What Is Vertical Commerce and DNVB? (2020 Marketing Trend)

What are the micro brands, vertical commerce, and DNVB that have emerged as new marketing trends?

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What Is DNVB, the 2020 Marketing Trend?

DNVB stands for Digital Native Vertical Brand. It refers to brands that emerged as the retail landscape changed dramatically, and that have many characteristics opposite to those of large corporations.

DNVBs focus primarily online and put all their energy into satisfying a smaller group of consumers rather than trying to satisfy everyone. They are unique in that they also focus on groups that have long been overlooked in the consumer market.

They often reach consumers directly without going through many intermediaries, which has the advantage of reducing margins and making the brand feel more approachable. They can be seen as a concept similar to micro brands.

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The Background Behind the Rise of DNVB

Until about 10 years ago, very few customers bought products they had not seen with their own eyes. But now, checking products online, reading reviews, and placing orders with a credit card has become a very easy and common buying method. Online businesses have return and exchange policies, and customers do not question them much.

The growth of e-commerce also supported this shift. Over the past decade, the overall e-commerce market has grown by about four times. Millennials, who make up a major share of consumers, easily trust products from small brands.

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The Difference Between Vertical and Horizontal Commerce

The classic marketing method familiar to us has been to appeal to and resonate with as many people as possible. But as the limits of that strategy became clear, more emerging brands began focusing on the long-tail market.

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Horizontal commerce is a business model that sells products across many categories, like a supermarket or department store. Amazon, Gmarket, and Coupang sell a wide range of products—from clothing to groceries, toys, and books. They offer the advantage of buying a variety of products in one place at excellent prices through numerous supply partners.

In contrast, vertical commerce focuses on niche markets. It aims to move beyond conventional thinking and deliver maximum satisfaction to specialized markets and customers. Because it concentrates on fewer product categories and products, it closely studies how to keep those products fresher, display them more attractively, and sell them effectively to customers. By focusing on specific customer groups, it becomes easier to win their hearts, and thanks to the growth of e-commerce, more customers are opening their wallets to these markets.