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What’s the difference between digitally native virtual brands (DNVBs) and direct-to-consumer (DTC) brands and, can either of them turn a profit?

2 min read

Digitally native virtual brands (DNVBs) and direct-to-consumer (DTC) brands are two business models that have emerged in the digital age. Both involve selling products directly to consumers without the use of traditional intermediaries such as wholesalers or brick-and-mortar retail stores. However, there are some key differences between the two models.

DNVBs are brands that are born and operate exclusively online. They often rely on social media and other digital channels to build brand awareness and drive sales. DNVBs often have a narrow product range and are highly focused on a specific market segment or niche. Examples of DNVBs include Casper and Chewy.

On the other hand, DTC brands are brands that have traditionally sold their products through intermediaries, such as retailers or wholesalers, but have now begun to sell directly to consumers online. DTC brands may have a wider product range and a more diverse customer base than DNVBs. By definition, a DNVB brand is DTC, but not all DTC brands are DNVBs. An example of a DTC brand that is not DNVB is Nike – whose shift away from distribution at Foot Locker in 2022 emphasized their commitment to DTC.

Both DNVBs and DTC brands have the potential to be profitable. DNVBs have the advantage of being able to reach a global market from day one and having complete control over the customer experience. However, they may face challenges in terms of building brand awareness and competing with established brands. We are starting to see some consolidation in the DNVB market that may bring easier brand awareness and more customers. For example, see Full Beauty Brands’ recent acquisition of CUUP, which creating intimates that are made to accentuate consumers’ natural form, and ELOQUII, a digitally native vertical brand that offers size-inclusive fashion and on-trend apparel, which will join the FullBeauty portfolio of brands. 

DTC brands, on the other hand, may have an easier time building brand awareness as they may already have a customer base through their traditional channels. However, they may face challenges in terms of shifting their business model and adapting to the demands of the digital market.

To be profitable, both DNVBs and DTC brands need to be able to effectively reach and engage their target audience, offer high-quality products at competitive prices, and have a solid marketing and customer service strategy. Both models also require a strong online presence, including a well-designed website and a presence on social media and other digital channels.

Ultimately, whether a DNVB or DTC brand is profitable will depend on a variety of factors, including the market demand for their products, their brand positioning, and their ability to effectively reach and engage their target audience. Both models have the potential to be successful, but it is important for businesses to carefully consider their unique challenges and opportunities before deciding which model is right for them.

At XY Retail, we offer a comprehensive platform that empowers DNVBs and DTC brands, as well as omnichannel retailers, to effectively reach their target audience, optimize their online presence, and streamline their operations for sustainable growth in the digital age.

Contact us today to learn more about how we can help you stay ahead in the competitive world of retail.