Don’t be a DNVB for the sake of it – build a strong brand

Was your brand born on the internet? Are you in charge of every detail of your product and brand experience, from factory to consumer? Then congratulations, you are the proud owner of a DNVB – a Digital Native Vertical Brand. Think brands like The Honest Company, Dollar Shave Club, Glossier and Bonobos – the men’s trousers business started by two Stanford grads in 2007, which Wallmart bought for a cool $310 million in 2017.

Back then, Bonobos was seen as the ultimate start-up success story. These days everyone wants to be a DNVB – even those businesses who are anything but vertical nor have digital embedded in their DNA. Are DNVBs still relevant or just hype? Can you evolve into a DNVB?

Absolutely. At Emakina, we’ve learnt a lot from partnering with DNVB clients like Fulllife – businesses that have managed to turn commerce models on their heads or disrupted their industry. These businesses represent everything a brand should be in 2022: one that revolves around digital, customer experience, data collection and content. It’s a brand that’s poised to expand internationally and grow beyond the web, as many DNVBs end up doing. More about that later – let’s first break down what DNVBs are to see how your brand can learn from their success.

It’s not e-commerce, it’s v-commerce

E-commerce is such an integral part of our lives now that it’s hard to imagine a time before it. While most people were shopping on Amazon and ebay in the late 2000s, brands like Bonobos created an entirely different model of selling directly to consumers than trusted brick-and-mortar businesses. E-commerce became v-commerce = vertical commerce.

These v-commerce brands were manufacturer-brand-retailer all in one, run completely online and selling a small niche range of products (or even just one product). There was always a compelling founder story and a transparent, authentic approach that endeared the brand to fans. By cutting out the middle man, brands could take advantage of low overheads to gain higher margins and control. 

Bonobos founder Andy Dunn coined the term DNVB – essentially a combination of a vertical business model and a digitally born brand. “The digitally native vertical brand (DNVB) is maniacally focused on the customer experience. Its primary means of interacting, transacting, and story-telling to consumers is via the web.”

But just because DNVBs are born online, doesn’t mean they can’t expand into other forms of marketing and selling. Many brands go ‘phygital’, opening pop-up or permanent stores, or selling their products with other online retailers, department stores and marketplaces. Selling direct-to-consumer is an easy way for a start-up to scale but often ends up with it moving into the ‘real’ retail world.

Brands in tune with the times

There is much to learn from DNVBs but it’s not the end of the world if your product lived in retail stores first and then migrated online. In the end, these are the things that make a DNVB – and indeed any brand – successful right now:

• Strong concept: Many DNVBs started with a very clear, simple idea. Dollar Shave Club knew that razorblades were notoriously expensive, so started a subscription service that sent blades to customers automatically every month, at a reasonable price. Honest saw a gap in the market for a provider of eco-friendly and natural baby products and home goods.
  
  These founders typically move into an industry that hasn’t evolved for a long time and completely reimagine it. One after the other, industries from optometry (Warby Parker and Polette) to mattresses (Casper and Tediber) were transformed. Even if it’s not a new product (think the oversaturated world of beauty), brands like Glossier and Typology found ways to relook the way things have always been done. Emakina client Fulllife saw the opportunity of an exploding gaming industry with no gaming wear, so launched this niche fashion range online.

• Optimised digital experience for clients: Since the whole business lives online, every digital interaction must run smooth as butter. DNVBs put digital at heart of its marketing and sales strategies – something we as the User Agency embrace as digital is also part of our DNA. It uses the web as the primary means of communication because that’s where millennials and digital natives expect brands to be. With digital at its core, a DNVB can easily add other omnichannel experiences. Even the shopping experience can be unique. Take the example of Fulllife, where the entire UX takes its cue from the gaming world – for example earning points and unlocking products when you reach a certain status.

• Constant data collection improves the client experience: Since DNVBs control their whole supply chain, they can carefully track inventory and feedback to improve products. Data can be used to create top quality customer service and personalised experiences that grows long-term loyalty.

• Engaging content strategy: DNVBs understand social media – both for encouraging user-generated and influencer content but also as a form of dialogue to quickly solve customer service issues. Glossier founder Emily Weiss ran beauty blog Into the Gloss for years before launching her beauty range – built almost entirely through Instagram. User-generated content is a great way to organically grow a business – not only in terms of conversion rates, but also as social proof of an authentic, positive experience with a business.

• A strong philosophy: DNVBs almost always has an inspiring story or radical philosophy that’s well suited to storytelling. They immediately seem more accessible than the retail giants and by solving a problem, makes it feel very people powered. V-commerce brands are all about creating a feeling of transparency.

To sum up: we admire what DNVBs stand for and how they are constantly reinventing the customer experience, putting the user back at the centre of the brand focus. What the COVID-19 pandemic has taught us is just how quickly offline retail had to shift online. By 2025, a quarter of total global retail sales will happen online. Digitally native brands are immediately ahead of the curve.

That’s not to say retail is just digital. We think DNVB as a buzzword will soon fade as innovators find more convenient and adventurous ways for people to shop, such as through the metaverse or AR/VR experiences. We’re excited to see where the DNVB mindset will take us. If you need help on your digital transformation journey or want to move your digital brand into new markets, get in touch with Emakina today.

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