Winning in D2C: Drivers of Trust

Are D2C brands really preferred over legacy brands? What are drivers of consumer trust, quality, and value for money? What are the levers that D2C brands are pulling effectively? Are there any common drivers or is each category a game to be played by its own rules?

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We studied consumer perceptions in 2 product categories with a large D2C play i.e. Skincare & Packaged Food through a survey of N=600 across digital savvy consumers in top 10 metros, who buy these products online.

Size & Stature of D2C Skin care > Packaged Food brands 

Top 10 Most Trusted Brands

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Skin Care

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Packaged Foods 

We found that some D2C brands have indeed made significant in-roads in a short period, however the legacy brands have a strong hold even amongst this primarily online audience. There are massive success stories like Mamaearth, Wow who have managed to break into the big boys club along with long term players like Dove, Nivea, Himalaya, Lakme, even as there is a long tail of D2C brands which do make it to the list of top 3 favourite brands for this consumer.

Packaged food on the other hand seems more difficult to crack with a digital-first presence as traditional channels of purchase and influence still seem to have a greater hold.  D2C brands, including even the most popular ones like iD foods, Soulfull and The Whole Truth are part of the long tail.

What leads to high success in D2C?

As we explored the drivers of trust for each of these categories, we found that new-age brands have an advantage on some key drivers. D2C brands are well placed to tell an engaging story across 3 key drivers of trust: safe for my skin; personalization (suitable to my skin type), strong consumer reviews and brands. They also supported a cause that mattered and helped build a brand I relate to. Brands like Mamaearth and Wow have further played well to being nature sourced as and as a result garnered massive consumer trust.

Further, premium quality which is worth paying more for had a higher mention in case of skin care products while discounts and offers had higher mentions for packaged food.  Cheaper or low prices were typically not a key indicator of good value for money in either category

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Taste & Freshness

Eating Salad
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Popularity

 Ingredients, Process Info 

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20%

Enjoying Pizza

4%

Word Of Mouth

36%

Packaged foods

22%

Skin Care

Good for my skin

55%

For my skin type 

18%

15%

Freckled Skin
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Planet Made of Plastic

10%

Reviews & Info

Supports a cause

Mind Relaxation

Drivers Of Trust

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Further, premium quality which is worth paying more for had a higher mention in case of skin care products while discounts and offers had higher mentions for packaged food. Further, the need for information and trusted sources were online for skin care brands. This is one of the key reasons for success of D2C brands. It’s possible to share much more detailed information including suitability of skin types, list of ingredients etc. In many cases, the founders personally engage with consumers or are very visible on social media as key brand ambassadors.

.Potential roadblocks to a D2C strategy?

In packaged food, on the other hand, taste (actual experience of the product) and popularity of brand are key trust drivers. Large scale sampling and brand-building hence becomes key. D2c brands do a better job of providing information on ingredients and some level of process transparency but these only their own, don’t have the same magnitude of impact.

A brand offering a relevant range of products or product variety was another important driver of “value” for the packaged food category and this implies a larger and newer SKUs being available.

In impulse categories, where the consumers prioritized easy access across channels legacy brands have a stronghold. Further, advertising works as a good enough source of information as the consumer is not doing a detailed online search on ingredients and process as in higher involvement category like skin care or electronics.

Winning in D2C

D2C brands have distinct advantage in quickly building brand trust for premium and slightly higher involvement categories where consumers search for information online. Just presence on popular marketplaces like Amazons provides credibility. However, when it comes to impulse, low-ticket purchases, brands must invest in brand-building and product trial to gain consumer attention.