The Brain Wave
GoDirect was conceptualized when the world was facing one of the biggest crisis of this century i.e. Covid 2020 pandemic and the retail industry was in the midst of a crisis, trying hard to stay afloat. Factories were forced to remain shut to avoid human contact, supply chains were broken due to the travel restrictions and consumers were only visiting retail stores to pick essentials. As things were deteriorating, there were predictions that the erstwhile retail shopping experience of visiting stores, leisurely walks through different aisles, may become a distant reality. During this phase, GoDirect’s team was supporting Indian FMCG companies through its enterprise CRM product named Peri CRM which automates the entire supply chain of manufacturing companies, connecting sales and distribution channels with the last mile retail. As a result, we were in the thick of things observing the paradigm shift happening in the consumer goods industry, working with manufacturers to support their sales, marketing and distribution teams adjust to the new world reality where the end consumer no longer has easy, and adhoc access to the retail channel.
One fine evening, when the chaos was at its peak, GoDirect’s founding team was debating on a Zoom call how manufacturing companies in the consumer goods sector could have better prepared themselves for this day. And we realized that companies were heavily reliant on the retail sector to service the last mile consumers and once that node was shaky, there was no way for these companies to reach customer’s doorstep or redirect their existing distribution channels in and around the city (like a big wholesaler, or a local distributor or a fulfilment centre). The outcome of this constrained retail access was that the bigger brands in the market were winning the limited shelf space that was available at the retailers, and the smaller manufacturers had no opportunity or visibility to liquidate their stock when things got tougher. As a result, a lot of small businesses ate up their savings, many were forced to close operations, and some could never recover from that setback.
This crude realization on the state of Consumer packaged goods industry (CPG) and risks of relying purely on physical retail, soon became a spark for the GoDirect team and led us to the drawing board wearing our problem solving hats i.e. as management consultant (Harsh), farmer & supply chain expert (Harinder), technology architect (Ravi) and storyteller (Mandeep). To our advantage, we were already automating and enabling the FMCG supply chain journey through Peri CRM (from factory till the retail shelf), and there was an opportunity to do forward integration and impact the last leg of the journey i.e. connecting manufacturers (and farmers/artisans) directly with consumers, through an amazing technology platform which is easy to adopt, scalable and ethical.
Towards D2C
Analysis from multiple drawing board sessions from June till August 2020 led us to exploring the pure eCommerce model with D2C or Direct to consumers marketplace as one of the core pillars where our platform connects the consumers directly to the source of the goods whether its a factory, a farm, a cottage industry, or an entrepreneur’s garage. Although popularized recently, D2C has been there when civilizations moved from a barter to a currency-driven trade and producers would gather in bazaars of a city or travel on horsebacks to sell their products. And that trend continues till date via the hundreds of farmer markets spread in Canada and the United states (keep an eye on our blog on farmers markets). That begs the question how is today’s D2C model different from the older one and how GoDirect D2C (in its current 2023 avatar) was conceptualized. To answer that, let us first look at the top 5 essential components of building a modern D2C brand in North America:
First and foremost is the manufacturing because unless a brand is also the source of the goods, it cannot be technically called a D2C brand. Having said that, one can argue that a lot of big manufacturers today outsource a part or whole of their production to factories in low-cost or mass scale geographies like China, India, Bangladesh, Vietnam. To keep it simple, the first building block of a modern D2C brand in Canada and the United States is to have a manufacturing setup producing one or more products. Which also means that the scale of operations of a brand doesn’t really matter in a D2C model, as there are successful D2C players who started off with just one product/SKU focused on giving the best value to end consumers in terms of quality, price, delivery and after-sales service.
Once the goods are manufactured and ready, the next requirement for a D2C model is the digitization of inventory which is an initiation of the product’s journey from a central location (could be a factory warehouse or a central depot) to the customers door. Only a digitized inventory can be put on a D2C platform (whether that’s its own website or a marketplace). Inventory digitization is simpler than it sounds because one needs to keep updating the finished goods stock which is getting out from the production line and entering the warehouse. Accuracy is especially important here as customers prefer a live view of inventory so that they are certain about their delivery dates before making the payment. And not to forget, digitizing inventory manpower is the first cost (although minimal) associated with entering a D2C play for brands.
Once the above two components are managed at the manufacturers end, the third component is to list the digitised inventory on one or more online D2C platforms. During the foundation years of D2C, most brands were focused on building their digital channels (website and social media), however the recent trend has been to utilize a D2C marketplace like Amazon which although is not a pureplay D2C but attracts brands of every shape and size (do read our blog Brands must evaluate the cost of listing on Amazon). It goes without saying, there are costs associated with listing inventory on a platform, be it inhouse or a marketplace. And depending upon what scale of operations, inhouse capabilities and a multitude of factors, every manufacturer must thoroughly evaluate the cost-benefit equation before entering the D2C space.
The biggest challenge for a D2C brand in terms of predictability and control is the customer acquisition which includes creating awareness, demonstrating the value proposition of switching from alternative means including physical or online grocery platforms, motivating the consumers to signup and take a look at the products. Although it sounds pretty straightforward, its super tough especially if one thinks in terms of probability of organically finding the target consumer out of millions of consumers that are active online. Which is why brands resort to inorganic means of acquiring customers either through qualified databases, proxy social media, and other related content. It is worth noting that brands often identify early adopters for their D2C go-to-market strategy, and create some traction of the business model with them and based on the outcome, then plan a full-blown growth strategy.
The last and perhaps the most difficult step for a D2C brand is to continue the stickiness of customer acquisition, keep reiterating the value proposition throughout the product exploration journey, and generate enough trust in the platform for a consumer to make a purchase decision. We call it the electronic or eSale which is when a consumer places an order to a D2C manufacturer and pays for the goods through a payment gateway or chooses a cash on delivery option. During this process, step 2 i.e. a precise inventory value and an expected delivery date are very important because any error at this stage would totally ruin the confidence of the customer who may never come back to the platform again. If the brand is using its own D2C channel then the money is reflected in it right away, if its using a marketplace, then it depends upon the payment terms of the marketplace vendor (it could be Transaction date +xx days).
eCommerce Statistics
Before we delve further into GoDirect’s concept and business model, let us look at some eCommerce stats. In recent years, the North American ecommerce/mCommerce landscape has experienced remarkable growth, cementing its status as a dominant force in the global digital marketplace. With an ever-expanding user base, the region boasts a staggering number of online shoppers, surpassing 100 million. The adoption rate of e-commerce in North America has shown an upward trajectory, fueled by factors such as convenient mobile shopping, secure payment methods, and expedited shipping options.
However, at a macro-economic level, it is interesting to note that the majority of packaged consumer goods sales still come from the traditional sales and distribution channels requiring physical touchpoints like big-box retail, convenience and specialized stores. And even with the widespread awareness about eCommerce and the blatant use of offers, rewards, outreach through digital marketing, and many other incentives given by eCommerce market leaders, the eCommerce adoption remains low where only 18% of all consumers purchase 60% of all consumer goods online. These numbers become more striking for mCommerce (shopping done using only smartphone as a device with no browser, no laptop or any other medium of interaction) with only 8% of all retail transactions will take place through a mobile device (eMarketer | InsiderIntelligence). Having said that, the leading indicators for mCommerce are promising:
- New app downloads in 2021 numbered 230 billion, a 5% YOY growth and a whopping 435,000 app downloads per minute.
- Daily time spent on apps was 4.8 hours per user, a 30% increase from the previous year.
- Mobile ad spending totaled $295 billion, a 23% increase. (Data.ai)
- About 77% of American consumers use their mobile phones in stores to compare prices. (Emizentech)
- Today, 15% of US adults are mobile-only, meaning a smartphone is the only device they use. (Shopify)
Now if you look at the D2C segment within the eCommerce sphere, the numbers dwindle pretty quick. Although, the segment within the e-commerce industry has gained significant attention over the past few years, but its adoption in North America, particularly among smaller brands, has been relatively slower compared to established larger brands. While D2C models offer brands greater control over their products, customer data, and brand image, the complexity of logistics, marketing, and customer acquisition has presented challenges for smaller players. According to various reports, as of September 2021, D2C sales accounted for a decent portion of overall e-commerce sales in North America, but the majority of this share was captured by prominent players like Warby Parker, Casper, and Dollar Shave Club. These larger brands have leveraged their brand recognition, investment capabilities, and resources to establish successful D2C operations. However, smaller businesses have faced hurdles in terms of customer acquisition costs, supply chain management, and building brand awareness in a competitive digital landscape. One factor contributing to the slower adoption among smaller brands is the significant investment required in technology, marketing, and logistics to effectively operate a D2C model. Moreover, the dominance of e-commerce giants like Amazon has made it challenging for emerging D2C brands to stand out and attract customers.
GoDirect Is Born
Looking at these industry stats, GoDirect’s team was amazed how little experimentation, innovation has been done by startups in the mCommerce space to create an optimal balance between pure mCommerce and D2C marketplace especially for the groceries business vertical. As we kept researching the mCommerce ecosystem in North America, we were getting clear signs that there is a dire need to build a scalable platform which can address two clear industry problems
- Give consumers a supermarket/hypermarket experience on their smartphones through an intuitive, easy-to-use, highly scalable mCommerce platform, so they can browse, order and plan their daily, weekly and monthly grocery needs, keeping in mind their ethnicity, geographical dynamics, individual/family preferences, shopping habits, need for convenience, and needs for buyer and seller relationship.
- Give sellers a fair, easy-to-adopt, feature-rich D2C marketplace where they can list, market and sell a portion or all of their products. And although the small-to-mid scale manufacturers and farmers have been introduced to the D2C way of selling via various platforms like eBay, Etsy, Amazon; the layman, neighbourhood, these platforms were not a best fit for Grocery vertical. Also, no platform was designed grounds-up specifically with the vision of creating well designed, philanthropic, socially-conscious, and fair-trade institutions for the sellers.
Early 2023, GoDirect’s founders met key industry stakeholders in Canada and the United states (from Toronto to Colorado all the way to Texas) and took a strategic decision to launch GoDirect as a hybrid model combining unique value propositions of both pure eCommerce and pure D2C model and hence GoDirect was born. Here’s how we are positioning GoDirect in North America’s eCommerce ecosystem:
GoDirect is a smartphone-only eCommerce platform to sell physical & digital products to end consumers in a particular geography, with a vision to spread across multiple eCommerce verticals like groceries (perishables and non-perishables), baby care, personal/health care and more depending upon the organization’s roadmap. Our goal is to become a platform that will suffice the current & future demands of any household, any consumer in that geography; 24 hours a day, 365 days a year with a high degree of ease & predictability, digitally first and then physically.
GoDirect’s Mission
GoDirect is on a mission to become a leading Consumer retail brand in the grocery vertical using a multi-phased approach as described below:
- Phase1: Equipped with an intelligently designed, user-friendly, and feature-rich mobile application, GoDirect’s mission is to get installed on smartphones of 3+ million Canadian eShoppers, source and list 1000+ products from top North American sellers and importers, and influence a paradigm shift in grocery shopping from physical to digital, resulting in incremental benefits to consumers in terms of assured availability, quality, affordability and comfort of smartphone.
- Phase2: The phase where we up the game and start hitting home-runs, to be disclosed in due time.
- Phase3: The phase where we establish a leadership position in North America and become a talked about brand in every household, to be disclosed in due time.
GoDirect’s Vision
By becoming a leading Consumer retail brand, GoDirect’s vision is to create a technology enabled sales & distribution ecosystem for thousands of North American Sellers (manufacturers, farmers, and other creators) where these sellers get an alternative channel in addition to relying on big-box retail (like Walmart, Costco), local markets (farmer markets, boutique stores) or online marketplace platforms (Amazon, Shopify). By continuously delivering an innovative, intelligently designed and useful mobile application, GoDirect wants to make online shopping a simple, pleasurable and rewarding experience for North American shoppers, (individuals, families or elderly) so that they can go about grocery shopping in a planned manner, at the same time giving them the flexibility to procure products 24×7, 365 days a year, yet being time and cost effective without squeezing margins out out of producers.
GoDirect’s Strategy
To continuously move towards the mission with a keen eye on the vision, GoDirect is deploying the classic time-test eCommerce strategies as described below:
- Technology: Everything that GoDirect does will be routed by technology whether that’s activating sellers, listing products, narrating stories, managing inventory, tracking delivery, engaging online with consumers. Low tech, high tech, AI, data analytics, and more, you will find on GoDirect as we traverse our journey.
- Marketing: GoDirect will deploy the industry tested as well as innovative strategies of customer acquisition using various marketing techniques (ATL and BTL, digital, physical) while creating unique, substantial value proposition in consumers mind to organically signup, shop, refer and remain loyal to us for perpetuity.
- Last-mile Delivery: GoDirect will continue to improvise and improve its delivery TAT depending upon the needs of consumers in a particular geo cluster as we experiment newer ways of bringing products from our network of warehouses to the consumers door.
GoDirect’s Goals & Objectives
GoDirect puts a laser focus on the gaps, needs and expectations of consumers as we enter various geo clusters in North America. Below are the regions which GoDirect is working at this moment (when this blog is published) with a brief on the immediate goals and objectives we have set for ourselves:
- Brampton: A land of dreams, opportunities and pseudo homeland for a lot of ethnic communities, Brampton is on top of GoDirect’s list of cities that we can want to service and gain leadership position in. GoDirect has activated 8000+ postal codes in Brampton alone, and anticipate 11 delivery routes cross-crossing the city throughout the day.
- Mississauga: Very similar to Brampton but with a strong, unique flavor of its own, Mississauga boasts a modern lifestyle, access to Lake Ontario, Canada’s busiest airport, a strong commercial footprint and is therefore the 2nd city GoDirect has activated comprising 12000+ postal codes with a plan to open 10-15 delivery routes. Mississauga is also the place where GoDirect has opened its first Dark store (check our Google listing for details).
- Etobicoke: A less dense, suburban neighborhood of Brampton and Mississauga with large expanses of industrial lands along the various expressways, Etobicoke has a beautiful Lakeshore region, hosts the famous Humber college and has been gaining popularity in the immigrant community who want to live in Condos away from the hustle bustle. GoDirect has activated 8000+ postal codes in Etobicoke and anticipate 2 delivery routes due to overlap with both Brampton and Mississauga.
Conclusion & What's Coming Next
GoDirect is the new, eager kid on the block working towards carving out a unique space in the eCommerce, mCommerce grocery ecosystem in North American, which today is led by big-box retail brands (Walmart, Costco) or by delivery platforms (Instacart, Doordash, Uber Eats). GoDirect is founded by an amazing team of close friends, passionate entrepreneurs, and highly capable professionals who are building a platform with all the right ingredients, brick by brick without taking any shortcuts, whether that’s in technology, supply chain or marketing. And GoDirect believes in collaboration, partnership, leveraging capabilities and growing together rather than at each others expense. So here’s a shout out to:
- Sellers: Come talk to us on your Sales goals, product listing, and other forms of collaboration, we are available on email, on phone call or physical meeting anywhere in Canada. Refer the links below.
- Buyers: Download our amazing mobile application using the links below and explore our constantly growing portfolio of products which will bring a smile to your face and once you order, it will save you time, dollars at the same time ensuring good healthy and peace of mind.
