Ogilvy's report encourages brands to pivot to direct-to-consumer strategies

July 14, 2021 | 11:12
New research from Ogilvy has found that direct-to-consumer (D2C) brands have a greater ability to adapt to shifting customer expectations amid the COVID-19 pandemic.
Ogilvy's report encourages brands to pivot to direct-to-consumer strategies
The latest report by Ogilvy encourages brands to adopt D2C for their digital journey

The information was stressed in the report titled “Driving Growth with D2C” by Ogilvy in collaboration with Verticurl, Ogilvy’s Delivery and Operations Center and commerce tools, a leader in the commerce platform and technology software space.

The rise of digital commerce is already transforming how customers in Southeast Asia shop, and the trend is accelerating. Brands need a D2C digital strategy to come out on top of this disruption and lead the market in the future. That is because D2C offers brands more intimate and resilient relationships with customers so they can create more insightful and effective brand experiences that set them apart.

Accordingly, online purchasing has been slower to catch on in Southeast Asia than markets like China. But last year, the pandemic significantly increased the adoption of digital services in Southeast Asia. New technologies, new platforms, and new consumer expectations are all on the rise, and brands in Southeast Asia including Vietnam should prepare for a ripple effect of changing habits with wide-reaching impact across all sales channels.

Online shopping marketplaces like Shopee and Lazada are driving digital commerce penetration and leading online customer experience trends in the region. But looking ahead, dependence on marketplaces for digital commerce strategy will come with rising costs, not to mention losing ownership of an increasingly precious asset: customer data.

The report argues that D2C provides the ability to adapt nimbly to changing customer expectations, offering unique experiences that set brands apart. Not only providing ownership of invaluable customer data but encouraging innovation and personalising offerings based on data-driven insight.

Last year, the pandemic significantly increased the adoption of digital commerce and related digital (???) The rise of digital commerce is already transforming how customers in Southeast Asia shop, and the trend is accelerating. Brands need a D2C digital strategy to come out on top of this disruption and lead the market in the future. That is because D2C offers brands more intimate and resilient relationships with customers so they can create more insightful and effective brand experiences that set them apart from competitors' services in Southeast Asia. Internet penetration, digital payment, and consumer trust in digital commerce all rose significantly in 2020. The region’s online industry is poised to triple to $309 billion in gross merchandise value by 2025.

Ogilvy's report encourages brands to pivot to direct-to-consumer strategies

According to Waheed Bidiwale, global vice president for Verticurl, Ogilvy’s Delivery and Operations Center, the digital commerce trend will eventually accelerate from lifestyle to the entire gamut of products and service categories.

“Brands that are thinking ‘I’m in a commodity business, or I am in the impulse purchase category or nobody buys a car online so I don’t need digital commerce’, need to relook at their strategies,” he added.

The Ogilvy report argues that the advantages of marketplaces will not be sustainable as a long-term option and eventually there will be associated costs such as a need to buy advertising in order to generate traffic on the site. These costs will inevitably be passed on to the consumer.

With D2C, the "middleman" is essentially removed, and these costs are avoided. This could ultimately result in greater savings for shoppers.

D2C gives brands a long-term edge by placing customer-centric innovation at the heart of how a company operates. Adopting a D2C strategy now will make sure your band keeps control of your customer data and customer experience.

Nguyen Dieu Cam, general director of T&A Ogilvy cum director of Ogilvy Consulting Vietnam hoped that the report will provide insightful information to support businesses build their digital transformation strategy, develop their brands and digital sales channels to make a breakthrough and conquer the market in the future.

By Ogilvy

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