Digital transformation has profoundly shaped how brands operate and interact with their consumers. But selling products isn’t enough. To grow in the long term, these brands need to create digital ecosystems with additional services and experiences.
DNVBs (Digitally Native Vertical Brands) have emerged as an innovative business model. They are redefining retail by eliminating intermediaries and creating direct connections with their customers. However, to ensure sustainability and long-term growth, these brands need to go beyond selling products and build a robust digital ecosystem that includes services and additional experiences.
I know this from experience. When I created Elemento Kimonos, my DNVB of premium kimonos for Jiu-Jitsu, I realized that selling a good product wasn’t enough. Customers wanted more: they wanted content, support, and a differentiated experience. That’s how I started expanding the business, building an ecosystem that involves everything from personalization to educational content about the sport.
This essay analyzes how DNVBs are building digital ecosystems by integrating services into their business models and exploring successful strategies, challenges, and opportunities within this dynamic market.
The Concept of DNVBs and the Evolution of the Business Model
DNVBs are companies born in the digital environment that control the entire value chain, from production to distribution.
They use technology to optimize shopping experiences, reduce operating costs, and offer a closer relationship with the consumer (Ryan, 2020). These brands have gained popularity due to their agile approach and ability to build loyal communities around their products (Gielens & Steenkamp, 2019).
Historically, DNVBs started as players focused exclusively on selling products, but the need for differentiation and increased customer lifetime value (LTV) led to expanding their scope, including digital services, personalized support, and integration with physical experiences (Danziger, 2021).
In the International Portfolio Method (MCI), my mentorship for professionals to digitize and dollarize their careers, I realized that it wasn’t enough to sell a course. It was necessary to create an active community and offer exclusive content and tools that would facilitate the process. That’s the true value of a digital ecosystem.
The Importance of a Digital Ecosystem
Building a digital ecosystem allows DNVBs to create recurring revenue streams, increase customer retention, and differentiate their offerings. Companies like Warby Parker and Glossier exemplify this trend by adding services such as online vision exams and personalized beauty consulting, respectively (Forbes, 2022).
According to a study by Kotler & Keller (2021), a well-structured digital ecosystem not only boosts sales but also improves brand perception, promoting a stronger relationship with the target audience.
Key Elements in Building a Digital Ecosystem
1. Personalization and Customer Experience
Personalization is at the heart of DNVB’s strategy. Based on data analysis and machine learning, it is possible to predict preferences and create individualized experiences. Nike, for example, launched the Nike Fit app, which uses augmented reality to measure customers’ feet and recommend shoes with a perfect fit (HBR, 2021).
2. Integration of Services and Products
Combining products with services is essential to expanding the value proposition. Companies like Casper, a mattress company, offer sleep consulting services and subscriptions to sleep hygiene products (Business Insider, 2022). At Elemento Kimonos, I plan to expand the product mix to have a complete line of sports supplementation focused on jiu-jitsu and also materials that help with physical preparation training, such as weight vests.
3. Platforms and Technology
DNVBs benefit from the use of digital platforms to offer fluid experiences. Rent the Runway, for example, uses an AI-based subscription model to personalize recommendations and optimize the logistics of its clothing rental services (McKinsey, 2022).
4. Community Marketing
Community engagement is a critical factor for success. Glossier has built an army of brand ambassadors through authentic engagement on social media, encouraging the creation of user-generated content (Fast Company, 2021).
5. Sustainability and Social Responsibility
The growing demand for sustainable brands drives DNVBs to adopt environmentally responsible practices. Brands like Allbirds incorporate recycled materials into their products and offer shoe recycling services (TechCrunch, 2021).
Challenges and Opportunities
Despite the advantages, DNVBs face significant challenges in building digital ecosystems. Managing omnichannel experiences and the need for investment in technology are common barriers (Deloitte, 2022). However, opportunities include expansion into international markets and continuous innovation in digital experiences.
Conclusion
DNVBs are transforming retail. By integrating services, they create customer-focused digital ecosystems. Success depends on continuous innovation, personalization, and community engagement. In the future, more brands will follow this model. This will ensure sustainable growth and a competitive advantage in the global market.
If you are a startup founder, marketing professional, or executive of a scale-up, it is worth reflecting: is your brand just a product or is it building an ecosystem? The future of digital belongs to those who can integrate solutions, community, and personalization authentically.