What Retailers Can Learn From Digitally-Native Brands

You see them everywhere, and yet they came seemingly from nowhere. The ubiquitous Warby Parker frames. The chic Everlane tees. The new way to sleep by Casper. These newly established brands are becoming ecommerce juggernauts in the span of a few years.

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What have they done to get here? These companies aggressively define their brands via social media, obsess over product and customer experience, and redefine Direct-to-Consumer retail by cutting out the middlemen (both in the supply chain and retail presence). Is there a buzzword for these kinds of companies? Of course there is. They’re Digitally-Native Vertical Brands (DNVB’s), a term coined by Andy Dunn, founder of Bonobos.

These brands are uniquely positioned to win the future. If you want a bigger piece of that pie, here are some things to learn from retail’s next graduating class.

A Bolder Voice

DVNB’s differentiate themselves by driving awareness and engagement through social media. The rationale is simple. Younger consumers buy from brands with which they identify. 62% of Millennials say that online content drives loyalty to a brand, according to a MBC Research study cited by Newscred (warning: pdf.)

A great place for inspiration is Everlane. The clothing retailer makes high-end basics at prices closer to J-Crew than Club Monaco. Everlane’s social media team looks to drive community, with the expectation that sales will come. That’s why they live by their oft-repeated mantra: radical transparency. Everlane is upfront about pricing and the manufacturing process. They breakdown what things cost to make, and what their markup is. Their “100% Human” line, which gave $5 from each sale to the ACLU, has sold out several times since being introduced.

What are the lessons here? That younger audiences care more about what you stand for, your authentic purpose. That social media, by putting you right next to their friends and family, can create loyalty. And ultimately, authenticity and loyalty can drive amazing growth.

A Modern Customer Experience

Warby Parker makes great glasses, certainly. But their secret sauce is the robust, multifaceted customer experience they’ve created, from digital to the home.

The Harvard Business Review says customers spend 140% more on a brand with which they’ve had a positive experience. They’ve also found that a positive experience reduces how much a brand has to spend to retain that customer, driving loyalty. So Warby’s relentless focus on the end-to-end customer experience pays big dividends throughout the customer lifecycle.

Warby Parker has worked to nix many of the phobias and pain points associated with shopping for glasses online. Want to try them on? They’ll ship you five frames for free. Want to know which one looks best? Take some selfies and reach out via Instagram. Their employees monitor #WarbyHomeTryOn, and frequently respond to posts with the company account.

Two big takeaways: build the business and brand around the customer first, not a spreadsheet. Leverage mobile and social tools for customer service to erase distance and build relationships.

A Better Product

You might have great customer support, but if your product doesn’t offer real advantages over established brands, everything else falls flat. Being vertically integrated has given DNVB’s a greater level of control over (and responsibility for) their product.

How has this played out? Let’s take a quick tour.

Warby Parker made quality, fashionable glasses at non-obscene prices.
Everlane made luxury basics affordable.
Harry’s made razors at reasonable prices.
Bonobos made pants that actually fit.

At Zemoga, we understand that vertical integration is a huge endeavor, and may not be right for all businesses. These brands have made it an integral part of their identities, while allowing them to compete on price and quality. At the very least, examine where vertical integration can make sense, including how to prioritize and integrate digital to bricks and mortar experiences.

The Next Step

The next step is simple: get ideas. What makes sense for you? How do you ingest some of this magic and make it your own? Do you need to optimize your product so users gush about it on social? Do you need to rethink your UX so that it’s Warby Parker-level easy?

Zemoga’s design, product, and UX leadership can help you explore opportunities in the new world of digital-first retail. Let’s start the conversation.