The Digital-First Revolution
In India’s current business climate, ‘digital-first brands’ seem to be the chant of the entire nation, and considering venture capitalists have invested nearly half a billion dollars in them in the past two years, it’s worthwhile to look beyond the ‘buzzword’ to truly understand what digital-first brands are, what makes them click and exploring if they’re here to stay.
Breaking down the buzzword:
In the simplest terms, digital-first brands are those where every customer touchpoint from marketing to the storefront to purchase is completely digital. The odds are, that you’ve seen, interacted or even purchased from one of these brands in the past few weeks. These consumer brands – spanning consumer electronics, personal care, FMCG and F&B sectors – have become powerhouses that should definitely be on your radar. They’re not just a ‘big deal’, they’re gunning for the throne, taking on the biggest consumer brands in the world, chipping away at their market share. The likes of BoAt, Lifelong, MamaEarth & WoW Skin Sciences and similar brands are hitting a 100-crore revenue run rate in under 3 years!
What’s the magic formula?
Brand-building is key: Your brand is your identity and for a digital-first brand, it is a badge of its legitimacy. Getting people familiar with your brand is crucial to build trust in the long-term, especially for a country like India with a substantial consumer base still getting comfortable with digital brands.
Content-marketing is your friend: Digital-first brands are known for leveraging content marketing to build their audience. If your brand identity is the foundation, then your content is what will take it to the next level. Identify your niche and give your audience the content that works for them (even if it means taking a few risks and pushing the boundaries a bit). In a world, where consumers are looking for longer term engagements with a brand that go beyond the transactional, this is can be your differentiator.
Experience is Everything: Much like your branding, every consumer touchpoint is an opportunity to make an impression. And your UX, UI and Packaging are that top of that list. Your website, app or store is the alternative you offer to the physical retail experience, so delivering excellence on these fronts is paramount. It’s important to create an experience that gives as much information relevant information as possible in a format that is easiest to consume. Your packaging on the other hand, is the traditionally, the first real physical contact a consumer has with your product and therefore it can make or break the consumer’s perception about you.
Customer Service: In a country like India, where the physical retail experience is rooted deep in who we are, customer service is arguably the most important thing. It’s important to know that you are up against negative perception (at least in the large chunk of the population) where the fear of scams or being cheated, is very real. Be easy to reach especially when it comes to customer grievances.
Embrace the biggest players on e-Commerce: A digital-first brand’s storefront has the herculean task of being a substitute to the traditional, physical shopping experience. Digital brands are pushing the envelope on making robust and dynamic storefronts that come as close as possible to the real thing. Additionally, e-Commerce powerhouses like Amazon and BigBasket are empowering the newer, digital-first brands through a series of preferential activities that bring in a new wave of loyal customers to their platforms and create a mutually beneficial partnership.
Leverage Influencers: With great social influence, comes great responsibility. Digital-first brands are famously (and infamously in some cases) known for leveraging influencers to gain traction online. If done well, a key opinion leader program and long-term, always-on influencer strategy can single-handedly be the key to the success of your brand. But if done poorly or disingenuously, it can be the downfall of it.
Leveraging investor interest: Digital-first brands are relatively low investment and show rapid growth becoming the ideal investment for a quick 24-36-month turnaround. The sudden spike in the prevalence of digital consumer brand-focused funds and the entry of big-ticket investors into the space are indicating an impending gold rush. This is not just limited to VCs and angel investors however, traditional FMCG brands have jumped on the band wagon as well. A great example of this being the success story of Beardo, a leading men’s grooming brand, whose meteoric rise, attracted Marico – one of the market leaders in the FMCG space – to initially purchase a majority stake in the company (47%) and eventually a complete buy-out.
Think Global: Expansion is the name of the game. Arguably one of the biggest advantages of digital-first brands is its fluidity. These brands are easy to adapt and easy to expand. Not being bound by geography and having the freedom to skip the expensive and time-consuming process of setting up brick and mortar stores, paired with the relatively stable overhead costs, makes international expansion for digital-first brands a breeze.
The verdict?
What started off as an outcome of the digitization of India has now become the driving force behind it. The future for digital-first brands seem bright especially with investor interest rapidly growing. However, these entities will have to morph and adapt with the passage of time, especially for a country like India where the senses play a critical part of the consumer experience. Many such brands are exploring new possibilities of how to give their customers the best experience trying out hybrid retail models that cater specifically to the needs of a country like India. However, these are the early stages of a journey that could potentially transform the consumer experience, perception of digital brands and disrupt the consumer goods market as a whole and the future looks full of opportunities.
About the author:
Atul Hegde, Co-founder, Rainmaker Ventures and Suraj Nedungadi, Sr.Manager – Corporate Strategy & Planning, YAAP