3 Key learnings
from the
momox case
The momox GmbH is Europe's largest recommerce company. It achieved sales of EUR 200 million in 2018 and is currently represented with own shops in Germany, France, the UK and Belgium and worldwide through Ebay and Amazon.
Recommerce is the trade in used goods. But unlike platforms such as Ebay / Ebay Kleinanzeigen or Vinted / Kleiderkreisel, a recommerce company buys used goods quickly and easily from individuals and carries all delivery costs and the resale risk. After a quality check, it resells the goods with all the customer benefits of a normal e-commerce company (right of return, free delivery, etc.).
momox just celebrated its 15th birthday, so it is by no means a start-up anymore, but also not quite a grow-up, rather a teenager, as Ariane Koch, PR manager at Momox describes. For momox came the point to grow up. After some years of trial and error, the company was looking for a brand architecture that fits the two very different categories that momox currently operates very successfully: books & media and fashion. A brand strategy that would also enable further growth. More detailed, this meant to stay flexibel to open up new categories and internationalize. Also, a larger brand awareness should also be possible with the new architecture, so that momox can push recommerce is even more prominently on the German market. In Summer 2019 I was able to support momox in tackling this task. After 2 months, 50,000 survey participants and some benchmarks, I submitted my recommendation for a new brand architecture and vision for the momox umbrella brand. This is currently in discussion with the board.
In this article, I would like to share my 3 key-learnings from the momox case that can help you and your business avoid their all-too-common mistakes.
1. think big and act fast - Rebranding is expensive
Yes, rebranding is expensive, but that is nothing new. What is, however, is the scale of costs. Before digitization, you probably had to produce a new TV spot, print new catalogues and POS material. And your salespeople had to inform customers about the new brand name. That was it for the most part. Newer companies had to get a new domain and redirect from the old to the new. Case closed.
So after 24 years Raider became Twix, after 2 years BackRub became Google; after 5 years Brad's drink became Pepsi-Cola; after 12 years Tokyo Tsushin Kogyo became Sony and Blue Ribbon Sports became Nike; after 2 years AuctionWeb became eBay; and after one year Confinity became PayPal.
Nowadays, there are thousands of links on the web to contend with. Social media handles, SEO texts, Google rankings, affiliates programs, anchor links, documents; all become redundant if not changed. Then think of all the paid influencers who won’t return to 2-year-old content to re-edit their video, captions or links. Yesterday's content, still found within two clicks, will confuse the customers if the brand mentioned does not match the brand they end up seeing. The customer then has to be retrieved with, at the very least, a clear renaming/rebranding campaign. Because the brand name they trusted has vanished! But why do companies need to change their name anyway? Typically, because they didn’t dream big enough nor act fast enough in the beginning.
A good example of this is go.euro.; a platform where you could book any ticket for your trip in Europe. One day, investors decided they wanted their platform to be global. Go.Euro became Omio in June 2019. The vision that inspired the first name was too small and corrected too late. An expensive rebranding was inevitable. Today, more than 6 months later, the logo still carries the rebranding tagline, “formerly go.euro”.
And what if you go viral? It’s an experience Christina Tosi, founder of the Milk Bar in NY knows all too well. When US TV personality Anderson Cooper mentioned her delicious cake. From that moment on, people went crazy, standing in line and posting countless food photos. If she was unsure about that brand name before that moment, there was no return. America was now aware of the brand. So it's not just what you plan to communicate about your brand, but who endorses it. And that can happen while you sleep.
When we researched momox' fashion shop ubup.com, the following picture emerged: Service: great. Name: not an advantage. Not for Germany and certainly not for internalization. Too difficult to pronounce, B and P are constantly confused, name does not sound like fashion nor is it in anyway appealing. A hard realization for momox 5 years after launch. They could have acted faster, checking the potential of the chosen brand name.
Key learnings: The brand name must be selected to match the the biggest vision you have for your brand or company. THINK BIG. And don’t let too much time pass in the digital age, because everything you publish has the potential to go viral overnight. So beware if using ”working titles” while trying out products and services in the market. You risk building trust, reach and awareness for a brand that perhaps has in-built limitations. Choose a brand name that has a lot of potential and then quickly secure the trademark rights, domains and social media accounts. ACT FAST and save yourself an expensive rebranding in 5 years.
2. Identify the core of your business - stay focussed
When launching the first product or service, you have to ask yourself one question: is the purpose of the company behind the brand purely financial and operational, or is there a deeper belief or vision? And should the company be established as a master brand or umbrella brand?
If the company has a core that goes deeper than just funding and operations, then it's always worth working with sub-brands or endorsed brands. That decision depends on how different your brands are and how much branding/marketing freedom your products and brands need. In this model, the brands pay in on each other’s awareness and elevate overall trust for the company. Unfortunately, there are also disadvantages in this brand architecture: if a product fails, the image and trust of the master brand and related brands also suffer.
If however the products and services are completely different and have nothing in common, it's worth building a house of brands.
Think about the brand structure from the start and it becomes much easier to plan ahead and make informed decisions. Because you have a clear roadmap and positioning. Everything was thought through from the beginning.
This wasn’t the case at momox: in the trial and error phase, all brands were created without a clear architecture. In its most recent years, the company has used individual elements from all architectural approaches. Every time momox is onboarding a new channel, country or category they must ask themselves how to brand this. This takes more time, is unclear and ultimately confuses the customers. For momox, it was clear from the beginning that they would only launch products and services that are in the field of recommerce. They believe by pushing used items they can limit the production of new goods and save global resources, which actually steers them to have a master brand.
Key learnings: If you pursue a deeper purpose with your company, such as momox, and will not deviate from it in the future, it is worth bringing all products and services under one umbrella brand, like in one of the first 3 models shown below, depending on how much freedom the brands need in the image and marketing. Kellogg's, for example, is using Endorsed Brands and emotionally charging them with very different values. While Kellogg’s remains the trust factor with a smaller set of initial values (quality breakfast cereals), Special K can partner with Fit For Fun as a healthy brand, while Fruit Loops can partner with Nickelodeon and bring sweet childhood dreams to life.
In some cases it is indeed better that the customers do not know the brands belong together and instead believe they make a decision between separate entities. If I don’t like dutch beer I can drink Italian (Birra Moretti) or Thai (Tiger) beer? Oh no wait, both are Heineken brands.
3.USE BIG DATA, BUT NOT ONLY DATA
Yes, we love BIG DATA in the digital age, or as Zalando once said: “if you can't measure it, it does not exist.” Let's use data, all the data we can find and let's analyze it and discover all kinds of dependencies. Let us ask the customers and let’s maintain dialogue with them.
But let’s not be their puppet. You won’t develop a strong brand by only fulfilling wishes. You will end up in an incentive-carousel and lose sight of the future.
You have to guess what the customer will want tomorrow. Guess? Yes, because today’s customer does not know what they will want, as they don’t know the options tomorrow will present. Some companies and brands develop products and services together with their consumer base. They take them along on the next step by guiding them, not chasing them.
That is why it is important to observe developments in government, i.e. potential new laws in the industry (the e-scooter on German roads arose from a change in legislation, as did Flixbus), new trends (food ordering with Uber Eats, deliveroo) and any new innovation in general. It is sometimes only societal tendencies that drive entrepreneurs to come up with companies like Instagram, Uber, AirBNB. In these cases, the lawmakers follow the companies (like making Uber illegal in some countries).
A good example lies the Global Fashion Agenda: More than 90 fashion brands have committed to increasing their take back actions on their used garments, bringing usable pieces back into the cycle from 2021. Soon they will look for partners if they do not want to operate the resell themselves. Adidas UK has already started taking back used items in return for store credit. In America, we are already seeing North Face and Patagonia take action. Currently, Momox’s platform, Ubup is the best player on the fashion recommerce field. But that might change when Zalando enters the field in mid-2020.
Key Learning: Changes in the market should be planned into a brand architecture so that you can react quickly. A brand might have to widen its product or service portfolio, discontinue some others or adapt to new laws. And, yes, your brand also has to be attractive enough for cooperation and partnerships. Therefore, a stronger, more flexible brand than your competition, can be the reason your competitors lose to you on the long-term, even if they might have the bigger company power. If you have bigger brand power, a strategically important cooperation can boost you above your competitors in no time.
Companies that build a new brand should take these learnings seriously. They can save a lot of trouble and open up many opportunities. Starting a brand with a vision and a purpose will guide you on building a brand architecture that will benefit your operations and make you more agile. If you are building a brand at the moment and would like some consulting: feel free to contact me.