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The pandemic has defined the new normal not just for consumers but also for brands worldwide. Sales of Consumer Packaged Goods (CPG) have soared especially for Household & Personal Care (HPC) and Food & Beverage (F&B) segments. Consumers are looking for safer ways to get their products through contactless transactions and touchless delivery and brands are adopting new models to reach their customers amidst store closures and logistical challenges. Several major multinational brands have forayed into direct ecommerce model through their own websites and apps. All of them are leveraging platforms like Amazon (including Amazon Fresh), Instacart and Peapod leveraging their well-established delivery network for a wider reach. Some CPG companies have even reached out to the local delivery apps and platforms, from mom-and-pop stores and apartment associations/office all the way to formal delivery options like Dunzo.
Changing consumer behaviour requires CPG companies to be more nimble and relevant for thriving in the customer centric and data focused consumer market. Direct-to-Consumer (D2C) model is fast evolving as the answer to the challenges faced. But D2C means different things to different people from e-commerce to omnichannel to marketplace to even hyperlocal and subscriptions. Is the D2C model really the answer for traditional CPG players to stay competitive? If yes, how does it help to reduce the impact of pandemic? Can D2C model help simplify customer journeys, enhance buying experience and most importantly solve customer concerns? What type of product categories qualifies for the D2C model? Should product design, product launch and consumer experience consider D2C model built-in to the core strategy? Answers to above would help CPG companies do a fit assessment of the D2C model, identify building blocks relevant for their operations and finally decide upon the categories and channels to choose for a successful D2C model. The final decision should touch upon all three core entities of the enterprise – products, consumers and channels and cover the key functions of product development, sales & marketing and logistics & supply chain.
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