Online Retailers Seek Customer Loyalty Beyond Festive Sales
Many direct-to-consumer brands are shifting focus from customer acquisition to retention, utilizing personalization and reducing reliance on discounts after peak sales periods.
As the festive season concludes in India, many direct-to-consumer (D2C) online retailers are strategizing to retain the customers acquired during peak sales periods. While festive sales often introduce shoppers to new brands, converting these one-time buyers into repeat customers presents a significant challenge, forcing brands to re-engage them with substantial marketing spend.
Industry conversations reveal a shift towards customer retention as a key growth lever. Brands are focusing on understanding purchase behavior and leveraging smart product recommendations to foster repeat business. The Bear House, a Bengaluru-based apparel brand that has scaled significantly with its topwear, is now aiming to increase contributions from bottomwear and complete outfits. Co-founder Harsh Somaiya explained the communication strategy: "If someone comes to us for shirts, the next conversation shouldn't be, ‘Here is another shirt.’ It could be, ‘If you liked this, here's how you can complete the look.'"
Libas founder and CEO Sidhant Keshwani emphasized that personalized communication significantly enhances the likelihood of a second purchase. He noted that customer segmentation based on product interests, age, location, and seasonality allows for tailored messaging, such as customized WhatsApp communications, at scale.
This focus on personalization aims to retain new customers at higher margins, moving away from discount-driven strategies. Many brands are experimenting with reduced discounting, even during peak seasons. The true measure of success lies in customers returning without further price reductions, as relying solely on discounts for repeat orders can erode profitability.
Women's occasion wear brand Koskii experienced this pressure during its online expansion. Co-founder Umar Akhtar contrasted their store sales, which largely occurred at full price, with the increased discounting needed for online campaigns. He cautioned against the "discount trap," where substantial markdowns can affect customer perception of original pricing and quality. The goal is to build loyalty that transcends constant price incentives, a critical but challenging aspect for long-term sustainable growth.