What is a Digitally Native Vertical Brand (DNVB)?
A digitally native vertical brand (DNVB) is a company that begins online and operates with a unique approach, controlling every step of the customer journey from start to finish.
Unlike traditional businesses that may rely on retailers or third-party vendors, DNVBs handle everything—from product design and manufacturing to marketing and direct sales—through their own channels.
DNVB Meaning Explained
Breaking down the term “digitally native vertical brand” helps clarify what sets them apart. “Digitally native” refers to businesses built and launched online rather than transitioning from brick-and-mortar origins.
“Vertical brand” emphasizes that these companies control all aspects of their production and customer interaction, enabling them to maintain consistent quality and branding while bypassing traditional middlemen.
Key Characteristics of DNVBs
- Online-First Business Model: DNVBs are established in the digital space, often starting as ecommerce-only businesses and sometimes expanding to physical locations later.
- Direct-to-Consumer Approach: These brands sell directly to their customers without intermediaries, giving them better control over pricing and customer relationships.
- Full Customer Experience Control: From initial product design to post-purchase experience, DNVBs manage the entire process, ensuring a cohesive and high-quality customer journey.
- Data-Driven Decision Making: By collecting and analyzing customer data, DNVBs can refine their products, improve their services, and tailor their marketing to meet the needs and preferences of their target audience.
How Digitally Native Vertical Brands (DNVBs) Differ from Traditional Brands
Here’s a detailed yet concise look at what sets them apart:
1. Origin and Business Model
- DNVBs: These brands are built online from the start, selling directly through their digital platforms.
- Traditional Brands: Often start with physical stores or partner with retailers before expanding to online sales, like Nike, which balanced its growth between retail outlets and its own channels.
2. Control Over the Supply Chain
- DNVBs: Own every step from product design to sales, enabling consistent quality and competitive pricing. Glossier, for instance, oversees its entire process, ensuring cohesive branding.
- Traditional Brands: Depend on wholesalers and retailers, leading to less control over product presentation and pricing.
3. Customer Experience and Relationships
- DNVBs: Build close, data-driven relationships by selling directly and collecting customer feedback.
- Traditional Brands: Rely more on third-party retailers, limiting their ability to tailor the customer journey as precisely as DNVBs.
4. Agility and Innovation
- DNVBs: Can quickly adapt to trends and customer needs due to their direct oversight.
- Traditional Brands: Innovation is slower due to involvement from various partners, making rapid changes difficult.
5. Cost and Pricing
- DNVBs: Avoid middlemen, which means lower overhead and more competitive pricing for customers.
- Traditional Brands: Have higher costs due to complex distribution channels, often leading to higher consumer prices or lower margins.
6. Marketing Strategies
- DNVBs: Use targeted, data-driven marketing, influencer partnerships, and community engagement.
- Traditional Brands: Historically, they rely on broad, less personalized campaigns but are gradually integrating more digital strategies.
15 Digitally Native Vertical Brand (DNVB) Examples
Each DNVB brand demonstrates how DNVBs leverage their online-first approach, control over the supply chain, and direct-to-consumer strategies to redefine their respective industries.
1. Warby Parker
Industry: Eyewear
What Makes It a DNVB: Warby Parker disrupted the eyewear market by starting as an online-only brand that designs, manufactures, and sells glasses directly to consumers.
By cutting out traditional retail markups and offering a home try-on program, Warby Parker emphasized customer experience and transparency, hallmarks of DNVBs. Here’s how Warby Parker’s home try-on program works:
2. Glossier
Industry: Beauty and Skincare
What Makes It a DNVB: Glossier emerged from a beauty blog and became a DNVB by leveraging community feedback to develop its products.
The brand controls its production and distribution, allowing it to maintain consistent branding and direct connections with its customers through its ecommerce platform.
3. Casper
Industry: Sleep Products
What Makes It a DNVB: Casper changed the way consumers buy mattresses by introducing an online-only model that cut out the middleman.
The brand focused on simplicity with a single product offering, a direct-to-consumer strategy, and a 100-night trial period that increases perceived value.
4. Allbirds
Industry: Footwear
What Makes It a DNVB: Allbirds is known for its eco-friendly shoes made from sustainable materials.
By controlling its supply chain and selling directly through its online store, Allbirds reduces costs and maintains quality. Its transparent approach to sourcing and commitment to sustainability solidify its position as a DNVB.
5. Dollar Shave Club
Industry: Personal Grooming
What Makes It a DNVB: This brand popularized the subscription model for grooming products, delivering razors and other essentials directly to customers.
Dollar Shave Club’s online-first strategy and full control over manufacturing allowed it to provide convenience and affordability that disrupted established grooming companies.
6. Bonobos
Industry: Men’s Clothing
What Makes It a DNVB: Bonobos started as an online-only brand focused on better-fitting men’s pants. The company’s direct-to-consumer model and control over production helped create a unique shopping experience that emphasized quality and fit. The brand’s success paved the way for its acquisition by Walmart.
7. Away
Industry: Travel and Luggage
What Makes It a DNVB: Away launched with a direct-to-consumer model offering high-quality, functional luggage with innovative features like built-in USB chargers.
The brand’s control over the design and manufacturing process allowed it to create a seamless customer experience and maintain brand consistency.
8. Brooklinen
Industry: Home Goods (Bedding)
What Makes It a DNVB: Brooklinen sells luxury bedding at more affordable prices by cutting out traditional retail channels and selling directly to consumers.
Brooklinen ensures consistent quality and builds direct customer relationships by managing its supply chain and operations.
9. Rothy’s
Industry: Fashion (Footwear)
What Makes It a DNVB: Rothy’s is a DNVB that uses eco-friendly practices to create shoes from recycled materials.
The brand designs, manufactures, and sells its products through its own platform, enabling complete control over the customer journey and product quality.
10. Everlane
Industry: Fashion
What Makes It a DNVB: Everlane is known for its radical transparency, showcasing the true cost of production and maintaining ethical manufacturing processes.
The brand sells directly to consumers, controlling everything from design to distribution to emphasize quality and fair pricing.
11. Outdoor Voices
Industry: Activewear
What Makes It a DNVB: Outdoor Voices promotes an inclusive approach to fitness with its “Doing Things” mantra. By designing and selling directly through its own ecommerce platform, the brand maintains a consistent message and product experience.
12. Harry’s
Industry: Shaving and Grooming
What Makes It a DNVB: Harry’s integrated vertically by owning its manufacturing facility and selling directly to customers.
This approach allowed the brand to offer competitive pricing, control product quality, and engage directly with its consumer base, challenging legacy brands in the grooming market.
13. Reformation
Industry: Women’s Fashion
What Makes It a DNVB: Reformation has built a reputation for sustainable fashion by designing and producing its clothing with eco-friendly materials.
Its direct-to-consumer model ensures customers receive high-quality products without traditional retail markups, aligning with the DNVB ethos of transparency and sustainability.
14. Chubbies
Industry: Men’s Casual Wear
What Makes It a DNVB: Chubbies emphasizes fun and community in its brand messaging, selling directly to consumers through its online platform.
The brand controls its product line and distribution, creating a consistent, direct engagement with its customers.
15. Bombas
Industry: Apparel (Socks and Underwear)
What Makes It a DNVB: Bombas differentiates itself by combining high-quality products with a strong social mission: donating a pair of socks for every pair sold.
The brand’s direct-to-consumer approach allows it to maintain control over its marketing, production, and customer interaction, ensuring a cohesive brand experience.
⭐ Actionable Insight: Take inspiration from these DNVBs by focusing on customer orientation, simplicity in product offerings, and building a strong community around your brand. Whether through unique product features, strong brand stories, or direct engagement, success lies in creating a meaningful connection with your audience.
How DNVBs Market and Grow Their Brand
DNVBs approach growth with innovative, customer-focused strategies that set them apart from traditional brands.
Here's an in-depth look at how DNVBs effectively market and scale their businesses:
1. Build a Customer-Centric Experience with Exclusive Programs
- Why It Works: DNVBs are known for fostering deep connections with their customers. Offering exclusive programs, such as early product access or VIP loyalty clubs, can strengthen these bonds.
- Example: Brands like Brooklinen use exclusive loyalty programs that reward top customers with early access to product launches and private sales.
- Actionable Strategy: Create a tiered loyalty program that provides perks like early access, free shipping, or members-only product lines. Promote these benefits through targeted emails and community updates.
2. Emphasize User-Generated Content (UGC)
- Why It Works: UGC builds trust and enhances brand authenticity. DNVBs can leverage their communities to create relatable content that showcases real-life product use. You can look at the best 19 UGC (User-Generated Content) Platforms for Brands.
- Example: Rothy’s highlights customer reviews on their website and social media to create a sense of community and credibility.
- Actionable Strategy: Encourage customers to tag your brand on social media and feature their posts on your product pages and social channels. Use incentives, like contests or giveaways, to boost participation.
3. Leverage Data for Hyper-Personalized Marketing
- Why It Works: DNVBs have direct access to customer data, enabling them to deliver highly personalized marketing messages that resonate.
- Example: Allbirds uses browsing and purchase history to send tailored product recommendations via email and on-site notifications.
- Actionable Strategy: Invest in AI tools that analyze customer behavior and automate personalized product suggestions, abandoned cart reminders, and post-purchase follow-ups.
4. Create Limited-Time and Exclusive Product Drops
- Why It Works: DNVBs can drive urgency in sales by offering exclusive or limited-edition products that are only available for a short time.
- Actionable Strategy: Announce exclusive drops through email campaigns, SMS notifications, and social media teasers. You can create a countdown timer popup on your site to add urgency. Here is an example of a popup with a countdown timer created with Popupsmart:
5. Encourage Signups with Popups
- Why It Works: DNVBs can grow their customer base by capturing emails through incentive-based popups, promising exclusive content or discounts.
- Example: Casper uses popups that offer a 5% discount on the first order when visitors sign up for their marketing emails. This strategy encourages users to join their mailing list and stay informed about new products and VIP promotions.
- Actionable Strategy: Offer gated content or special promotions through pop-ups that entice users to subscribe. Include language that reinforces the benefits of signing up, such as sneak peeks or exclusive access to new collections.
Challenges Faced by Digitally Native Vertical Brands (DNVBs)
While digitally native vertical brands (DNVBs) offer many advantages, they also come with their share of challenges. Understanding these obstacles is crucial for businesses considering adopting the DNVB model. Let’s explore some of the most significant challenges that DNVBs face:
⚡Rising Customer Acquisition Costs
- Explanation: One of the biggest challenges for DNVBs is the increasing cost of digital advertising. Platforms like Facebook and Google have become more expensive over time, making it harder for brands to achieve the same return on investment as they did in the past.
- Example: Brands that once thrived on low-cost social media ads now find it challenging to maintain profitability without raising product prices or cutting other expenses.
- Tip: To combat rising costs, DNVBs should diversify their marketing channels by investing in organic strategies like SEO, email marketing, and partnerships with micro-influencers.
⚡Supply Chain Management
- Explanation: Full control over production and distribution is a double-edged sword. While it allows for better quality and branding, managing a supply chain can be complex and costly, especially during global disruptions.
- Example: Brands like Casper faced challenges during supply chain disruptions that delayed product launches and shipments, impacting customer satisfaction.
- Tip: DNVBs can mitigate supply chain risks by building relationships with multiple suppliers and investing in local manufacturing options when feasible.
⚡Competition with Established Brands
- Explanation: As DNVBs gain popularity, established brands have adapted by launching their own direct-to-consumer (DTC) channels. These larger brands often have greater resources and existing customer bases, making it difficult for newer DNVBs to compete.
- Example: Nike and other big players have shifted their focus to DTC sales, leveraging their brand power and capital to attract customers who might otherwise choose DNVBs.
- Tip: To stay competitive, DNVBs should focus on what sets them apart—such as unique brand stories, personalized experiences, and niche products.
⚡Scaling Operations
- Explanation: Many DNVBs need help to scale while maintaining the same level of personalized service and brand identity that made them popular in the first place. Expanding too quickly can lead to operational hiccups, customer service issues, and diluted brand values.
- Example: When Warby Parker expanded into physical locations, they had to ensure the in-store experience matched the seamless online experience that their customers had come to expect.
- Tip: Scaling gradually and maintaining a focus on core values and quality is essential for DNVBs. Implementing scalable systems for logistics and customer support can help maintain consistency.
⚡Dependence on Digital Platforms
- Explanation: DNVBs rely heavily on digital platforms for advertising, sales, and customer interaction. Changes in algorithms, platform policies, or privacy regulations (such as Apple’s iOS updates that limit ad tracking) can have a significant impact on their marketing and sales performance.
- Example: The 2021 iOS privacy update affected many DNVBs’ ability to track and retarget ads effectively, leading to reduced ad performance and higher costs.
- Tip: Diversifying sales channels and investing in owned media, such as a brand’s website and email list, can reduce dependence on third-party platforms and create more stability.
Conclusion
Digitally native vertical brands (DNVBs) have reshaped ecommerce with their online-first, direct-to-consumer approach, prioritizing full control over the customer experience and supply chain. Brands like Warby Parker and Glossier highlight that success comes from agility, direct customer connections, and unique value.
As DNVBs face challenges such as rising customer acquisition costs and increased competition, focusing on technology, sustainability, and strong brand storytelling will remain crucial.
Adopting DNVB principles of transparency, data-driven insights, and customer-centric strategies for businesses looking to succeed can create a more connected and future-ready brand.
FAQs About Digitally Native Vertical Brands (DNVBs)
What are the key strategies for a new DNVB to grow?
For new DNVBs, focusing on building a strong brand story, leveraging data-driven marketing, and engaging directly with their target audience is essential.
They should also explore community-building tactics, partner with relevant influencers, and invest in high-quality customer service.
As they scale, incorporating sustainable practices and transparency can help solidify trust and loyalty.
What are the key benefits of running a DNVB?
The main benefits include greater control over branding, customer experience, and supply chain. This control allows for more agile responses to market trends, personalized customer interactions, and often higher profit margins due to the elimination of middlemen.
DNVBs also benefit from direct data collection, enabling them to make data-driven decisions.
Are all direct-to-consumer (DTC) brands considered DNVBs?
No, not all DTC brands are DNVBs. While all DNVBs use a direct-to-consumer approach, the term “digitally native” implies the brand was created online and is built around a digital-first strategy.
Some DTC brands may have initially started as physical stores or use third-party platforms as part of their sales strategy.
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