This investment carries considerable risks and may lead to a loss of the entire assets invested. Projected returns cannot be guaranteed and may be lower than expected.
With 40,000 male customers, Mornin’ Glory offers fairly priced razor blades and other men grooming products via a subscription and as such it eliminates uninspiring trips to the supermarket and solves the problem of constantly forgetting to buy fresh supplies. With the help of the crowd, Mornin’ Glory wants to develop new exciting male products to cover the entire morning bathroom routine and to expand their business into more European countries.
Traditionally men have been buying shaving supplies and grooming products in drugstores and supermarkets. And we all have personally experienced being in the men section in the drugstore to realize our favorite product is sold out or having to endlessly look for a shop assistant to open the security case where razor blades are locked away (seriously!). Or the fact that you keep forgetting to buy fresh blades on your way home from work and consequently have to shave with a stale old blade for many days. This is not fun!
Think about your daily grooming routine - shave, take a shower, brush your teeth and look after your skin and hair. Everything you do to prepare yourself for the day ahead of you. For every action you need one or several products. And as you use them every day, they must be of good quality, fairly priced and do their job without you having to worry about. A range of functional products purchased routinely and with no or little emotional involvement.
At Mornin’ Glory we believe that the essential grooming products should come to you rather than you having to go to them. Quite simple: you order online, decide when you want them and we send them to your home.
Fabio, a seasoned banker and Ulli, an ex-consultant, both shaving and grooming, but tired of spending lots of money for overpriced blades, fed up with going to supermarkets and bored by big corporations advertising, decided to launch Mornin’ Glory, a fresh and new online brand. Mornin’ Glory allows you to reclaim the saved time for yourself and turn what was before a chore, into a pleasurable experience where time is spent on what matters the most: you.
At its launch at the end of 2012, the Mornin’ Glory e-shop offered a subscription for good quality razors at fair prices. In 2014 it introduced an exclusive line of natural grooming products made in Italy. Now customers can receive from a single source everything needed for that perfect shave, thereby ensuring they are always well groomed.
But for Mornin’ Glory, shaving is just the entry foot to men bathroom, where our shaving subscription takes away the burden of basic products that need regular replacement. We are now about to expand our successful concept with the introduction of additional man grooming and beauty categories, which will also contribute to making men life easier. Think about the products used by every man during his morning grooming routine …..
In parallel to our wider product portfolio strategy, there exists the opportunity to roll out our concept and products across other European countries. This will be in addition to our existing German-speaking markets, which we will continue to develop.
Our products are available on our web-shop under two categories:
- Shave-plans, the blades subscription with regular deliveries
- Products, which includes starter kits to test our products, gift boxes, grooming products and refills for those customers that prefer to buy products in bulk
Razor and blades
Customer can choose whether he wants to receive the razor blades regularly in a very convenient subscription or simply buy them whenever needed. Under a subscription plan, we send blades free of shipping costs, right on time and directly into his letter box. And with the first shipment he also receives a free handle. Customer can choose among various delivery frequencies: monthly, bimonthly or trimonthly, depending on shaving habits. This ensures he never runs out of fresh blades.
Mornin’ Glory offers two different types of blades: the Alpha featuring 5 blades and a trimmer on the back, our bestseller with a 75% volume share, and the Freshman with 3 blades.
Grooming products
From the outset, our aim was to develop an exclusive range of grooming products of high quality, based on strong and positive values. Products with plenty of natural oils and essences and free of all the nasty ingredients, like paraben. Therefore we set very strict selection criteria and high standards.
When we started searching for the ideal cosmetics partner, without any hesitation we turned to the country that practically invented style ... Italy, where we found a perfect partner. We launched our grooming line in the summer of 2014.
We are very proud to share with you our quality promise:
They are grouped in three categories and numbered between 1 and 7 to symbolize the chronological order of their usage for an optimal shave.
Our business concept is based on a hybrid model composed of :
- subscribers who receive our products automatically and with a regular frequency
- transactional customers who purchase products whenever they need
Subscription
Subscription is currently only available for blades, but we are currently working on making it available for other products as well. Customer signs up for a subscription under which he easily chooses the blade model and the frequency of delivery. By logging into his personal profile the customer can change the shipping frequency, pause deliveries and change the model of razors. Customer is charged a fixed € amount for each delivery, a few days before the shipment date. No upfront payment or minimum subscription time. He can cancel at any point of time - but probably he won´t.
Transaction – buy on demand
Like in any online shop, customers who do not want to subscribe can here make single purchases of the following products:
- a shave kit - to test the blades before committing to a subscription
- blades in bulk, which are sold in multi-packs
- grooming products
- multi-products kits
- gift-kits/gift cards for special occasions
Customer Relationship Management (CRM) plays a key role from the moment we have acquired a new customer. On the subscription side, the objective is to offer to a subscriber also grooming products, as the logical complement to the razors. On the transactional side, the aim is to covert a buyer of blades into a subscriber and ensure a continuity in its purchases of products.
The Mornin’ Glory hybrid model is very attractive from various points of view, which, by the end, all play a role in unleashing a very interesting Customer Life Time Value for the business:
- by cutting off the retailer and selling directly to the consumer we are able to retain a higher gross margin
- by manufacturing our own exclusive grooming products, instead of buying them from other manufacturers, we have full control on our costs and can generate higher gross margins. The bigger we grow the higher are economies of scale
- subscribers, by definition, have a long life time
- our transactional business allows us to cross-sell products in particular to existing subscribers, thereby increasing basket size and purchase frequency.
The planned expansion of our product portfolio will lift all drivers and increase our overall gross margins and Customer Life Time Value.
The unicity of Mornin’ Glory resides on three clear and well defined elements. Their combination has resulted in a powerful platform upon which to build a strong and successful European male grooming brand.
Service oriented
Our mission is to take care of all man grooming needs in a simple manner. We free the customer from all his basic grooming needs and worries at several levels of his journey. For example, we propose our products via a flexible and affordable blades subscription. Or, we have implemented a concierge-style telephone service where trained staff addresses shaving and grooming questions. Our straight-forward communication and direct friendly approach is part of our brand DNA.
Only male - only digital
By limiting our offer exclusively to the male sector and in a very specific product category grooming, we have been able to build a deep and dynamic understanding of the customer and his needs. As a pure online player, we have an uninterrupted personal interaction with each customer, which we utilize to optimize marketing activities. It is also a valuable source of information. For example, the high opening rates of our customer surveys confirms the close relationship we have established with our customers.
Highly focused product strategy
Mornin’ Glory promise for high quality, fairly priced products is central to their strategy. The Mornin’ Glory shaving subscription is the wedge to the male bathroom. And our product roadmap brings us to offer in the near future the full range of basic grooming products; everything a man needs daily. And as a digital brand we have access to our customers to gather input for the development of tailor made products, such as our successful body and sun protection after-shave balms.
Marketing plays a central role at Mornin' Glory. We use the most modern technologies and are therefore able to perfectly measure and assess our success at the campaign level. This applies, in particular, to our online marketing channels that are currently our main point of attraction for the majority of our new customers.
Our success can be traced back to a very simple equation:
? CAC >=< CLV ?
CAC (customer acquisition cost) describes the costs required to win over a new Mornin' Glory customer. CLV (customer lifetime value) stands for the total contribution margin that the new customer will contribute to the company. A company can only be successful if the CLV is higher than the CAC. At Mornin' Glory, individual campaigns interlock like the wheels of a cog. For example, we coordinate the exact transmission times of individual TV advertisements with specific online channels in order to achieve the best possible effect.
All our other online channels are also in symbiotic relationships in which the measures support each other in order to increase efficiency. A very good example is the success of our Facebook campaign that was launched in 2013. The first social network campaigns went so well that Mornin' Glory was used in a case study for internal purposes: But we never rest on our laurels, and instead continue to optimize, test, and question every new campaign. These measures have enabled us to reduce our new customer costs (customer acquisition costs) by approx. 75% over the course of the past 12 months. Today, we are in a comfortable position in which we have optimized numerous wide-reaching channels that allow us to grow very quickly with an increased marketing budget without the necessity of increasing the CAC.
TV campaign
Thanks to our strategic partnership with Sky, we have been able to gain valuable TV campaign experiences at very favorable conditions since March 2015. As our brand only addresses men, we consider the channel's focus on football and sports very appropriate. Bundesliga, Champions League and DFB Cup make this extremely wide-reaching TV channel a perfect marketing opportunity for us.
Product Management and User experience
As soon as users visit our online-shop, Product Management ensures that users find what they are looking for and gently guide them to order our products.
Product management operates around three high level goals:
- Increase the conversion rate of new customers (conversion rate = number of customers ordering / total online-shop visitors),
- Drive the up- and cross-selling rates of existing customers (up-selling = convince one time blade buyers to start a blade subscription, cross-selling = get customers to try out i.e. a shaving gel, when they only ordered blades before.)
- Increase the average cart value of each order.
Blades
We source our razors and blades from an American company who is one of the largest, oldest and most respected razor manufacturers that has been making high-quality razors in the USA for many years. As the company has inventories based in Europe, the supply of products on short term is ensured as they can usually turn around an order within a week. Since 2012 we have been building a strong relationship with our supplier to ensure customers always get the best products possible and as one of their preferred online-only buyer, we enjoy an ongoing fruitful exchange of information.
Grooming Products
Fabio, one of the founders, who is from Lugano, in the Italian speaking part of Switzerland, discovered a company in the Bologna area, a region that, is known in the world not only for its fantastic food, but that also has a very long tradition in the manufacturing of quality cosmetics.
Fabio established a very personal relationship with its owner, a true Italian gentleman, who has spent his entire professional life in the cosmetic business. Together, with his team of experts, they developed an exclusive range of high quality products, enriched with essential oils and other natural ingredients.
Additionally as a family owned company they can provide us with a high degree of flexibility in terms of production and a very personal service in the conception and development of future products.
Mornin’ Glory fragrance
It was created in collaboration with the team of perfumers at one of the leading German companies in the perfumery sector. They have been producing and refining essential oils and perfume compositions for over 70 years.
The Mornin’ Glory fragrance top notes are from tangy Sicilian bergamot, Mediterranean lemon and fresh waters of the sea, which give new energy - for body and mind.
Since its launch our fragrance has been a true winner among all of our customers with raving reviews.
Marketing cooperations
The public likes our idea. We have already implemented numerous successful cooperations with notable partners. Our partners benefit from the Mornin' Glory image and products while we are given access to a large audience. Everyone's a winner. Examples of successful cooperations include Douglas, Zalando, Eterna, Outfittery, and Brille24. We have also worked with film distributors. Our extremely loyal male Mornin' Glory customer base is very interesting for many of our partners.
Our customer base is 95% male. This is not a big surprise as our brand is specifically targeting men. We believe that this focus is crucial for credibility of our brand.
We know that convenience and trust are some of the key arguments for starting a Mornin’ Glory subscription. Time is precious to our customers. They have a high appreciation for spending it on what is of value to them. And this is how we define our user groups.
We consider their life circumstances and mindset. Our customers are on their feet, confident with who they are, working, have a partner or family, are short on time and therefore very much enjoy their social life. Demographics, e.g. on average being older than 30 years, are rather a result of these characteristics.
The status of the male grooming sector in general, and more specifically the razor and blades sector, is characterized by several factors, which are the foundation on which Mornin’ Glory strategy was built.
1. Grooming is moving online
As outlined by a McKinsey (www.mckinsey.com) research, since a few years the “Health and Beauty” sector is right at the centre of the “digital battleground”, where legacy brands are being challenged. This is defined as product categories that are moving online in terms of research and purchases. In a McKinsey survey, “can be easily reached” emerged as the second-most important retail market driver, trumped only by “the store I trust most.” And these days, easy accessibility equals online shopping for an increasing number of customers. In simple words this mans that more and more European consumers are now, and even more will, purchasing cosmetics and grooming products online.
2. Grooming - A growing market
From the “Male Toiletries in Europe” report by Datamonitor (www.datamonitor.com), the European Male toiletry sector is worth approx. €8 Billion and it grew by 20% during the period 2010-2015. Toiletry is defined as retail sales of razor and blades and pre-and post-shaving preparations.
By considering other grooming categories, such as skin and hair care, we exceed the €15 Billion market size for Europe.
In contrast to a stagnating European razors and blades market, due to (i) recession in some countries, (ii) improved quality in blades durability and (iii) beards having become more mainstream, the male grooming sector has been showing robust growth due to an ongoing trend whereby man are now spending on average more money on grooming and cosmetic products then in the past.
3. Consumer insight: What do men want?
4. A stale competitive landscape
For decades the European razor and blades sector has not seen many new players and was dominated by a handful of brands offering expensive high-tech products with power handles and a few unexciting store brands. And during this period the vast majority of purchases was taking place off-line in retail stores. E-commerce has enabled a disruption in the razor and blades market ,whereby products can be sold directly to the end-consumer bypassing the brick-and-mortar retailers and share some of savings with the consumers.
5. A proven concept
This market revolution has seen two new strong players emerging in the USA razor and blades market. As pure online brands, Dollar Shave Club from California and Harry’s from New York have launched a highly successful direct competition to the domestic market leaders. Dollar Shave Club counts today more than one million subscribers and Harry’s acquired its German blade supplier.
A proven model to be scaled
What comes next
Based on our learning and experience accumulated during these past three years, we are now ready to accelerate the growth of the company around two main levers, as mentioned earlier:
1. Strategic expansion of our product portfolio
We are currently working on two accessories to complete our shaving range: a stand for our Rover handle and a travel bag for the many Mornin’ Glory customers on the move. We are planning a launch of these products in the next few months.
In parallel we have been actively working with partners across Germany and other European countries on new and exciting man grooming products that we will gradually introduce starting from 2016. Products that are used by every man daily and that need to be repurchased on a regular basis. Subscription friendly products that customers will be able to add to their monthly delivery of blades. Among others, think about dental and skin care.
With a wider product portfolio we can address a bigger market, satisfy more needs and become even more relevant in the eyes of the customer with our smart approach. This will result in a bigger basket size and higher repurchasing frequencies.
2. Entry into new European markets
With a market situation very similar to what is our home German/DACH market, we want to enter new western European markets with our razorblades and grooming subscription concept. We have defined a priority countries list according to several criteria such as penetration of system wet-shaving razors, e-commerce level and market size. This international expansion will start in 2016 and we are talking to potential partners in several countries.
For the foreseeable future, we will be able to service the new markets from our existing logistic centre in Brandenburg, thereby avoiding big additional investments in costly infrastructure. The contracts with our existing shipping providers allow us to remain competitive also in an international context.
Stage 1: EUR 100-250,000
- Online marketing: scale online performance marketing budget in our home German market, as well as in neighbouring German-speaking markets, Switzerland and Austria.
- Commercial cooperations: close new commercial cooperations with leading German online and offline companies.
Stage 2: EUR 250-500,000
- Online marketing: continue marketing pressure in DACH markets.
- Product development: we will allocate a portion of the funds raised to develop and launch great new products in new grooming categories. This entails activities such as products conception, sampling, packaging prototyping and graphic design.
Mornin’ Glory can count on a tandem of investors who have been supporting the company from the early stages and who are involved in all strategic decisions. Additionally, other business angels and private investors who have invested in Mornin’ Glory bring their professional expertise to the benefit of the company, ranging from PR, TV and Media to partnerships and operations.
Christophe Maire/Atlantic Labs, Berlin
Christophe Maire has more than 18 years’ experience as a founder and CEO of technology ventures. He founded gate5 which sold to Nokia in 2006. As an angel investor Christophe was involved in Brands4Friends (eBay), StudiVZ (HB), Plista (groupM), Readmill (Dropbox), amongst others. Christophe was named best “European Seed investor” in both 2011 and 2012 by Techcrunch. He serves on the board of EyeEm and Soundcloud.
"I have been supporting Mornin' Glory ever since it was founded. The company's idea of using simple ideas to help men save time, its fresh brand, and its experienced team immediately convinced me. Mornin' Glory is using quality, humor, and the best service possible in an ingenious way to create a new and innovative trend based on simplicity. The company's communication style is straightforward and honest. This is precisely what the world of male grooming products has been missing so far. Mornin' Glory is in line with the zeitgeist, and its powerful brand provides great potential for an expansion throughout Europe."
Christophe Maire, Founding Partner & CEO, Atlantic Labs, www.atlanticlabs.de
Investitionsbank des Landes Brandenburg (ILB)
Investitionsbank des Landes Brandenburg (ILB) is a public-sector development bank managing different investment funds that are financing growth-oriented and innovative businesses headquartered and/or located in the German state of Brandenburg. The fund's goal is to finance and support growth-oriented SMEs, particularly technology companies, through active and silent participation in joint-stock companies.
"The innovative Mornin' Glory concept is as simple as it is ingenious. First, simple and regular shipping to customers truly creates added value for these people. Second, the start-up's direct access to a highly interesting target group provides it with a significant competitive edge over traditional cosmetics companies that rely on (blind) sales through retail stores. Mornin' Glory's in-depth knowledge of user behavior will most likely be very interesting to many established brands as well. Consequently, we believe that Mornin' Glory has great international potential, and we are glad to have invested in this business."
Thomas Krause, ICT and Life Science team leader at Investitionsbank des Landes Brandenburg and authorized signatory of its affiliate BC Brandenburg Capital GmbH, www.ilb.de
Mornin' Glory GmbH
Strelitzer Str. 60
10115 Berlin
Germany
Phone: +49 (0)151 7450 1084
Email: invest@morninglory.com
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