Whilst many brands are developing physical stores, two retail models stand out, at odds from each other. Traditional “retailers” are typically characterised by a large sales area and an array of stores to win customers. On the other hand, new ‘digital native’ brands are creating fast-moving models based on online ‘communities’ of customers, winning a much higher profit margin. What can we learn from the rise of ‘digital native’ brands?
We describe these new businesses as ‘Digital Native Vertical Brands’ (or DNVB). They are created online to connect directly to customers, without going through distribution networks they cannot control. They embed social networks at their fingertips and include strong images in stores. They eliminate expensive intermediaries without operating within a low-cost model. In the fashion sector, examples are Boohoo and Mahabis (U.K.), Revolve, Toms, Bonobos, Everlane and Reformation in the US and...
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