience for high profit margins. ❌

The Reality
Cutting corners to increase margins can backfire spectacularly. Customers are increasingly willing to pay more for a superior experience. 86% of customers in India say they will pay more for a better customer experience, and a bad experience will quickly send them to your competitors.

Customer Experience vs Margins

Example:
LensKart places a strong emphasis on customer experience with their 'Home Try-On' service. This strategy has not only reduced product returns but has also increased their customer satisfaction levels, contributing to their impressive growth. However, if you'd rather scrape by with quick profits and high churn, feel free to ignore this.

15. "Logistics? It’s Just About Delivering Packages"

The Advice
❌ Focus only on the cheapest delivery option. Logistics is just about getting a package from Point A to Point B. ❌

The Reality
Sure, if you don’t mind dealing with disgruntled customers and sky-high return rates. In India, 66% of online shoppers say delivery speed and reliability influence their purchase decisions. Optimising logistics isn’t just about cutting costs; it’s about improving customer satisfaction, reducing returns, and ensuring long-term success.

Logistics Optimization Impact

Example:
BigBasket refined its logistics network to offer same-day and next-day delivery in several cities, significantly improving customer satisfaction and retention. On the flip side, relying on the cheapest couriers could leave you swimming in a sea of complaints and product returns.

16. "Set It and Forget It—Your Website Will Run Itself"

The Advice
❌ Build your website once and forget about it. You don’t need to constantly update or optimise. ❌

The Reality
In the fast-paced world of e-commerce, resting on your laurels is the quickest way to fall behind. User experience, site speed, and mobile optimization are key to keeping customers engaged and converting. 53% of mobile users abandon sites that take longer than 3 seconds to load, and that’s not a metric you want to ignore.

Website Optimization Impact

Example:
Zivame frequently updates its website for speed, UX design, and mobile optimization, leading to a marked increase in conversion rates and average order values. But if you prefer a website that collects dust and visitors who never return, by all means, leave it on autopilot.

17. "Ignore After-Sales Support—The Sale Is Done"

The Advice
❌ Once the customer has made a purchase, your job is done. Ignore after-sales service. ❌

The Reality
Post-delivery is where customer loyalty is truly built or destroyed. 95% of customers in India say that effective after-sales service influences their decision to buy again. Ignoring this aspect not only results in lost customers but also leads to negative reviews and poor word-of-mouth marketing.

After-Sales Support Impact

Example:

boAt, the audio accessories brand, has developed an excellent after-sales support system that includes easy product replacement and extended warranties, driving high repeat purchases and customer loyalty. But if you’re happy with high churn and low loyalty, then by all means, skip the after-sales care.

18. "Cash-On-Delivery is the Only Way to Build Trust"

The Advice
❌ Focus primarily on COD (Cash-on-Delivery); it’s the only way to earn customer trust in India ❌

The Reality
COD might be an appealing option for the risk-averse Indian customer, but relying heavily on it can be a logistical and financial nightmare. COD orders have higher Return-to-Origin (RTO) rates (up to 40% in some regions), leading to major losses in terms of shipping, product damage, and blocked inventory. Additionally, COD slows down cash flow, making it difficult to reinvest in inventory or marketing.

Example:
The D2C brand FirstCry initially offered COD as a key payment option, but after realising it led to higher return rates and operational costs, they shifted towards promoting prepaid options through incentives like extra discounts, which reduced their COD orders from 60% to 30%.

19. "You Don’t Need Product Reviews—Just Focus on Sales"

The Advice
❌ Product reviews are overrated. Just focus on driving sales and forget about what customers are saying ❌

The Reality
Ignoring product reviews is like driving blindfolded. Reviews not only influence purchasing decisions but are also crucial for product improvements and brand trust. According to research, 84% of people trust online reviews as much as a personal recommendation, and reviews can boost conversions by up to 270% for high-priced products. Neglecting this feedback loop leaves you at the mercy of customer churn, lower search rankings, and reduced conversions.

Example:
Wakefit, a leading D2C mattress brand, placed a heavy emphasis on gathering and showcasing reviews from its customers. By integrating reviews into their product pages, Wakefit saw a 150% increase in conversion rates and managed to build a community of advocates who consistently promote their products online.

20. "Returns Are Bad—Make Them Difficult"

The Advice
❌ Complicate your return process to reduce the number of returned products ❌

The Reality
Making returns difficult will not stop customers from returning products—it will stop them from buying in the first place. A seamless return policy can actually increase sales. Research shows that 92% of consumers are more likely to purchase from a brand again if the return process is easy. Offering hassle-free returns doesn’t encourage fraud; instead, it fosters trust and reduces friction in the buying process.

Example:
Zivame implemented a no-questions-asked, easy returns policy, which led to a significant rise in conversions and improved customer loyalty. After launching their “try-at-home” service and simplifying returns, Zivame’s customer satisfaction scores increased by 35%, which in turn boosted their repeat customer rate.

21. "You Don't Need Mobile Optimization—Desktop is Enough"

The Advice
❌ Focus on desktop optimization. Mobile is secondary ❌

The Reality
In India, 75% of e-commerce traffic comes from mobile devices. Ignoring mobile optimization is like shutting off three-quarters of your potential customers. Poor mobile experience leads to cart abandonment, lower search engine rankings, and reduced sales. Google's mobile-first indexing prioritises sites that are optimised for mobile, meaning your website won't even rank well if it isn't optimised.

Example:

D2C brand Fabelio improved its mobile site speed and user experience, which resulted in a 40% drop in bounce rate and a 20% increase in mobile conversions. Their investment in mobile-first design proved to be pivotal in increasing sales and customer satisfaction.

TL;DR: The Worst Advice for D2C Brands in India

Following bad advice in D2C e-commerce can lead to wasted resources, devalued brands, and missed growth opportunities. From over-relying on discounts and big influencers to ignoring customer retention and data-driven decisions, these missteps can harm your business in the long run. 

Success requires a balance between acquisition and retention, personalised marketing, multi-channel strategies, and smart use of data.