Are digital-first D2C brands now influencing the traditional retail landscape?

In the last half-decade, more than thousands of digital-first D2C brands went offline and opened their retail stores for consumers to expand their reach and also provide a face-value experience for their customers to connect more with the brand.

Brands like Nykaa, Sugar, BoAt, Organic Harvest and many more have established themselves as a strong online and offline player in the market game. When Nykaa released their beauty report 2024 recently, it clearly indicated that the consumer was evolving because of multiple reasons like technological advancements, social media influencers and changed product penetration in tier towns, where retail is an extremely strong force. Lately, quick commerce and e-commerce have changed the game.

When Mihir Wakharkar, Business Head- Online D2C, EatSure, Rebel Foods, was asked about the kind of impact he thinks digital first D2C brands have on the performance of other retail brands that were already established as only retail stores, he said “The impact is real. We have established brands doing everything from rapidly expanding their digital presence to pursuing strategic acquisitions. As for the new age, digital-first brands operate in a different realm. Many of these digital native brands continue to function autonomously, retaining dedicated teams. This demonstrates their unique market approach and the importance of preserving their distinct identity within a larger portfolio.”

But a revamp is important for digital-first D2C brands to get customers to their offline stores. “D2C brands have the digital-first DNA, much like the traditional brands have the offline-first. As a result, many D2C brands struggle to implement their omnichannel strategy, as offline space is a problem with different complexities. To navigate this, I believe, D2C brands should consider investing in specialized personnel who understand the nuances of offline retail. Additionally, many brands tend to prematurely abandon their offline efforts due to the longer payback periods compared to online models. Success in offline expansion demands patience and a clear understanding of its unique growth trajectory,” Wakharkar added.

As for Samit Sinha, Founder and Managing Partner of Alchemist Brand Consulting, “Most digital-first D2C brands that we see in the retail market have been in the beauty space. They have understood the market and have done very well for themselves. But there are some key learnings here, even with a D2C brand you can't be 100% online, because in some of these categories like skincare or makeup, consumers need to have the kind of accessibility to experience and actually see, smell, touch, and test the product in order to make up his mind about the brand, as it builds connection and a reliability. But once that confidence is established and the consumer has familiarity with the brand, online becomes a way easier option and the co choice as well, as it saves a lot of time and hassle to the consumer. A purely exclusive online selling model is going to be difficult to sustain, unless you have a tremendous price advantage, which isn't the most important factor but the quality is.”

What the future has in store for the retail landscape also comes with the question, whether the market will reach a saturation stage between offline and online sales making an equilibrium in the future. In a conversation with e4m, Mr. Preetam Jena, CMO and e-commerce head at Fixderma India Pvt Ltd said “We’re likely moving toward a balance, but saturation may take time. Online-first D2C brands lead with quick product cycles, driven by global trends, while established brands dominate when a trend gains volume. Offline channels, with their stronger distribution networks and localized customer relationships, remain a major force in India. A saturation point may come when the competitive advantages of both channels—convenience online and trust offline—are fully integrated into omnichannel strategies.