D2C Brands Tap Into Growing Purchasing Power In Smaller Cities
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D2C Brands Tap Into Growing Purchasing Power In Smaller Cities

D2C Brands Tap Into Growing Purchasing Power In Smaller Cities

From brick-and-mortar to digital stores, the retail industry has changed over the years and is still evolving. During the pandemic, with half of the retail stores shut, many people believed that even after the end of Covid-19 the retail stores would not have as much value as they held before because people started shopping online.

According to a survey, 60 per cent of consumers are now more likely to shop online than they were before the pandemic.

As online stores became a one-stop shop for all fashion and grocery needs, everything can come to your doorstep and that way a lot more direct-to-customer (D2C) brands emerged, even the traditional retail brands were opening their online stores. But, the country could not have been more wrong about retail stores being vanished as no digital store can offer the touch-and-feel experience, customer service, experiential shopping and the need for impulse purchases that the retail store offers. 

Also, the pandemic not only changed the shopping scenario but encouraged consumers from tier II and tier III cities to shop online. Now, the D2C brands are seeing potential in both retail with tier II and tier III markets.

“The D2C retail brands in India are recognising the immense potential in tier II and tier III cities and are actively expanding their presence in offline retail by opening stores,” said Param Bhargava, Co- Founder, T.A.C- The Ayurveda Co.

He said that by strategically targeting these non-metro locations, D2C retail brands are poised to capitalise on the increasing purchasing power and evolving preferences of customers in smaller cities.

“This expansion not only brings accessibility to quality products for customers in these areas but also presents tremendous growth opportunities for the brands themselves. With a vision to strategically extend their reach and cater to repeated customer demands, the expansion into tier II and III cities represents a crucial milestone in their business journey,” Bhargava added.

After gaining massive success through the online business model, the D2C brands have now forayed into the retail segment which is still a very prominent channel for the brands to connect with their consumers, Vishal Chaturvedi, Vice President, The Body Shop Asia South underlined.

“It is observed that tier II and III towns have contributed significantly towards the overall economic growth of the nation making it an ideal consideration for the business opportunity by multiple brands in India. The increase in disposable income in tier II and tier III towns is another reason that has led to the expansion of D2C brands in tier II and tier III towns in the offline format,” Chaturvedi said. 

Uttam Malani, Executive Director-Centuary Fibre highlights the evolving preferences of the consumers, “The surge in business, especially from rural areas during festive seasons, highlights the growing acceptance, as consumer preferences evolve, comfort and utility have taken center stage, prompting increased awareness of everyday essentials.”

The future of retail is bright for D2C brands that are able to successfully expand into smaller cities. These brands have the potential to reach a large and growing market, and they can capitalise on the opportunities that exist in these markets.

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