There are a plethora of products that consumers are purchasing in increasingly large volumes online — but razors were a household item that few companies had dedicated any significant Internet real estate to until recently.
Because of the efforts of companies like Dollar Shave Club, traditional razor manufacturers are being forced to give online marketing tactics a second look. In the last year alone, U.S. online sales of men’s shaving gear have nearly doubled to $263 million. Although this is only about eight percent of the whole market for shaving gear, the fact that online razors saw such explosive growth in just one year has marketers at companies like Gillette paying attention.
Why the Dollar Shave model is different. For a very long time, well-known razor manufacturers have had a more or less open field when it came to distribution. They had the best displays, the biggest marketing campaigns and the strongest relationships with retailers. That meant that their products were the only ones that most consumers were aware of — but as prices continued to increase and salaries remained more or less the same, a few clever entrepreneurs began to question the old razor sales model.
That’s where Dollar Shave Club and its ilk come into the story. Instead of pushing $5 a piece razors on consumers, the company offered similar products on subscription for half the cost. Even though Gillette once tried to claim that its razors were much cheaper than the online competition, their figures were based on a razor blade that could handle four shaves weekly for a month – but in practice, that’s a rare find.
Gillette’s last-ditch maneuvers. Gillette has since gone to recommending that shavers change their blades whenever they’re not getting a “close and comfortable shave,” but its prices remain unchanged in the face of a shrinking retail market for grooming supplies. Last summer’s launch of the Flexball razor has helped boost sales of the company’s higher-end blades, but it’s not enough and Gillette’s online efforts may end up being too little, too late.
With the use of razors declining as sporting beards and stubble become more socially acceptable plus companies like Dollar Shave Club being able to offer a competitive product at a significant discount, Gillette will have to find a way to regain a grip on this niche or be consumed by the competition.Google+