Issue #2

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Welcome to Horizon 002! This month, Rocket Code COO Matthew Gartland breaks down Andy Dunn's model for vertically integrated brands—you know, the one that claims to be the future of ecommerce. Plus, we've got some more cool tools and reads for you.

The V-Commerce Paradox

By Matthew Gartland, Rocket Code Partner and COO

I loved deconstructing toys as a kid and trying to put them back together. While some toys never made it back, I learned to enjoy and value thinking about complex systems and tinkering with progressive concepts. Today, in the playground of ecommerce, Andy Dunn's "V-Commerce" model as the future for online retail is an irresistible new toy to take apart and study.

The four tenets of Dunn's model—(1) ecommerce companies born and operating online; (2) brand, not channel, as its core asset; (3) maniacal focus on customer experience and intimacy; and (4) eventual offline extension—speak to an obsession about total control. Control of message. Control of merchandise. Control of pricing. Control of delivery and post-delivery support. Control of technology and data.

The prospect of such total control is undeniably attractive for its strategic value. As Dunn says, "...creating a V-Commerce brand gives you an opportunity to combine the growth of being an E-Commerce company with the margins of being a brand, and with a proprietary selection of merchandise where you control distribution and your own destiny."

But can you ever truly achieve total control as a strategic mandate? Or can you only hope to enable it through the activation of an audience?

The audience seems to play second fiddle in Dunn's model, when I wonder if it should play first. It feels like a classic chicken-or-egg paradox. Will a fully (i.e., vertically) integrated brand produce an engaged and loyal audience? Or is audience building and engagement the prerequisite for empowering a V-commerce company to succeed as prescribed in the model?

Naturally, the two cannot exist in isolation—at least not to yield any meaningful result. Instead, they must be woven into a fabric of feedback loops between brand and consumer that engage the consumer, promote the brand, listen to the consumer, endear the brand, invite the consumer to critique brand quality, reward brand engagement, and nurture brand loyalty.

But what's the catalyst of that chain reaction? What gets the flywheel moving?

Continue reading "The V-Commerce Paradox" on Thinkship

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