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Tackling DNVBs for emerging brands and legacy retailers

Tackling DNVBs for emerging brands and legacy retailers

The recent years have seen the emergence of DNVBs or micro-brands; brands that focus on providing a niche product for a niche customer, which is changing the consumer brand landscape completely. These direct-to-consumer micro-brands or DNVBs, also known as v-commerce brands, are spearheading new approaches to retail. These brands have a distinct business model; combining the growth of an e-commerce company with the profit margins of a brand.

These brands control the entire experience - from sourcing and manufacturing to delivering product experiences online (website or social media platforms), thus enabling them to iterate product design and demand and connect with their customers in an authentic manner via micro-targeting.

So what can emerging brands and legacy retailers learn from the DNVBs that are disrupting and taking over the e-commerce environment?

Adopt a data-driven model

Standardized messaging is a big no for DNVB customers. High performing DNVBs invest heavily in collecting and measuring data to improve their communication with their customers. They leverage first, second and third party demographic, behavioral and psychographic to design bespoke digital advertising. This further enables them to understand the messaging that would resonate with the different segments in their target demographic.

Every touch point with a customer is devised to convince and convert. Legacy retailers and emerging brands must leverage data to intersect their demographic and strategically target potential customers.

Design strong product experiences

DNVBs offer customers a buying experience which is as memorable as the product. DNVBs create product experiences that are visual, descriptive and transparent (the product is represented in an image enabling the customer to visualize the product as part of their daily life). Furthermore, they also leverage UGC content and customer reviews to further represent the product ensuring that the customer is well briefed about the product before making a purchase. Emerging brands and legacy retailers must further focus on creating strong product experiences to drive revenue.

For example: For a home decor brand, besides how the product looks like, it is important for the brand to provide details about the materials used,  sourcing of the materials as well as the durability of the product. The product page must mention all these details along with the size, height, frame of the product. Pages that include lookbooks or UGC content further helps the customer to make a better choice.

Build tech with a human touch

DNVBs collect data on every transaction and interaction with customers and leverage this information to better understand their customers and how they behave online. The goal is driven to be relevant, highly personalized, efficient and convenient for the customers.

Traditional or emerging brands, while interacting with their customers, must ensure that their message is personalized. For ex: If the customer in the past has purchased organic, whole wheat pasta, the messaging they could receive could include organic tomatoes or organic arrabbiata sauce they could use for their pasta.

Take the brand experience offline

Digitally native brands understand the importance of brick and mortar and do not restrict themselves to being digital-only. DNVBs often expand to shops through partnerships with third-party retailers, pop-up stores or by creating their own physical locations. Moreover, these locations are heavily marketed by influencers, with strategic content as well as promotional offers. They ultimately expand from a digital-only space but without sacrificing their brand or customer experience.

Most e-commerce companies are heavily focused on distributing other brands' goods and competing with e-commerce giants like Amazon, Walmart, and Alibaba while DNVBs are paving the way for a new retail experience with technology, social sharing and being perceptive to the shifts in consumer buying behavior.


Consumers are increasingly demanding informative and convenient product experiences across every sales channel and with more DNVBs coming into the market, expanding their presence beyond digital channels to brick and mortar stores, it is imperative for traditional brands to take inspiration from the DNVBs and adapt their business models to the changing consumer trends. Brands that can not only meet these expectations but also deliver on it will be the most successful in the digital space.

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The Rise of Digitally Native Vertical Brands (DNVBs)

The Rise of Digitally Native Vertical Brands (DNVBs)


In the past, brands that dominated supply chains, dominated the markets share in their category. P&G, Unilever are brands who owned their categories for the past few decades. With the shift towards digital, there was a rise in direct-to-consumer brands called Digitally Native Vertical Brands or DNVBs.

What is DNVB? A brand that is digitally native, vertically integrated company that sells its own products and controls its own distribution via the web maintaining a strong focus on customer experience. While the DNVB starts online, it often uses a brick-and-mortar strategy. This term was made popular by Andy Dunn, founder of a famous online-first brand, Bonobos.

DNVBs have been shaping a new Retail landscape in the US, building competitive advantages and differentiators enabling them to not only compete with well-established brick-and-mortar businesses but also leading e-commerce businesses making a huge impact on what consumers expect from brands. Some of the DNVBs include Blue Apron Inc., Casper, Dollar Shave Club, and Home Chef.

Let’s take a deeper look into three growth strategies of these brands that proved successful:

Personalization in products 

The product offerings in DNVBs are truly unique to each buyer, and these brands take time to craft experiences based on the specific user taking into account their needs, preferences, and behavior.
For instance, Blue Apron takes into account the preferences of the customer and with this information, provides custom meal options that would suit that customer’s need and likes, giving the customer a personalized brand experience.

Customized products require a lot of information and attention to details which requires a different supply chain that big e-commerce companies like Amazon are yet to provide. This provides DNVBs an edge within a cut-throat, competitive ecosystem.

Vertical integration

A brand that sells directly to customers combines multiple benefits - lower cost of online sales, better control of the whole supply chain from manufacturing to distribution.

A great example of vertical integration is Everlane, a web-only clothing brand that compares its own pricing to that of traditional retailers and is able to share with its customers its cost break down as they know their supply chain.

Tech roots

DNVBs are more like tech companies rather than retailers as they build their own retail technology to sell better. It further enables them to track customer interactions, manage inventory, offer store credit, gather feedback to improve data curation, etc.

This user-centric and data-centric approach of DNVBs emphasizes all the steps of the user journey, from pre-purchase to post-purchase experience. This helps meet customer experience and generate loyalty while still offering them a highly personalized experience depending on location, customer behavior, purchase history, etc.

Web-only brands have often become frequent acquisition targets, not only because of the products they sell, but also because of the talent and technology they bring to the traditional retail structures leading to  deals like Unilever’s one-billion-dollar for Dollar Shave Club. Another strategy that retail applies in order to avoid the downsides of an acquisition is to take part in the funding of startups of web-only brands such as Target and $170 million dollar series C led by Casper.

While all the retail companies are leaning towards technology to find new ways to innovate and change the customer experience, a factor that web-only brands or DNVBs heavily rely upon is to scale as well as the ability to attract and retain talents. This is something that traditional retail organizations are yet to tap into completely. 

The retail industry has never been as competitive as today, with three e-commerce giants Amazon, Walmart, and Alibaba taking the large chunk of the e-commerce revenue as well as the technological acceleration being this quick. Among all the retail players, a new category of business is on the rise, disrupting the industry.

Stay tuned to see what must traditional brands do, to keep pace and compete with DNVBs.

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