How to compete with a digitally native vertical brand

The top strategies for retail brands looking to compete online with the digital natives and pureplays

Last year Accenture’s Love Index report discovered that 4 out of the top 5 most loved brands were Digitally Native Vertical Brand (DNVB). These are 'online pureplays' brands which are born from, and function solely in the digital landscape like Netflix and Amazon. But surprisingly, the fifth company to have made that list was Walmart due to the digital experiences that it was creating.

There’s a lot of emphasis on creating digital experiences and equally a lot of news around brick-and-mortar having hit a glass ceiling; It’s this dynamic that led the Huffington Post to recently report that nobody knows what’s going on with online shopping. We beg to differ. You do know what’s going on, the difficulties for a multichannel brand is knowing how to execute efficiently and track accurately.

If you can relate to this plight, here are four pointers to bear in mind to help build better digital capabilities.

1. Digitise wisely

Canadian brand Aldo, found from its research that although customers enjoyed a digital experience in-store, technology didn’t boost sales when they were left alone with it, a sales assistant had to step in to initiate. And yet alternatively a consumer report found that nearly half of customers were comfortable with being left alone with a chatbot whilst shopping online.

This highlighted the importance of context when executing strategies. The modern day consumer is both the online and in-store shopper which means there’s a requirement to create both experiences but without overlooking the fact that they are the same individual. If you can integrate both so they contribute to the same customer journey, that’s an added competitive edge but one thing’s for certain, Omnichannel doesn’t mean using every channel all the time; it’s about figuring out the sequence of events which need to take place and then determining which one depends on the successful implementation of the other. This approach highlights the gaps in strategies and advises which channel / approach should be used at which touch point in order to delight a customer.

2. Rethink the purpose of your content

Last year British retailer, Tesco shared their insights at the IGD Online Conference that what they thought were abandoned shopping carts, actually turned out to be in-store conversions. Traditionally, engaging content would sit within a blog. However, now customers are consuming content in unexpected ways and this has never been more prevalent than in content marketing for eCommerce.

The role of product descriptions has started to evolve into mini, bite-size-blog excerpts in order enhance SEO so they show up on the first page of search results, communicate benefits and convey the overarching brand mission….all within the optimum character count (500 or under). Your content is becoming your commodity as opposed to it just being a tool that drives traffic and sales to your commodities. Therefore, it’s important to start rethinking its substance as well as its placement; content shouldn’t just be inspiring or informative, but direct people to the next stage of the journey acting as the transition in between each channel.

3. Nurture a hybrid team

There’s been a known rise in enterprises recruiting digital specific roles to compete within this landscape. Whilst there’s something to be said for specialist knowledge, in the process you don’t want to reinforce the silos which already exist within organisations. Most departments are able to deliver their own individual goals, but collectively this delivery can end up falling short in making a larger impact. Here a DNVB thrives as they only have one channel to operate on and are able to produce a fast turn-around for customers without the benefits getting lost in between hand-offs.

Alternatively, planning a strategy from the standpoint of what constitutes as digital should be avoided as you’ll fall into the trap of allocating tasks according to your existing processes, and not the desired output which may require a different route entirely. Instead, the focus of all teams should be on two points at all times:

1. The customer journey
2. The internal logistics needed to implement it

From here you’ll have the freedom to re-map your customer’s journey and pull skills and expertise across your teams to materialise it effectively. Digital tools should help you deliver your message, not be your message. As a DNVB only operates in the realm of digital, it can be misleading to assume that those skills are all that’s needed to create digital experiences.

4. Determine how to measure success

When we spoke to brand owners, it was surprising to discover that many were uncertain on how to determine whether their eCommerce efforts were producing results, let alone whether their strategies were enhancing their customer’s experiences. Great customer experiences should lead to engagement and / or sales. If it’s not doing either, there’s no use in having a perfect score across all your KPIs. What you end up with is factories of internal presentations to prove that on the surface your marketing efforts are on par with modern day marketing methods. And yet you’re bottom line might continue receding or remain stagnant because it’s measuring action, not progress. Which is why it’s not uncommon to think you’re making the right strides (because operationally you probably are) but it’s not translating into customer satisfaction, brand recognition or a tangible output.

However, what should be noteworthy is that these metrics can’t be assessed on their own; gaining actionable insights requires setting relational KPIs e.g. As we’ve seen from Tesco’s study, measuring how high or low your bounce rate is irrelevant if you’re not cross checking it with conversion.

The key takeaway

The results might look concerning as brick-and-mortar has been known to convert at an average of 1.4%, multichannel at 1.1% and DNVB at 2%. But we’ve seen that the non-DNVB has the capacity to deliver the same quality of offering as its opposition, its downfall is in having to successfully juggle more than one revenue stream. When you’re a company that operates across multiple platforms, smooth transitions can be tricky, not to mention the poor quality of tools available to help you measure and improve those transitions, in particularly if your products are being sold on third party websites. This means you have more steps to take, more loose ends to tie and more touch points to consider.

And yet, in your disadvantage lies the biggest advantage of all; you have options. If retailers only ever followed the consumer, the likes of Amazon and Google would never have been born. Being customer centric doesn’t necessarily mean being customer led, it means reimagining the customer journey. Especially if you want to advance your brand’s reputation and give it a fair chance in competing with these digital natives.