Many digitally native vertical brands (or DNVBs) were first marketed as a way to cut out the middleman and let consumers buy directly from the product designers and manufacturers.

Brands promised lower prices thanks to reduced overhead — they don’t need a mattress showroom for online mattress sales, and they pay for better materials and not just better marketing. But now that DNVBs are growing, and funding is drying up, these retailers are using the same tactics as big retailers to gain sales during the competitive holiday season.

According to website visits by Digital Commerce 360, 85.0% of the 80 DNVBs in the 2023 Digital Commerce 360 Top 1000 ran promotions on Cyber Monday. That’s basically flat from last year, when 84.5% offered discounts. While many brands were offering discounts, its a smaller share than the Top 1000 overall. 92.0% of a panel of 100 more traditional retailers ran promos on Cyber Monday.

DNVB Cyber Monday sales

While DNVBs were running promotions, holiday spirits weren’t quite as high. Only 63.0% of promotional retailers tied deals to the holidays and many didn’t bother with decorating their websites. Just 17.4% of promotional retailers updated their homepages with holiday images.

Not much Christmas Cheer on Third Love’s Cyber Monday sale homepage.

Percentage-off discounts dominated deals from DNVBs. Of DNVBs with promotions, 90.2% offered a percentage-based discount, compared with just 31.1% offering dollar-off deals. DNVBs also gave smaller discounts, with the median largest discount on a homepage at 40%. That compares with 50% for the non-DNVB panel. The maximum discount offered by any DNVB was 75%, which compares to 85% for traditional retailers.

Digital natives will likely continue to offer sales on key shopping holidays as they compete with retail chains and manufacturers that are getting increasingly ecommerce-savvy. While new brands that start on the web will continue to pop up, they are having more trouble finding funding as retail startups fail to reach profitability. These brands also face more competitive advertising market amid more regulation from device makers like Apple.

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