What is a“Digitally Native Vertical Brand”?
It was first coined as a term in 2016 by Andy Dunn, co-founder of Bonobos, and explained as:
Digital-first Brand platform
Vertical Integration (they design and produce their own products)
Obsession with serving their customer's specific needs and preferences, while building a 1:1 Brand:Customer relationship
Both of our guests in the 2nd episode of our Webinar, Fashion industry: dealing with Covid-19, are the co-founders of two of such brands, and although they offer very different products and address opposite markets, they sure operate by that definition.
Lodovico Brioschi, Co-founder and COO/CFO of AMARO together with Roy Bernheim, Co-founder T-Bô are growing their companies by strongly believing in the power of their communities, even in difficult times like today.
The client is kept at the center of design and marketing and, with the help of data and analytics, both AMARO and T-Bô, have been able to streamline their online operations.
Another thing these two brands have in common is that they are founded by young, Swiss-native entrepreneurs. Lodovico moved to Brazil to join Dominique Oliver and to start conquering an emerging market, while Roy moved back to Switzerland after meeting his business partner Allan Perrottet in Thailand, now selling in 120 countries.
During Covid-19 for both of the brands it was all about engaging with their customers, about understanding their new needs, understanding what they are going through and keeping up the conversation through their various communication channels. A good mix of organic and paid content have boosted their following and engagement rates, and to quote Roy, “We were able to achieve organic sales.”
And when it comes to the future and planning for it, both of them agree that being human and open to conversation is the key to success over the long-term.
Now, let’s look at AMARO’s and T-Bô’s particularities, and how they apply the same techniques.
AMARO is Latin-America’s largest womens brand, fully omnichannel, with 80% sales made online. Rather than replacing online stores with physical ones, since the beginning of 2015 in Rio de Janeiro and São Paulo, the 15 “guide shops” try to combine the best of the online and offline worlds.
AMARO employs around 400 digital innovators, serves over 600.000 clients and has the highest NPS score in Brazil's fashion retail. It’s a prime example of an e-commerce enterprise using technology to its advantage in an emerging market.
Unfortunately, Brazil is still under lockdown, with physical stores closed and with a lot of uncertainty in the air. They’ve been working from home since the 16th of March and don’t know yet when the state of alert will go away. At the beginning, their sales were impacted by 70% losses because apparel wasn’t a priority to their customers. They had to readdress everything and couldn’t leverage the benefits brought by the Mother’s Day campaign, which for Brazil is as big as Christmas period sales.
Forced by circumstances, not being able to make product photo shoots and use real models, they created and launched Mara, Brazil's first virtual model and influencer which is still controversial, but they can see positive results for the future and experiment with it.
AMARO Collective, is another initiative born because of the limits imposed by the lockdown. They helped by bringing to their website a collection of friendly brands that were heavily impacted due to the closure of physical stores. They also plan to develop this more in the future.
“Fast-fashion for us means to be able to respond quickly to the customer demand, and produce only what will sell. That’s what fast-fashion should mean to all the brands that try to make positive changes for the future.” Lodovico Brioschi
the men’s Swiss bodywear brand fit for the modern-day man co-creates its product with its community, from developing new products to how money is donated. The comfy everyday underwear and active shirts from TBô have amassed a direct customer base of more than 90,000 active purchasers, as well as over 400,000 subscribers.
T-Bô announced significant changes to its standard business model which will debut to the consumer this June, 2020; based on metrics, its product releases will now be fully demand driven e-commerce, something TBô has coined Direct By Consumer.
With the new DBC model, the TBô consumer, or the “Tribe” as they are known, will help inform and make every decision that TBô makes as a business. This includes decisions on new product offerings; pricing; sustainability packaging concepts, fabrications and philanthropic initiatives; and even size range offerings. A revised pricing structure will bring up to 70% savings to consumers.
“We ask our customers what they are looking for, and we produce a garment that fits the bill.”
Open-rates to their newsletters doubled, and the number of replies to them skyrocketed. They started sharing morning routines, the most welcomed content on their Instagram and they also started doing live-streaming.
With DBC, TBô is able to ensure that only needed and sellable items go into production, creating little to no overstock, which in turn means reduced waste reinforcing sustainability as a key pillar for the brand.
They launched the “no packaging” option in February and starting June, T-Bô sends their products to consumers in a completely recyclable envelope that is used both as packaging for the underwear as well as a shipping package further completing the brand’s goal to become more sustainable.
“We invested in technology with which we can now onboard any reseller instantly. This can be a large wholesaler, a boutique or an individual person. We only need an email address. They can then offer our products to their customers, getting a very interesting margin without any minimum order quantities - the orders are processed automatically through our fulfillment system and shipped to the reseller or directly to the customer."
Thank you for watching it and thanks to all of you who asked great questions and made it so interactive.
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