No. 310: The Bonobos Curve


The history of digitally native vertical brands (DNVBs) goes back just 12 years. However, the framing of the industry has evolved and so has its terminology. Appointed by Bonobos’ founder and current Walmart executive Andy Dunn in 2016, the DNVB acronym has given way to a simpler version: “DTC” or direct-to-consumer. It rolls off of the tongue and it’s all-encompassing – reporters, analysts, and sources like 2PM and Lean Luxe can apply the terminology across the board. For Bonobos and Dunn, there is symbolism in the paths of the company and the executive. It’s emblematic of the curve that many companies and executives will follow.

By the end of this, you may see how short-sighted the DTC descriptor can be. I believe that the acronym should be viewed as a title of a sales channel or perhaps an emblem of a retailer’s core competency. It’s a misnomer when product manufacturers are appointed the title DTC, as if it’s main channel denotes the character of the entire company. To the mere observer, the consumer has evolved. To operators within digitally native retail, it’s a complicated conversation.

Platforms like Shopify democratized opportunity for early-stage product manufacturers. Led by Tobias Lütke, the CEO led the burgeoning commerce platform at the onset of the Great Recession of 2008 and remains there today. Under his leadership, the company is trading at a $22 billion market capitalization. The timing of Shopify’s ascension is significant. By 2009, the Wall Street Journal was publishing articles like “Recession turns malls into ghost towns.” And given the lack of eCommerce presence for many of the brands that lived and died by big box retail, the macroeconomic effects on the worst recession of this lifetime thwarted brand sustainability. In some cases, the product manufacturers had to seek bankruptcy protection as overall consumer demanded dwindled between 2007 and 2010. This era of web-first retail was fortuitous, it happened at the weakest point for traditional brands in the last 60 years.

The retail industry has changed, not the consumer.

Younger brands had few if any places to turn to effectively market their products. With their lean teams and inexpensive architecture, these brands were capable of surviving the treacherous waters of American consumerism. In 2013, this is what Kevin Lavelle and I wrote for the Wall Street Journal in 2013:

Startups like ours can focus our energy on developing our product, service and brand because of the platforms and tools available today. With the emergence of new web applications and plugins, the face of e-commerce is changing dramatically. A business can launch a product or service worldwide and reach millions without the massive infrastructure investment required just a few short years ago.


Platforms such as Shopify and Stitch Labs have enabled Mizzen+Main, along with myriad other companies, to focus on brand and product first — essentially democratizing e-commerce. That’s not revolutionary news, but with the robust, cloud-based add-ons available, we really can run an entire business with two partners in two states and nearly all systems run virtually. 

Most challenger brands focused on direct to consumer sales in 2007-2014 because distribution through the likes of department stores, Walmart, and Target were inside games navigated by industry veterans. Coupled with this historic economic downturn, there was little to no access to those channels. And when their were, ERP technology was difficult for newer brands to adopt. In short, those distribution deals were difficult to land.

In this way, direct to consumer sales efficacy was a sort of social proof for potential big box retail contracts. These contracts are much easier to land now; big box retailers invite breakout challenger brands to their shelves. This is enabling traditionally digitally native companies to expand their physical footprints by way of owned storefronts and wholesale agreements.

Bonobos Curve: the path of diffusion from a siloed direct to consumer (DTC) method to a holistic organization of online channels (native, marketplace), physical brand stores, and wholesale partnerships.

By the time that Andy Dunn wrote the heralded rise of digitally native vertical brands, his company successfully raised over $120 million with at least a dozen Bonobos Guide Shops and a nationwide partnership with Nordstrom. In his famed blog, he discussed this in detail:

While born digitally, the DNVB need not end up digital-only. This means the brand can extend offline. Usually its offline incarnation is through its own experiential physical retail, or pop-up strategy, or highly selective partnerships. In nearly all cases of partnerships with third parties, the brand controls its external distribution versus being controlled by it.

Assuming that the economy continues to hold steady and Tier A and B malls continue redeveloping real estate to attract this new wave of brands and their followers, we will see the curve continue and with rare exception. Even companies like Glossier, who are notably opposed to diverging from DTC marketing, have begun to invest in physical retail. And there will be more. In this way, the retail has boomeranged. The retail industry has changed, not the consumer.

Below, is the “Bonobos Curve.” This is the behavioral path toward sales maturity that the brand winners of this era will pursue. As such, many of the most successful brands have relationships with Nordstrom, Macy’s, Target, Walmart, or direct partnerships with progressive mall development companies.

A typical path followed by DTC brands | Souce: 2PM

Few brands will remain online-only. In a recent conversation with Betakit, Shopify discussed their plans to address the “Bonobos Curve”:

The pair see vast opportunity for Shopify to grow in the brick-and-mortar retail market. It’s Shopify’s goal, stated Black, to span the entire ecosystem to meet the needs of all its merchants. He emphasized that it doesn’t matter if merchants approach Shopify from a Shopify Plus standpoint or from Shopify Retail, the company hopes to create seamless solutions that span both markets.

Legacy product marketers, like P&G, have equipped their brand management teams to infuse their operations with many of the same tools and practices that their challenger brands counterparts made popular. It’s true that those challenger brands will mature with online retail operations as a core competency. Given the age of many of today’s founders, digital-first competency will be as natural as walking or eating.

But DTC was never the goal of these retailers and consumerism hasn’t evolved as much as we’d like to believe. Brand traction was the goal for many brands like Bonobos and platforms like Shopify, WooCommerce, and BigCommerce leveled the digital playing fields for a while. Time will tell who holds the advantage as brands compete on traditional grounds but Andy Dunn is now a Walmart executive. And Bonobos is a Walmart brand with flagship stores and Nordstrom distribution. This represents the end of the curve and the closing of the Book of DNVB.

Read the No. 310 curation here.

Report by Web Smith | About 2PM

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