As ecommerce sales grow, brands are looking for new avenues to beat their competition. One such strategy is starting your brand as an online-only entity and selling directly to consumers, cutting out the middleman. This strategy is known as a digitally native vertical brand (DNVB).

What is a DNVB?

DNVBs are brands that either currently sell or formerly sold goods or services directly to customers exclusively through ecommerce channels, bypassing traditional intermediaries and often relying heavily on digital marketing.

By leveraging technology, data-driven insights, and a direct-to-consumer (D2C) approach, DNVBs aim to deliver personalized experiences, fostering strong customer relationships while often maintaining tight control over manufacturing processes, autonomy over the final product, and oversight of customer service.

The benefits of DNVBs for marketers and ecommerce retailers

The digital boom of 2020 propelled digitally native vertical brands (DNVBs). The pandemic accelerated ecommerce growth, creating a bigger market for D2C brands to claim, while concerns about relying on Amazon gave rise to ecommerce enablement platforms—such as Shopify and social media channels—that democratized the purchasing funnel. Several DNVBs have created durable, category-defining companies, such as Warby Parker and Brooklinen.

Digitally native vertical brands have used D2C strategies that cut out intermediaries and distribution partners to reach niche audiences. Highly measurable, targeted digital ads—largely in search and social—reach those who are most likely to purchase from the brand, driving sales on their owned and operated channels. DNVBs’ skilled use of influencers has helped them build brand affinity and sales.

DNVBs often offer easy-to-use customer experiences on websites, checkouts, convenient returns, and post-purchase communication that more established brands don’t airways deliver.

  • Want to learn more about DNVBs and other retail trends? .

Examples of DNVBs

DNVBs skew heavily toward fashion and apparel. Looking more broadly at all D2C companies, fashion stands out as the dominant category, with an overwhelming 92.7% share of the D2C industry as of 2019, according to analysis from PipeCandy.

Some examples of the most popular DNVBs include:

  • Allbirds – footwear and apparel
  • BarkBox – monthly subscription dog products
  • Brooklinen – luxury bedding products
  • Bonobos – menswear
  • Carvana – used car retailer
  • Casper – mattresses and sleep products
  • Chewy – pet food and pet-related products
  • Dollar Shave Club – razors and grooming products
  • Glossier – makeup and skincare products
  • Indochino – menswear
  • JustFab – membership fashion retailer
  • Magic Spoon – cereal brand
  • Mejuri – jewelry
  • Outdoor Voices – activewear
  • Peloton – exercise equipment and media company
  • Reformation – women’s clothing and accessories
  • Rothy’s – shoes and accessories
  • SmileDirectClub – teledentistry company
  • Warby Parker – prescription eyewear

What marketers and commerce professionals need to know about DNVBs

DNVB ecommerce sales are growing steadily, but many of the individual brands still struggle with supply chain issues, changes to Apple’s iOS resulting in limited ad personalization and performance reporting, and the rising cost of digital ads.

  • Although mature DNVBs like Dollar Shave Club, Casper, and HelloFresh were torchbearers for the D2C movement, established brands now command the space, driving nearly 80% of D2C ecommerce sales in 2024, per ĢAV’s US D2C Ecommerce Forecast 2024 report.

The difference between DNVBs and D2C

Direct-to-consumer, commonly referred to as D2C, is a sales model that removesthe need for third-party manufacturers, wholesalers, retailers, and distributors to sell directly to customers.

  • DNVBs use the D2C strategy by cutting out the middlemen and selling their products to customers directly, allowing the brands to offer competitive pricing while maintaining higher profit margins.
  • While all DNVBs are D2C, not all D2C businesses are DNVBs.

DNVBs versus established brands

“DNVBs are brands started in 2010 or later that began by selling their products directly to consumers through ecommerce channels, often relying heavily on digital marketing. Established brands are the incumbents—the mass-market brands being disrupted by DNVBs—that are now adopting D2C strategies to improve their business fortunes,” according to ĢAV analyst Andrew Lipsman. Established brands like Nike and lululemon athletica have adopted the D2C playbook from digital natives like Dollar Shave Club and Warby Parker with greater momentum.

Established brands can learn from their DNVB competitors. Product research and development and innovation cycles at large established brands have often followed multiyear cycles, which don’t always produce what the customer needs or wants.

This approach can lead to scenarios like Gillette’s addition of blades to razors at rising costs, which has left the established brand vulnerable to new contenders like Dollar Shave Club. Staying current with consumer trends and comprehending the difference between essential and unnecessary products are .

DNVB obstacles

While DNVBs might have initially led ecommerce competition, they are no longer the primary drivers of D2C ecommerce sales and will only make up less than 20% of sales for the next two years. Instead, established brands are propelling the category’s sales growth, responsible for nearly 80% of 2024 D2C ecommerce sales in the US, . As DNVBs grapple with challenges in their expansion and experience a dip in ecommerce sales, established brands’ sales will rise 9.5% in 2024, per May 2024 ĢAV data.

DNVB ecommerce growth has stagnated because DNVBs are competing with established brands and their bigger budgets. They’re also facing a more difficult path for growth due to rising ad costs making customer acquisition more expensive compared to the pandemic.

This article has been updated. Original was posted October 19, 2023.