How Digital Native Brands are Growing Faster Online and in Marketplaces than Established Brands

Introduction

Digital Native Brands (DNBs) have radically changed the landscape of online commerce and marketplaces. These brands, designed for the digital world, are developing rapidly thanks to modern, innovative strategies. By contrast, established brands, rooted in traditional methods, often struggle to keep pace. This article explores in depth the differences between DNBs and established brands, and how the latter can learn from new digital strategies.

1. Identifying the target audience

Digital Native Brands: DNBs use advanced analytical tools to define and understand their target audience with the utmost precision. They segment their audience into specific groups based on demographic, behavioral and psychographic data, enabling them to personalize their marketing strategies to maximize impact.

With tools such as :

Established brands: Traditional brands rely on broader, less targeted segmentation methods, often based on historical data and traditional market research. This approach limits their responsiveness and the personalization of their offers.

Comparison of approaches

AspectEstablished brands (GSK)Digital Native Brands (Glossier)
Collection methodsConsumer panels, market researchReal-time data analysis, direct feedback
Data typeDemographic, historical behavioralDemographic, behavioral, psychographic
SegmentationBroad, less specificFine, customized
ReactivityLimited time between collection and analysisImmediate, quick adjustments
PersonalizationLow, generic offersHigh, offers tailored to each segment

2. Strategies for Growth and Collaboration

Digital Native Brands: DNBs exploit collaborations with influencers and celebrities to rapidly increase their visibility and credibility. They tell compelling brand stories and invest in compelling visual presentation to create a strong, memorable brand image.

Like the example of Amazon live, which mixes sales with lifestyle to sell better.

Established brands: Traditional brands can be slower to adopt these new collaborative strategies. They often prefer traditional advertising campaigns, which limits their potential for rapid growth and connection with a younger, connected audience.

DNVBs in France show rapid online growth thanks to significant investment in digital marketing and a multi-channel presence, often outperforming established brands in these aspects. Their specialization in certain sectors and their digital-focused strategy enable them to expand rapidly on marketplaces and other online channels.

According to LSA:

Growth in number of DNVB:

  • In 2019, there were 344 French DNVBs with annual sales of over €300,000.
  • This number has doubled in three years, reaching 715 by 2022.

Dominant business sectors:

  • The main DNVB sectors are apparel and lingerie (25.5%), wellness and cosmetics (23.9%), and accessories (19.3%).
  • These sectors show specialization and rapid growth in specific niches.

Customer acquisition cost:

  • The average cost of acquiring a new customer in 2022 was €32.40, up 24.6% on 2021.
  • The sectors with the highest acquisition costs are home and decoration (€35.6) and accessories (€31.3).

Investment in digital marketing:

  • DNVBs spend an average of 30% of their sales on digital marketing, showing a heavy reliance on online channels to attract customers.

Multi-channel presence:

  • 75% of DNVBs are present both online and in physical outlets, demonstrating an omnichannel strategy.
  • In terms of sales breakdown, 58.6% comes from their e-commerce site and 31% from in-store sales.

3. Visual Content and Online Presence

Digital Native Brands: DNBs invest heavily in high-quality visual content, including professional videos and well-designed websites. They use a consistent and attractive visual presentation to effectively convey their message and appeal to their audience.

Established brands: Traditional brands can find it difficult to adopt the latest trends in web design and visual content. Their online presence may seem less dynamic and less adapted to modern consumer expectations.

4. Commitment and Communication

Digital Native Brands: DNBs build and maintain constant engagement with their audience through robust email lists, regular updates, promotions, and relevant, personalized content. They use social platforms to interact directly with their customers, creating a community around their brand.

We can take the example ofHydratis, which is more flexible in terms of communication, surfing on social networks, trends ...

Established brands: Traditional brands may use less personalized communication methods, relying more on mass marketing campaigns and traditional customer relationship management methods, making their communication less effective and engaging.

Here's a comparison chart between Digital Native Brands (DNBs) like Hydratis and established brands, highlighting their approaches to engagement, communication and types of advertising on marketplaces:

AspectDigital Native Brands (DNB) - HydratisEstablished brands
Email Marketing- Robust, segmented email lists
- Regular, personalized updates
- Generic and less frequent emails
- Standardized mass campaigns
Relevant content- Targeted promotions and exclusive offers
- Personalized, relevant content (blogs, tutorials)
- More general content
- Less personalization
Social Networks- Direct interaction with customers
- Creation of an active community
- Organization of online events and competitions
- Mainly used to serve ads
- Less personalized interaction
- Less effort to create an active community
Targeted advertising- Targeted ads on Facebook, Instagram, TikTok
- Personalized Google Ads
- Collaboration with influencers
- Retargeting ads
- Television and radio advertising
- Magazine and newspaper advertising
- Generic online advertising
- Sponsorship of major events
Customer Relationship Management (CRM)- Interactive and personalized approach
- Quick responses via social networks and email
- More formal customer service
- Standardized call centers and emails
- Less personalized communication

5. Attention to detail and customer experience

Digital Native Brands: DNBs pay particular attention to the details that enhance the customer experience, reflecting their commitment to quality and consumer satisfaction. They optimize every customer touchpoint, from packaging to after-sales.

For example, Horace is in the cosmetics business, but specializes in men's cosmetics (which are often aimed at women).

Established brands: Traditional brands can neglect certain aspects of the customer experience, focusing more on their products rather than the service details that make the difference in modern consumer perception.

6. Launch and Innovation Strategies

Digital Native Brands: DNBs are adept at strong product launches, using strategies such as pre-orders and teasing campaigns to build anticipation and excitement around their new offerings. They also exploit customer feedback to fine-tune their products before the official launch.

For example, we have my jolie candle, which offers candles with jewels, an incentive to buy, and a type of advertising that has an impact on the consumer.

Established brands: Established brands often adopt more traditional approaches to product launches, which can seem less dynamic and less in tune with the expectations of the modern audience. Their launch process can be longer and less flexible.

Here's a table comparing launch and innovation strategies between Digital Native Brands (DNBs) and established brands:

AspectDigital Native Brands (DNB)Established brands
ExampleGlossaryL'Oréal
Launch StrategyPre-orders and teaser campaignsTraditional launch with advertising campaigns
Using FeedbackRapid integration of customer feedback before launchFormal feedback collection and integration process
ExcitementCreating buzz via the online communityLarge-scale advertising and in-store events
Development ProcessAgile and fast, with frequent adjustmentsLong and structured, with in-depth research
FlexibilityHigh flexibility to react to returns and adjust productsLess flexible, rigid process
Time to marketFast thanks to pre-orders and continuous adjustmentsSlower due to rigid development processes

7. Continuous Improvement and Adaptation

Digital Native Brands: DNBs regularly evaluate and adjust their strategies to stay relevant and competitive. They use data analysis and customer feedback to adapt to new trends and market developments, demonstrating greater flexibility and responsiveness.

Like Merci Handy, who's going to use influencer marketing, which is very trendy at the moment.

Established brands: Traditional brands can be less agile in assessing and adjusting their strategies, relying on longer, less responsive planning cycles, which can make them less competitive against DNBs.

Comparison table

AspectDigital Native BrandsEstablished brands
Audience identificationPrecise segmentation based on analytical dataBroad segmentation based on traditional surveys
Growth and CollaborationCollaboration with influencers, captivating storiesTraditional advertising campaigns
Visual ContentInvestment in high-quality visualsMore conservative online presence
Commitment and CommunicationPersonalized engagement via email and social networksLess personalized mass communication
Attention to detailsOptimization of contact points, enhanced customer experienceLess attention to service details
Launch strategiesStriking launches, use of pre-ordersTraditional approaches, longer processes
Continuous ImprovementRegular adjustments based on data analysisLess reactive planning cycles

Conclusion

Digital Native Brands have leveraged modern technologies and innovative strategies to grow rapidly online and on marketplaces. Their ability to deeply understand their audience, collaborate effectively, invest in quality visual content, and engage with their customers in a personalized way sets them apart from established brands. To remain competitive, traditional brands must embrace these new approaches and adapt to the expectations of modern consumers. By learning from DNBs, they can not only survive, but thrive in the ever-changing digital landscape.