Why should Marketers care about Allbirds, Casper and other DNVBs?

18/02/2019

Another year, another acronym. As a marketer, why should I care? And what on earth is a DNVB?

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Let’s take the second question first. Andy Dunn is an American entrepreneur. He’s the one you need to thank, both for those well-cut suits created by his menswear brand Bonobo and the abbreviation of DNVB. His definition?

“Digitally native vertical brands are maniacally focused on the customer experience and how they interact, transact, and story-tell to consumers primarily on the web.”

In other words, there are web-only brands delivering seamless customer experiences, and do so despite operating within narrow sales verticals. But how do they do it?

They take control: They are 100% in charge of production, marketing and distribution. They also continually mine their sales and search data, leverage social feeds and influencers, alongside CRM data for insights. All of this data focuses on delivering unique content and products to their audience.

So, if that’s the concept, what’s the reality?

Go to Instagram. Or even better, ask to look at a feed for a millennial (asking their permission of course). On that feed, you will find yourself scrolling past dozens of sponsored ads for brands that you have probably never heard of. Many of them are beautifully shot, nicely branded, and promise to revolutionise your life:

Delivering dreams to your door.” Casper

World’s Most Comfortable Shoes.” Allbirds

A people-powered beauty ecosystem.” Glossier

These are ambitious brand promises, especially as they’re trying to fulfill these promises whilst having no bricks-and-mortar stores. All traffic is digital. All interaction is online. But being digital has one huge advantage for these brands: They can scale quickly without the cost of physical expansion. This means more resource being put into customisation as well as lower costs. All of this helps the DNVB to be a new breed of e-commerce animal.

Now to answer my first question — why should I care as a mainstream marketer?

You know how coal miners used to take canaries down into the mines with them? Doing so allowed the miners to test for poisonous gases and the small lung capacity of canaries meant they acted as an early warning system. The moment the bird fell silent, the miners would know it was time to leave.

This is why we are talking about DNVBs. The bird has stopped tweeting.

In the past, marketers and agencies have focused on direct competitors to understand how we should adapt our approach. Not only do we need to look in different places, we need to adapt our behaviour to stay ahead of the curve. Otherwise we risk being overtaken before we even know there is a race. Your very survival as a marketer depends on it.

DNVBs are the miners who have already adapted to the change in their ecosystem. They have recognised the change and the opportunities, finding a profit-generating niche. In fact, what we are seeing is DNVBs growing at a rate of 44% vs 16%, significantly higher than the U.S. e-commerce market.

This is why their growth is so strong:

· Amazon insulation: DNVBs can create unique products and connect with niche audiences that insulate them from Amazon and other big retailers.

· Pricing: Their direct-to-consumer model means that they can keep their prices more affordable than brands that use traditional sales channels.

· Organisational structure: There are no silos. Being digital only means the whole business has a single-minded focus.

Of course, as well as these points, its DNVBs’ understanding of their audience that makes them truly standout.

Their ability to use ecommerce tools and mine data is head-and-shoulders above their more traditional competitors. They have a more comprehensive overview of consumer data; from social media usage to website visits. They have newer tools, expert teams, and they also have more engaged customers. Customers can be assured that if they comment on an Instagram post or add a review on YouTube, the brand will respond.

Some DNVBs like the makeup brand Glossier are even taking this further including users in product development, organising events for their communities. They have even used a Slack channel to gather regular feedback.

So finally, as a marketer, how can you capitalise on this change?

1. Competition. They are the competition that you won’t see coming unless you know where to look.

2. Steal with pride. Buy in the same tools and expertise in digital and data that these guys have.

3. Audience dialogue. Rather than reading reports and presentations, talk and listen to your audience directly, and make decisions based on those interactions

4. Growth. 44% sales growth. Who wouldn’t care about those figures?

DNVBs to look out for:

  • Allbirds — Shoes
  • Blue Apron — Home foot kits
  • Bonobos — Menswear
  • Casper — Mattresses
  • Glossier — Make up
  • Harrys — Shaving
  • Proper cloth — Bespoke clothes
  • Rad Power — Bicycles

 

Dan Friel is Global Client Lead at Carat

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