Anticipated by some and dreaded by others, the “death of retail” has been long talked about, and is slowly taking place before our (technology distracted) eyes. Heralded as both the killer and eventual successor of traditional retail, online sales have skyrocketed over the last decade. Changing demographics of shoppers and pressure from Amazon has crumbled the foundation of retail as we once knew it. Those that climb out of the figurative rubble must innovate, and learn how to operate in coexistence with Amazon.

During this slow shift in traditional retail, there has also been a shift in the startup world. In competition with an ever-growing Amazon, startup e-commerce businesses fight to create a unique brand and scramble to keep competitive pricing on a per unit basis.

Enter the Digitally Native Vertical Brand (DNVB). A digitally native brand is a business that mainly connects, interacts, and performs transactions with customers online. A Digitally Native Vertical Brand is a digitally native brand that controls and brands it’s a product from production to sale. This enables the business to customize and maintain a unique product, and associate that value with their single brand.

This model has already proven successful. A few Digitally Native Vertical Brands you’re probably familiar with: Casper, Bonobos, Warby Parker, and Glossier, just to name a few. In 2017, the top 75 DNVBs grew by 44%, or about 3x the growth of an average e-commerce store.

Digitally Native Vertical Brands are real retailers that use the web as their storefront. These businesses are selling and creating real products, with high margins. They are able to target unique demographics, across large areas, and more efficiently manage customer experiences by leveraging their online business data.  

A direct to consumer sales model makes customer data collection easy. A business that conducts the majority of customer interactions online can collect a treasure trove of information on all parts of their sales model. With the proper data analytics tools, like the platform we are building at Dinote, a digitally native brand can make more informed decisions.

Millennials are now doing almost 60% of their shopping online, and DNVBs are poised to capture a large portion of this online spending. This new class of retailer has the figurative best of both worlds. They are more than just a page of products using a platform as a sales channel. They are more than a physical storefront limited by a small surrounding market, high overhead, and lack of data. Digitally Native Vertical brands are the future of retail.

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