Why D2C brands have to embrace tech to manage complexity of scale

"As ecommerce has grown exponentially in the past three years across India, its challenges are peculiar by region and geography," said Prakash Kumar, Co-founder and Product Architect, KartmaX (KartmaX is developed by GreenHonchos), an enterprise-grade ecommerce platform, at TechSparks 2021, India's most influential startup-tech conference hosted by YourStory.

With the theme 'What's Next: Rethinking the Future', YourStory's flagship startup-tech conference provided a platform for the most defining conversations on how disruptive technology innovations can shape our lives post-pandemic.

“India’s ecommerce is growing at an unprecedented pace,” Prakash said. "The pandemic and the new normal has only accelerated it further." According to technology advisory Gartner, Tier 2 and Tier 3 cities grew by 90 percent year-on-year in terms of volume and value in the quarter ended December 2020. These cities contributed to 43 percent of the business in terms of value.

"With such growth comes unique challenges, which technology is well-pressed to overcome and help business grow seamlessly," Prakash said.

For merchants and emerging D2C (direct-to-customer) brands, keeping track of indicators like number of visitors, conversion rate, and average order value is imperative. “Technology can make a deep impact on these key metrics with minimum human intervention,” asserted Prakash.

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Prakash cited personalisation in ecommerce. The conversion rate in physical stores is typically between 10 percent and 30 percent, whereas it is between 1 percent and 3 percent in ecommerce over a larger base of visitors, he noted.

While the conversion rate in physical stores is typically attributed to salespersons and their recommendations, the volume of online visitors is much higher.

That's where AI-ML and big data are crucial to analyse customer preferences through browsing history, their affinity to products, demography and geography. "With the help of analytics, sellers can plan their assortment to suit customer needs," Prakash said.

Similarly, NLP (natural language processing) can be used to automate customer interactions, where the algorithm can be trained to respond like a human, he said.

NLP gives computers the ability to understand text and spoken words in much the way human beings understand text and speech. "This can be used to enable customers to converse with a business after purchases are made," Prakash said.

Artificial intelligence (AI) also has applications for merchants and D2C brands to handle risky and fraudulent orders placed online, he noted. "This is common for merchants in COD (cash on deliveries), as people return products after ordering. AI can flag such risky orders based on data about customers' order history, and can even be used to power decision-making," Prakash explained.

Technology will play a major role in scripting the success of ecommerce, Prakash reiterated. "We are yet to see many challenges of scale—and the innovative solutions that technology can offer."

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