Mohawk Group Holdings and CPG Innovation

Have you heard about Mohawk Group Holdings? No? Not many people have. It is an artificial intelligence oriented consumer product goods brand.

Mohawk Group Holdings is compelling because it utilizes data to create consumer products that people appreciate. It will also use its data and systems to purchase companies that fit criteria driven by their artificial intelligence solutions.

The company is certainly intriguing because it is using artificial intelligence to make product decisions and create products that matter to consumers. To me, that’s astounding and it is a trend to follow.

We’ll talk a bit more about Mohawk Group Holdings and why they matter in the technological era.

History

The firm is quickly growing within the consumer packaged goods sector with the use of artificial intelligence technology. Mohawk went public in 2019 and currently has a $163.0M market capitalization. 

That means that the firm is still represented as a tiny company, also known as a micro-cap due to its smaller capitalization. The firm would use the proceeds from the 2019 public offering to invest and develop the business. 

But what is the business, and how do they differentiate from others?

The Mohawk Business Lines

The First Revenue Line

Mohawk sells CPG products on Amazon and will augment its human intelligence with machine learning, natural language processing, and advanced data analytics to source, manufacture, and sell products.

These products relate to healthcare, home and kitchen appliances, and other sectors as well. Mohawk has made significant progress in its small history as it has over four brands on the market at the current moment. 

These brands include hOme, Vremi, xtava, and RIF6.

What do these brands have in common? They are all for your home, office, or personal care needs. Their products range from humidifiers to air purifiers to standing desks and even hair products.

The commonality is that these products are necessities in many environments, meaning that there is a larger base of people who can be potential customers.

The next point is that these are all e-commerce first products. You can see that all of these brands have a social media presence micro-influencers that may have done a review on the product. Youtube impressions on these product videos will have at least 900 views to 60,000 views. Yes, that’s a broad range, but it depends on if you are looking at the product page or an influencer review. 

It will distribute products by using the Amazon or Walmart marketplace. Further, they will deliver products through Amazon logistics or use their own third party warehousing and delivery services, enabling them to stay more resilient.

One can notice that the brand is going with the full e-commerce strategy by going this route and positioning itself to be a fully focused e-commerce company.

The Second Revenue Line

Mohawk will also start to work with more partners on helping them increase their revenues with the AIMEE platform. This next component should be a significant revenue boost over time as they prove out the AIMEE platform by generating more revenues for their partners. Their partners can include other brands or mergers and acquisitions firms that seek to acquire and build brands that generate value for investors.

The Mohawk Difference

The brand and company with the best data wins. Well, for the most part. You must understand how to use that data and create products that matter to customers efficiently.

That, in essence, the Mohawk Group vision. The firm realizes that it is a data driven world with data driven customers who do their research before making product decisions.

Customers don’t necessarily rely solely on their friends and family to make product decisions when they have the internet and the world wide web at their disposal. The consumer journey is more complex and intricate in 2020 and the following years.

Buyers will use Google, social media, forums, and e-commerce hubs like Amazon to research products and make their buying decisions. As such, being an e-commerce brand is a great step but taking it further to use artificial intelligence to push a variety of products into the market is where the magic should be.

If the firm is able to use data to create brands and predict customer needs, it can certainly be a powerhouse brand. If it continues to show momentum each quarter, then you can watch the birth of the new Procter and Gamble.

It will be fascinating to see how the brand uses artificial intelligence, data, and general information to enhance, improve, and refine current products while deploying new one’s.

The more they can perfect the process, the higher the revenues and the more they become a relevant company to the customer.

Mohawk and AIMEE

What does the product development journey look like for Mohawk? That’s where AIMEE comes into play.

What’s AIMEE?

Its an acronym for Artificial Intelligence Mohawk e-commerce engine.

The firm will utilize AIMEE to comb through market data, proceed to data-driven product specifications, conduct agile quality control and manufacturing, optimized logistics, automated marketing, and regular customer service.

That is why the firm has four brands with over 250 SKUs and the firm targets two product launches per month.

How is the AIMEE platform working out?

Bright Mohawk Financials

Mohawk’s financials show that it’s strategy is paying off. In the second quarter of 2020, the firm launched over seven products and grew net revenue 97.5% to over $50 million compared to $30 million in the same period in 2019. It has seen gross margin improvement, decreasing losses, improved contribution margins, and fixed costs also lower.

The CEO of Mohawk notes “Our strong second-quarter results reflect our continued ability to leverage our tech-enabled business model as well as the agile and innovative culture we have created. We are excited to continue to invest in our software platform to drive further efficiency through automation. The retail and consumer world is moving to online at a faster pace, and we are well-positioned to capitalize on this shift in the long term. ”

Larger Trends

E-commerce growth is unlikely to slow down as more consumers become digital natives and make their shopping decisions accordingly. COVID-19 is only accelerating that shift to e-commerce and further digitization of everything.

The shift to online shopping started with the tech boom in the 1990s, and its only going to become more prevalent as customers get used to the convenience of Amazon and other brands that cater to the customer’s needs.

Those brands that continue to invest deeply in infrastructure, technology, and people from a data-driven perspective will benefit greatly from the technological shifts taking place right now.