With nearly 1,000 D2C brands born each year, how Smytten uses sampling to ensure better adoption
When it comes to trying new brands and products, a 32-year-old marketing manager Shilpa S is an expert. Its virtual shopping carts are full of new brands and samples of new products.
“These brands give me the best in shades and colors, and by sampling the most recent products, I also have the ability to see if I want them or not, or if they are right for me,” says Shilpa. Your story.
Shilpa is one of the many millennials who prefer to shop online and are open to trying new brands. She’s also one of the many who end up sampling nearly five million new products from emerging D2C brands.
A report by Avendus Capital on D2C brands in India stated that the addressable market size for this industry would be $ 100 billion by 2025. Another report from PGA Labs and Knowledge Capital suggests that investors had invested $ 1.4 billion in D2C companies between 2014 and 2020. The sector experienced a investment of nearly $ 417 million in 2020.
And startups likeplay an important role in facilitating this trend. Founded in 2015 as an online discovery and testing platform for premium products and services by a former Googler Swagat Sarangi and former Unilever executive, Siddhartha Nangia, the platform follows a Data-driven targeted sampling approach and takes into account real-time feedback from millions of users after sampling.
but why is it important? When the startup was first launched, the D2C ecosystem wasn’t as popular, but today user sampling is one of the easiest ways for many of these D2C brands to get the right ones. reviews for the niche segment they are targeting.
Free conditioner with shampoo
This, adds Swagat, is also a proven model. He explains that in the FMCG market, many brands have realized that consumers do not add shampoo and conditioner together to their shopping cart out of habit. So the big FMCG brands have decided to sell shampoos with a small sachet of conditioner.
“The industry has been doing this for over half a decade, and it has led to a change in behavior. It was an educational phase for the consumer. From now on, D2C brands will go through this phase where they have to educate consumers a lot about what they offer. This makes sampling an important part of the game, ”explains Swagat.
The main categories where Smytten has experienced significant growth are – natural and vegan beauty, wellness and the entire F&B segment. Many top D2C brands such as Mamaearth, Plum, mCaffeine, etc. are already leveraging Smytten’s platform to reach relevant users at scale and deliver a first-hand product experience through sampling.
Varun Alagh, Co-founder,said, “Smytten has proven to be one of the most efficient, focused and data driven sampling platforms for us as we aggressively grow our business. The ROI from our sampling has been excellent on Smytten and he has helped us to conduct trials with many new Mamaearth users in a very efficient manner. “
Growing brands with strong innovation
“We work in 10 categories which are all aimed at households whose annual income exceeds Rs 10,000 and more. In this segment, there are more than 40 to 50 million households, out of the 250 million households. They are digital natives, who are starting to make money, spend money, and want good things in life – and want to live, eat and dress well. They are looking to improve their shopping cart and add exciting new products, ”adds Swagata.
In the past year alone, the startup has seen nearly 900 to 1,000 new brands in 10 categories. This means that almost 100 to 200 new brands are in each of the 10 categories.
These D2C brands aim to fill a large gap between consumer demand. Large companies are unable to meet these demands due to their long gestation cycles in terms of product development and launches.
Distribution of crack with samples
As D2C brands break new ground in product innovation and hit the right niche, they will need to grow and grow. The next step would be to dramatically increase their marketing budget to combat the distribution power of the biggest consumer brands.
“For example, Unilever has more than 4.5 million touchpoints that are covered directly and indirectly in its distribution ecosystem. The way the D2C brands are positioned, they don’t need those touch points. This means that they will have to consider new and different modes of distribution, ”says Swagat.
However, even when looking at innovative distribution methods, consumers can only embrace these brands and products when they provide consumers with the product experience at scale.
“No matter how many ad placements you choose or storytelling you do, almost 40% of the purchase happens with personal experience. India is a trust deficit market, and as a culture we are very suspicious. To drive at scale, you have to create that personal connection and allow the consumer to have a direct product experience, ”he adds.
That’s why many big D2C brands do it by sampling.
Minimize the cost of breakdowns
Swagat says it’s also important to understand the failures and successes of the distribution strategy. He adds that over 80% of new product developments fail, even for large companies, even with a lot of research.
“The nature of the beast fails when it comes to some of the new products, and when you deactivate the products at the pace of the D2C brands, the failure rate will be higher. This makes it easier to sample and see if a given product is working or not, ”adds Swagata.
Apart from that, the other reason for failure is – replacement. The biggest problem for any brand today is the first try. Swagata believes that the consumer by nature is averse to change, especially when it comes to personal care. According to a research paper titled “Consumer Attitudes and Perceptions on Personal Care Products and Cosmetics,” consumers are widely aware of personal care products and do not readily purchase new products.
So, if brands don’t do large-scale sampling and give experience, the replacement cycle will be just high, especially if they want to replace a trusted brand and product.
Smytten initially started out as an invite-only platform, but around 2018 the market started to explode due to increased digitization and better internet connectivity.
“Consumerism was on the rise in India, and we realized that many new brands were going to appear. There was also a lot of content consumption in the online ecosystem as shopping moved online. There was a lot of research on buyouts and then we saw an opportunity where these brands were going to show up, ”says Swagat.
Today, the startup has grown to ensure a better pre-purchase shopping experience for the user. Right now, the startup hosts over 700 D2C brand partners on its platform across various categories and allows millions of products to be sampled for them every month.
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