Is P&G concerned? Should they be?
Until 2012, Gillette and Schick advanced the traditional one or two blade razor models to three, four, five, and even six-blade varieties, and the companies were able to push prices up. A two-blade Gillette Sensor, for example, can be purchased for a little over $1 per blade (when buying a 10 count package) while the top-of-the-line Fusion ProGlide (8 to a package) costs around $3.75 per blade.
Prices can vary if you buy in larger quantities, but in general, the two major razor blade companies had a near-monopoly until Dollar Shave Club, an online disruptor, came along.
We read Daniel Kline’s June 27, 2015 article in Motley Fool and decided this would be the subject of our latest Weekly Blast. DSC was founded in 2012 bringing lower cost shaving to men (and some women) through a different model. It was catapulted to success by a video launched by DSC’s founder, Michael Dubin.
We wonder what Gillette’s senior leadership team reaction was:
- This will pass
- There is no way the DSC product will compare to our Fusion product line
- We need to watch what happens here, or
- Something else?
We don’t know but it does not appear DSC is going away and Gillette is being forced into action.
In 2012 Michael Dubin used a wacky YouTube video to introduce his company, Dollar Shave Club, to the world. The premise was very simple, for $1 a month the company ships members five two-blade razor cartridges (along with a handle on the first order). Pay $6 a month and you get four four-blade cartridges monthly while $9 gets you a four pack of a six-blade option.
DSC expanded into the men’s grooming space with the launch of a multi-product hair styling line which was covered in a PRNewswire release on March 25, 2015: “A new line of hair styling products including Gel, Clay, Cream, Fiber and Paste. Its 6th product, Pomade will arrive this summer. Introducing “Boogie’s by Dollar Shave Club,” A Line of Original Styling Formulas Including Gel, Clay, Cream, Fiber and Paste (see below).”
DSC has further simplified how Its 1.7 million members find and purchase with product matching and a satisfaction “Hairantee”
So what is going on here? We decided to generate some value curves for some razors and start asking questions.
Value Curves (VCs) for the DSC Razors compared to Gillette’s Fusion ProGlide:
Here’s our first draft for the three DSC razors and the Fusion ProGlide. Is this an accurate reflection of the value being delivered? We know it isn’t but it’s a start. We invite you to help us improve the VCs:
- Do we have the right Elements of Performance (EoP)?
- What EoP(s) should we take out?
- What EoPs should we add?
- Have we rank ordered the EoPs correctly?
- If not, which EoPs should we move up in order of importance and which should we move down?
- Is Price the most important EoP?
- Our metrics are very rudimentary. Do you have thoughts on how they can be improved and expanded upon?
If you were a Brand Manager or Product Manager at Gillette, how would you respond?
Daniel Kline wrote, “DSC has been stealing market share, but until recently it felt like the big boys in the field hadn’t noticed. Now, however, P&G’s Gillette has responded and it’s answer is a mix of intriguing, confusing, and perhaps a little misleading.”
About Dollar Shave Club (DSC)
DSC is a men’s grooming brand dedicated to helping men live smarter, more successful lives through high-quality personal care products, content and technology. DSC began in March 2012 with a simple offering: deliver high-quality razors for a couple bucks a month. The Club has since launched a lineup of additional products on its march toward owning the men’s bathroom. Those products include Boogie’s, a new category of hair styling products including Gel, Clay, Cream, Fiber and Paste; Dr. Carver’s Easy Shave Butter; Dr. Carver’s Magnanimous Post Shave; Dr. Carver’s Miracle Repair Serum, and One Wipe Charlies. DSC will soon be the easiest place for guys to get the things they use every day. For more information, visit www.dollarshaveclub.com