A VC expert explains why companies like Casper, Bonobos, and Glossier will continue to thrive against tech giants like Amazon KauffmanFellows
. In a future where mass merchants like Amazon become the Walmart of the internet , how will DNVBs differentiate themselves? I believe they have a few distinct advantages that allow them not only to compete with but also thrive in the face of the tech giant.Traditional retail models incur huge middlemen costs, which in turn causes the product to often be significantly marked up by both the distributor and the retailer.
will need to make up for the loss in value that a distributor traditionally provides — and many DNVBs have found interesting ways to do so. Some may augment customer service beyond the general FAQ or help desk. For example, Casper offers 100-day free returns and Allbirds offers a 30-day trial — a highly uncommon move for a shoe company.
One of the most visceral ways of connecting with consumers is through stories. As humans, we adore the narratives that encompass our beliefs and ideals. DNVBs are exceptionally good at storytelling because that's exactly how they're born.— a message that young women deeply connected with. Likewise, Glossier would not have discovered this insight had they not been born on the internet. Customers view brands as an extension of their personalities and the embodiment of their aspirations.
This growth strategy is precisely what allows paid acquisition to become scalable through network effects. For traditional retail channels, companies have to continue to pay fixed costs for shelf space over the lifetime of the business, while a DNVB can see their customer acquisition costs go down to the point where some of these brands can achieve
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