How DNVBs Are Winning Customers and Redefining Retail
Posted by Marcus LaRobardiere on Nov 27, 2018
Deliver modern, mobile-first shopping experiences that delight your customers. Drive ROI back to your business across all customer touchpoints—in-store, online, and on mobile. Book a time with our team to learn how we can help transform your business with our omnichannel solutions.
*Privacy Notice: By hitting "Submit," I acknowledge receipt of the NewStore Privacy Policy.
Digital Native Vertical Brands (DNVB) are a product of today’s technology-first universe. These brands start as entirely online companies before expanding into brick-and-mortar. Interestingly, this trajectory contradicts what we were led to believe when e-commerce emerged, namely that brick-and-mortar would become a shopping medium of the past.
So, how are these brands reshaping the way we think about shopping channels, specifically the relationship between e-commerce and brick-and-mortar? Let’s examine what drives these businesses, and why they represent a glimpse into the future of retail.
DNVBs are brands that leverage e-commerce to sell to consumers, while directly controlling their distribution. Typically, DNVBs start as digital entities but most quickly broaden their operations to include storefronts. What’s notable about DNVBs isn’t their expansion into physical retail or the path they’re forging in our digitally-saturated world. Instead, it’s their diverse way of using storytelling, branding, and technology in their physical stores to win and retain customers.
Brands like Away, Allbirds, Outdoor Voices, UNTUCKit, Casper, Warby Parker, and Glossier are all examples of DNVBs disrupting the retail industry and creating a value proposition unlike any other. What is it that makes these brands so incredibly good at what they do — i.e. sell stuff people really want to buy?
“Glossier is really for anyone who wants to embrace the present and live in the now. It’s about embracing constant change and who you are at any given moment, and that’s often someone who’s imperfect – and that’s cool.” – Emily Weiss, Founder, Glossier
DNVBs are superstars when it comes to brand storytelling. Take Away (luggage), which has mastered how to authentically connect with its customers in direct and indirect ways. Here is Away’s travel magazine – it is its own domain, but is a natural extension of the core brand. Here doesn’t splash Away luggage images across its pages. Instead, the magazine is a key tactic for market penetration, forcing readers to draw an association between travel, luggage, and Away.
We saw something similar with Emily Weiss’s makeup company Glossier, which was born out of her blog Into the Gloss. Emily is a social media guru, and she used social media to create an enormous following of makeup enthusiasts enamored of her story and personality. To say Glossier is a success is an understatement, considering it does more business per-square-foot in its flagship location than Apple stores.
Storytelling is paramount to other DNVBs as well. Outdoor Voices is redefining outdoor fashion using engrossing pictures and social media storytelling. UNTUCKit launched using an anti-establishment pro-establishment mix to sell dress shirts for non-dress occasions. In short, DNVBs are influencing the buyer journey by including digital branding at every turn.
“I don’t think retail is dead. Mediocre retail experiences are dead.” – Neil Blumenthal, Co-founder, Warby Parker
Once DNVBs have nailed their story, stormed social media, and dominated e-commerce, we see them navigate to physical retail. This trend is usually followed by innovative uses of in-store technology to give them a leg up over their competition.
While studies show 55% of retail employees don’t have access to their store’s inventory, this isn’t as much of a problem for DNVBs as it is for other brands. Because of the focus on ‘vertical,’ DNVBs have more control over all channels of their inventory and production.
Of course, DNVBs started digitally, so digital in-store applications are not surprising.
Glossier’s flagship location opened its doors with omnichannel tablets to ensure a seamless customer experience. By building tech like an omnichannel POS, it was able to fluidly move products from its warehouses to its storerooms. Glossier also utilizes buy-online-pick-up in-store (BOPIS) options. This is a near necessity for today’s brands since 92% of customers are likely to be repeat buyers if there are smooth pick-up and return processes.
“Our message has always transcended borders and cultures and is central to who we are as a brand.” – Emily Weiss, Founder, Glossier
Perhaps the most important lesson we’ve learned from the rise of DNVBs is that having a consistent image is critical to growth. When we look at companies like Glossier, whose blog, social media platforms, and stores are all pink everything, or, Away, which is maximizing minimalism and negative space to create boldness, we see how prominently experience pulls through in design.
Customers want to connect with your brand, especially in an age where social media has grown to a staggering 3.1 billion users. Having a clean image that’s brandable and identifiable will push customers toward you and safeguard you against price fluxes and commerce fractures.
“[…] for over a hundred years a few players controlled virtually all the supply and distribution in this category and chose not to innovate or really think about the customer experience…once their eyes are opened to access and transparency and real product innovation and consumer-centricity, it’s inevitable.” – Jeff Brooks, CMO, Casper
If there’s one thing we should all take away from the rise of DNVBs, it’s that multichannel retail is the future. Brick-and-mortar isn’t on its way out. It’s still a critical commerce structure, but it shouldn’t be your only one. Customers want the flexibility to buy something online and pick it up in-store, without having to wait for shipping. People want more options.
Research backs this up. In fact, businesses that adopt omnichannel have 91% better customer retention rates, year-over-year.
DNVBs represent a new model of success in retail. By utilizing storytelling and branding, in-store technologies, and omnichannel solutions, retailers can positively change their organization. So, get out there and start growth hacking to create better omnichannel customer experiences.
Want to see the omnichannel capabilities of 150 of the world’s top and most iconic brands? Check this out!
