Globally, ‘Men’s Grooming Market’ is over $ 18 Billion and expanding; and is estimated to touch over $21 billion in revenue in by end of 2016. Gillette owned by FMCG giant Procter & Gamble Co., controls over 66% of the total global market for men’s razors and blades*. Gillette founded by King Camp Gillette, is one of the oldest and most respected company across the Globe, Gillette is known for its superior & innovative Men’s shaving & grooming products & the brand enjoys high brand value globally.
Gillette pioneered an older but very effective business model in men’s shaving market called ‘Razor & Blade Model’. The model is simple, you first buy a cheap razor (blades comes attached) but eventually you have to pay for the blades which cost very high. Blades are recurring expense and you are locked in the cycle; if you decide to change the blade, you will have to change the razor as well. So, a consumer didn’t have any choice and he has to buy high cost products or compromise on quality by opting for cheaper products. But things changed in the year 2011 when Mark Levine and Michael Dubin launched Dollar Shave Club (DSC); DSC’s superior yet low-price razors disrupted Gillette’s traditional marketing model. DCS model was well appreciated by the target audience & today DSC has over 5% of the U.S. men’s shaving market; and the most importantly the start-up was acquired by Procter & Gamble’s arch-rival Uniliver for $ 1Billion all-cash acquisition.
So what is Dollar Shave Club & how does it works?
Dollar Shave Club is a subscription based model and it offers the superior quality razors and blades. One can sign up for a subscription and get their regular package of razors monthly. Basically they offers 3 plans:
– The Humble Twin (2 stainless steel blades per razor, 5 cartridge per month for $1 per month)
– The 4X (4 stainless steel blades, 4 cartridge for $6 per month )
– The Executive ( 6 stainless steel blades, 4 cartridge for $9 per month)
– There are other combo offers called Smart, Brilliant & Genius Bundles are also available
– Special gifting options and E-card is also available
Each subscription comes with a free compatible razor. DSC has also launched its own range of shaving accessories like pre-shave cream, shave butter, post shave moisturizers and wipes. The BIGGEST advantage of this model is that you can stop/ change the subscription any time depending upon the usage / requirement.
The entire model is completely DIGITAL i.e. one register for the subscription online, there are no physical stores and the products are directly delivered by the company on your door step. Amazing isn’t it?
Dollar Shave Club works on ‘no frills model’ and does not manufacture their razors and blades; they reportedly buy razors & blades from a company called DORCO & rebrand them. In fact Dorco razors and blades are also available on various e-commerce sites but they are considerably expensive and DSC managed to provide the products are a cheaper price thanks to its subscription based model.
Dollar Shave Club Marketing Strategy:
Dollar Shave Club took the nation by storm thanks to its wacky yet brilliant launch video entitled “Our Blades Are F***ing Great”. The video featuring CEO Michael Dubin was uploaded on YouTube video and prompted 12,000 orders in a two-day span after it was released, and has received over 23 million views so far. With literally zero advertising spends Dollar Shave club managed to reach to over 23 million customers all Thanks to INTERNET & YouTube. DSC also managed to create true brand loyal customer base for Free whereas Gillette spends billions of dollars on Celebrity brand endorsements and on media (TV, Print and Online). DSC’s core marketing strategy was to introduce witty & funny videos and these videos offered solution to the problems that every man faces & with effective Social Media Marketing, DSC managed to get more number of loyal customers and in fact Dollar Shaving club today has strong 1.1 million subscribers, a whopping $ 615 million valuation in 2015.
According to Michael Dubin somewhere men’s grooming category became too serious when it came to communication and perception, whereas women brands globally were fun, sexy, confident and fantasy based; men also wanted to experience the same and Dollar Shave Club understood this and communicated accordingly. Dollar Shaving Club is YOUNG, SMART, STYLISH & yet PLAYFUL, when you subscribe to the club, you’re not just signing on for low-cost razors and blades, you’re investing money in the monthly ‘delight’ that comes along with it. The brand successfully connected with its consumer at a more emotional level and offered a unique community experience that no other brand in the category was offering till now. When you first sign up for the club, you are get a personalised welcome e-mail that welcomes you into the community, and explains how you can get more out of it. You get monthly newsletters, offer e-mails and most importantly you get secret community jokes. DSC is a BIG HIT on Social Media platforms & successfully generates tons of User Generated Content (UGC) and without fail upload the content on its Facebook and Instagram page. The brand has a blog called ‘blog.dollarshaveclub.com’ where it offers views, tips and DIY ideas with its signature humorous touch.
Dollar Shaving Club managed to break the clutter and capture the imagination as well as market share; & more importantly it gave the consumers much needed solution for a problem faced by all men globally. The brand has also inspired a bunch of companies here in India & now we have similar subscription based concept here also like Bombay Shaving Club, LetsShave.com, CanShave.com and Usthara.com. These are also online models & copy of Dollar Shave Club subscription model; in fact LetsShave.com is selling Dorco razors and blades here.
So, in this war of brands ultimately the consumer emerged as the true winner.
Source: Euromonitor, Wikipedia, www.dollarshaveclub.com, Google
Media Source: www.dollarshaveclub.com, Google, YouTube