Being the most disruptive kid in class was bad when you were a child. We never imagined that years later, we would all be striving to be the most disruptive child on the block.
Digitally native vertical brands (DNVBs), are among the most innovative, disruptive and rapidly-growing businesses in the world. They grow at a rate that is three times higher than other e-commerce companies.
Investors are also attracted to them. In 2020, DNVBs accounted for 15% of all new unicorns, an increase of 5% over the previous year.
In other words, DNVBs have been on the rise and are doing exceptionally well.
If you are a smart person and want to start a business with this model, you will find the best examples of digitally native vertical brands you can study.
What is a Digitally Native Vertical brand?
Two main elements make a company a digitally-native vertical brand.
Being digitally native is the first thing that means the brand was founded online and does its business online. However, it is not likely that the brand will expand into brick and mortar in the future.
The brand’s vertical integration is reflected in the title’s vertical portion. The brand controls every aspect of the customer journey and product design, production, sales, and distribution.
A digitally native vertical brand, on the other hand, is a company which designs and creates its products and then sells them to customers via its website.
7 Digitally Native Vertical Brands That Are Killers
1. Warby Parker
5. Get Away
1. Warby Parker
A well-functioning supply chain is one of the key reasons DNVBs are able to do so well. They reduce costs by eliminating the middleman.
They are responsible for the entire product’s journey, from the moment it is manufactured at a factory until it reaches its destination. This allows DNVBs to bring products to market at a cheaper price than their competitors.
This is how Warby Parker was founded. The founders of Warby Parker realized that only one company could control the market for eyewear. It kept prices high, and laughed all the way to bankruptcy.
Warby Parker decided to be different. “By bypassing traditional channels, designing glasses in house, and engaging directly with customers, we are able to offer better-quality, more attractive prescription eyewear at a fraction the price.”
Warby Parker is able to communicate with customers about how it designs and creates its eyewear.
Customers love the brand’s transparency and care. This type of business model is the only way to achieve it.
You will need to assume production in order to replicate the success of Warby Parker or other DNVBs. This could mean buying out factories or setting up a new factory. You can then take control, create quality products and enjoy higher margins.
DNVBs rely upon simplicity. They begin by focusing their attention on one product in an industry they feel needs to be improved. They want to make that product stand out from the rest and offer unique selling points (USPs), that no one else has thought of.
Casper is an example of this. Casper began with one mattress, which it then made and sold online in six sizes.
Casper’s USP was their 100-day guarantee. This made them extremely popular. This offer was created to counter the industry norm of “if you test a mattress for two minutes while you are awake, you will find the best long-term bed for you.”
Casper’s approach to starting a successful DNVB is to start with the customer and provide a superior experience. Casper earned $1 million its first 28 days on the basis of this principle.
The paradox of choice can be eliminated by starting small. This theory states that if a customer has too many options, they are more likely to give up and choose not to make a decision.
Start with one product, or a single line of products. Later, you can add more products or cross-sell related products. Casper does this now.
The mattress company now offers a wide range of bedding and frames.
To gain momentum early, new DNVBs often use “growth hacking”. It’s the attempt by startups to quickly achieve large growth while keeping a low budget.
In the beginning stages of their growth hacking efforts, Harry’s Shaving Company has had tremendous success. It created a social media campaign using teasers and other intrigues to drive traffic to its landing page before launching.
The people were then encouraged to refer others through a tiered reward system.
Referring five people earned them a free shave lotion. If they refer 50 people, they get one year of free razor blades. The rewards are increasing in value.
This is a smart way to generate buzz and create an email list you can use to build customer loyalty, and sell more. Harry’s was so impressed by this tactic that 77% of the email subscribers to their initial campaign were referred by others.
Incentivised referrals are a great way to get started in growth hacking. Another option is to create viral content by partnering up with influencers and online publications that appeal to your target audience.
DNVBs are distinguished from other e-commerce sites by their superior customer service.
DNVBs are able to monitor and control every customer touchpoint. This makes it easy to keep the experience consistent. Experience-driven brands report an increase of 1.6x to 1.9% in repeat purchases, customer retention, average order values, customer lifetime value, and customer retention year-over-year.
Bonobos is one the most loved DNVBs. Andy Dunn, the founder of Bonobos, wrote in 2016 about how he was “maniacally focused upon the customer experience” and how this drives closer relationships with customers than any other DNVBs.
Bonobos can capture so many data during the customer journey that they are able offer a better product as well as better service. This includes a wide range of sizes and fits.
There are even so-called Guideshops that customers can visit for an in-person shopping experience.
DNVBs are able and do expand to brick and mortar stores later on in their lives. Bonobos Guides are responsible for collecting all information about the customers, including their style and measurements. They deliver the products to their home. This is a great addition to an e-commerce shop and a unique way to put the customer first.
5. Get Away
The DNVB model can be used to enhance the user experience, right down to product design. It’s not about marketing a product, but making it better.
Away, a luggage company, does this by listening to its customers. The brand developed a prototype for their first piece luggage and then conducted user testing, focus groups, surveys, and other research to refine it.
They were able to add or remove features according to user needs. There are many useful features in the products that make customers’ lives easier. For example, a laundry bag you can put inside the suitcase.
This is the moral of the story: Focus on your target audience to determine what they want from a product or service in your chosen industry.
You can distinguish your product from the rest by conducting thorough customer research. Away’s customers love Away and this is evident in their testimonials. Everything is perfect, from the thoughtfully designed products to the customer support team that goes above and beyond, it’s everything I would want.
We know that there are no coincidences, even though the customer may not realize it. Because it was designed that way, everything is exactly what the customer wants.
Most DNVBs have a set of carefully planned brand values they take seriously. This allows customers to build trust and establish connections.
Glossier, a cosmetics company, has done a great job in this regard. This company wanted to change the way that beauty was done traditionally in order to keep up with current trends and perspectives.
People became tired of being told what to do or how to disguise imperfections. People began to see makeup as a creative outlet. These ideas inspired Glossier to create beauty products from scratch. They have become cult favorite products. They only offer a limited range of products, but they are experts in a handful of key items.
The company promotes minimalism through products that enhance, not hide beauty. These brand values can be seen throughout their content.
Their motto was “Skin first, make-up second”. This is what you can do if your brand has a clear vision of what it stands for and what customers are most passionate about.
However, you must always put your money where it matters. If you are going to build genuine relationships with your customers, then you need to talk about the brand’s values.
E-commerce is booming and there’s increasing competition. Customers also expect more.
In fact, 73% of customer service professionals believe customer expectations are rising, and only 42% think they’re meeting them.
Good news: DNVBs may also have an advantage.
You can see that the business model gives them an advantage over their competitors and exceeds customer expectations. DNVBs’ success is greatly influenced by their ability to customize offerings for customers. They stand out by offering customization options that allow customers to get exactly what they want.
Burrow, an online furniture retailer, sells modular pieces that can be assembled in “unlimited configurations”.
Customers can design and order furniture online, and get it delivered free of charge. It is a fun and unique customer experience.
It’s possible to sell, distribute, and make products as customers wish if you run a DNVB.
You must be cautious. It is not a good idea to complicate things for customers. When it comes to customizing, you should start small.
Vertical brands that are digitally native have a common core business model and similar strategies to succeed, even though their products and principles may be different.
These are the core threads that run through these amazing digitally native vertical brands:
Refresh an industry or product that is outdated and make it more appealing to customers. Create a 10x superior product and a 10x greater customer experience than everyone else. Keep it simple and focus on one thing. Then expand later. Understand your customers.
Are you unsure where to begin? Start by doing customer research to determine how you can best serve your target audience using a DNVB.
Sleeknote’s 7 Digitally Native Vertical Brand Examples That You Must See appeared first on Sleeknote
By: Emil Kristensen
Title: 7 Digitally Native Vertical Brand Examples You Need to See
Sourced From: sleeknote.com/blog/digitally-native-vertical-brand-examples
Published Date: Tue, 01 Mar 2022 12:24:35 +0000
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