I’ve worked in ecommerce for 15 years. When I started, those of us in the industry made the rules as we went along. No one knew for sure what would work, because this sort of retailing had not been done before. Most of the successful Internet retailers stole from the playbook of shop-at-home catalog companies and direct response merchants — or even infomercial sellers.
As ecommerce has matured, however, so too has the broader strategy. And now, we have more platforms and educational opportunities for building amazing ecommerce businesses.
When I founded FringeSport in 2010, I told people we were building a “multichannel retailer” with ecommerce — FringeSport.com — as our principal channel.
We knew that ecommerce alone probably was not a winning strategy to grow an amazing business.
A few years in, I read “E-commerce is a Bear,” a blog post by Andy Dunn of Bonobos. It immediately clicked. We had always been wary of competing against Amazon, which is almost futile.
Dunn’s post aligned our thoughts about what we were building. We were bringing to market proprietary merchandise and a branded experience.
Now I read Dunn’s post every few months to refresh my thinking on our strategy and to make sure that we are building a competitively defensible business.
Dunn recently wrote a new article titled “What’s a DVNB? Only the future.” It’s a great update on “Ecommerce is a Bear.”
He sees the current wave of market-beating “ecommerce companies” as DNVBs — digitally native vertical brands — that marry ecommerce and product brands, have their initial and primary means of interacting with customers as online, focus intently on their customer experience through a package of web-mobile, customer service, and product.
This is a fantastic evolution of thought: binding together the growth and experience of companies like Bonobos, Dollar Shave Club, Everlane, Warby Parker, and more. It distinguishes between a DNVB and a traditional ecommerce retailer. It also creates a roadmap for brands to build a path to a greater customer experience and higher profitability.
The term “DNVB” likely won’t make it into my 30-second pitch at parties. But it will inform my strategic thought moving forward.
This intersection of brand and channel is particularly interesting in 2016, with the rise of the “Amazon gold rush.” Since it is so easy (relative to launching your own operation and driving traffic to your own website) to launch on Amazon, many micro brands are launching and remaining on Amazon.
FringeSport sells some products on Amazon, but it is a small portion of our total revenue. I’m skeptical of focusing mainly on Amazon. As Jeff Bezos famously said, “Your margin is my opportunity.” And what better way for the Amazon machine to obtain data on our products and customers than to build our business on that channel?
Back to the DNVB framework. If you outsource huge swaths of your customer experience, customer service, and more to Amazon, you can’t build a brand image and lasting value for your customers. In fact, Amazon won’t even allow you to email your buyers directly — Amazon considers them its customers, and rightly so.
Where does this put entrepreneurs?
If I were starting from scratch today, I’d absolutely start on Amazon and use its community and resources to launch quickly and get feedback. But I’d work hard on list building outside of Amazon to drive my own ecommerce site. I’d try to build up my own site as fast as possible, while weaning away from Amazon.