India's Direct-to-Consumer (D2C) market is undergoing a significant transformation, with brands that initially thrived online now making their way onto the shelves of major retail chains. This move from "clicks to bricks" signifies a strategic shift towards omnichannel distribution to reach a wider customer base and build brand trust.

The D2C Boom and the Need for Offline Presence

Fueled by increasing internet penetration and a digitally empowered middle class, the D2C market in India has experienced explosive growth. As of 2024, India is home to over 800 D2C brands, collectively accounting for a market size exceeding $80 billion. By bypassing traditional distribution networks, D2C brands offer personalized and direct engagement with customers. The Indian D2C market is projected to reach $100 billion by 2030. While online platforms have been instrumental in their initial success, D2C brands are recognizing the importance of an offline presence for sustained growth. E-commerce commands only about 10% of the overall retail landscape in India.

Why Offline Expansion?

Several factors are driving D2C brands to embrace offline retail:

• Access and Experience: Physical stores allow customers to touch and experience products before making a purchase, building trust and comfort, especially in categories like apparel, cosmetics, and food.
• Mainstream Adoption: While digital-native consumers were early adopters of D2C brands, offline retail is crucial for appealing to mainstream audiences.
• Building Trust: Physical stores help in building trust, especially for everyday products like oral care or feminine hygiene.
• Increased Sales and Brand Visibility: Offline channels provide an additional avenue for sales and enhance brand visibility, reaching customers who may not be active online shoppers.

Strategies for Offline Expansion

D2C brands are employing various strategies to establish their offline presence:

• Partnerships with Retail Chains: Collaborating with established retail chains like DMart, More Retail, Nature's Basket, Reliance Retail and others provides access to existing infrastructure and customer base. For example, WickedGud has successfully established its presence in over 200 Reliance Retail stores.
• Establishing Flagship Stores: Some brands are opening their own flagship stores in metro cities to enhance brand credibility and offer a curated product assortment tailored to local preferences.
• Omnichannel Approach: Integrating online and offline channels to provide a seamless customer experience is becoming increasingly important. This includes offering options like buy-online-pickup-in-store and in-store returns for online purchases.

D2C Brands Winning Shelf Space

Big Indian retailers are now giving shelf space to D2C brands that used to be online-only. Avenue Supermarts Ltd, which runs DMart, places new-age brands on the top shelves across categories. DMart's "Tuesday walk-in" lets D2C brands pitch their products without appointments. Major retailers, including Pantaloons, Tata Group's Trent Ltd, Shoppers Stop, and Spencer's Retail, are actively emphasizing private-label retailing.

Challenges and Opportunities

While offline expansion presents significant opportunities, D2C brands also face challenges:

• Higher Costs: Setting up and maintaining physical stores involves higher costs compared to online operations.
• Competition for Shelf Space: Offline retail, especially in kiranas, has limited shelf space, and D2C brands face competition from established FMCG companies.
• Maintaining Brand Consistency: Ensuring a consistent brand experience across online and offline channels is crucial.

Despite these challenges, the trend of D2C brands entering offline retail is expected to continue as they strive to reach a wider audience and build sustainable businesses. The integration of online and offline strategies represents the next phase of growth for D2C brands in India, creating a more dynamic and customer-centric retail landscape.