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Digitally Native Vertical Brands Get Horizontal

We uncover why DNVBs and traditional retailers are teaming up.

We’re seeing it more and more: digitally native vertical brands that were once sold exclusively through their websites are opening up distribution and wholesaling their goods to multi-brand retailers. As brands look to scale their businesses, they may face challenges like the expenses and risks of opening up brick and mortar locations, as well as increasing customer acquisition costs. So, the potential of working with established multi-brand retailers can seem appealing. And as traditional retailers continue to look for ways to reinvent, partnering with digitally native brands and attracting their Millennial customers may seem just as appealing.

Michael Fisher, VP, creative director for menswear at Fashion Snoops adds, “I think the brands can benefit from greater visibility, especially in retailers who have the name recognition and have strong brand authority when it comes to discovering new and buzz-worthy.” And on the flipside for retailers, he continues, “The obvious advantage to the retailer is they have time and convenience on their side. Some consumers don't want to wait for an online purchase, or maybe they actually want to feel or touch the product. For that, a local brick and mortar works best, and those hesitations can translate into a purchase.”

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Beltology displayed at one of their wholesale accounts. 

Working with traditional retailers can also create opportunities for newer brands to learn from some of the most experienced merchants in the business. Beltology, a men’s belt brand that was established in 2014 as a DNVB, opened up wholesale distribution in 2017/18.

Now Beltology is sold at retailers like Rothman’s, Huckberry, and Ron Herman. Frans Sjo, Head of Sales and Partnerships for Beltology recalls, “We saw the power of third-party retailers to further tell our story.”

He continues, “I spoke to Tim Brown [the founder of Allbirds] about this a few months ago at a panel discussion in New York. I wondered what the reasoning was behind Allbirds’ Nordstrom launch. It all seemed counterintuitive to the core business model of his brand. Tim’s a stellar speaker and made the point much more succinctly than I could, but to paraphrase he said, ‘Nordstrom is best in class for customer service’ and also ‘started as a shoe store and knows the arena better than anyone.’ Partnering with Nordstrom was an opportunity to ‘learn from the best.’ I think there’s a great perspective in Tim’s reasoning. 

“When you partner with best-in-class retailers you will learn from the strongest market players out there. Wholesale is not to push sales and push volume – it is strategic partnerships. Some of our retailers have seen our category and trends come and go ten times longer than our company’s existence – we have absolutely learnt from it. And we have distilled it internally into some nuggets we did not plan or anticipate.”

Katie McCarthy, National Sales Manager for Stantt, echoes that sentiment: “Key improvements to product were made from retail input that took the product to the next level.” Stantt is a custom menswear brand that started with a direct to consumer model in 2013. Now, Stantt is in over 370 stores, citing Nordstrom, James Davis, Culwell and Halls as some of their key accounts. They learned that for their product, the in-person experience, was important to the success of the business.  

And it goes both ways: McCarthy says that Stantt helped introduce Millennials and newer customers to their specialty store partners. Stantt’s online experience includes video chat, and customers can setup appointments at a local retailer through their website. “Our retail partners are everything and we want to introduce our customers to new retailers,” she explains.

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Stantt

While trade shows have always been important for traditional wholesale brands, DNVBs are taking note. PROJECT has become an important event for Beltology. Sjo elaborates, “At Project New York we get feedback from key market players in advance and can tweak both our designs and projections. It actually fits neatly and tactically into our manufacturing model, being made right here in Manhattan. We can alter our production and tweak designs much closer and even into the season.”

The upcoming edition of PROJECT Las Vegas will feature some incredible digitally native brands like Beltology, The Normal Brand, Marine Layer, Rhone, Ankari Floruss and Mizzen + Main, and more. So, whether you're a retailer looking for what's new and next or a brand that wants to connect with the right retail partners, make sure to check out the upcoming edition this February 5-7, 2020. 

 

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