DOLLAR SHAVE CLUB 2.0: ONCE THE BRAND OF BROS, THE RAZOR COMPANY EYES A NEW COMPETITIVE EDGE.
If expanding its brand identity seems like a logical next step, it's also a necessary one. In 2016, pre-acquisition, Dollar Shave claimed 48.6 percent of the online razor market and today still commands a 50 percent share in sales, according to data from Slice Intelligence. But Dollar Shave was (and still is) facing competition from other upstarts. Products by Walker & Company's Bevel--founded in 2014 as a grooming brand dedicated to men of color whose specific shaving needs weren't addressed in the industry--were carried by Macy's earlier this year, though the company has raised only $33 million so far (Dollar Shave raised $163 million before being acquired). Billie, a women's shaving company that aims to combat the "pink tax" (a levy on women's products), has raised $6 million. Then, there's Harry's, which bought its own factory to produce razors and other products and has raised a total of $474 million. Harry's even has a "minority stake" in Hims, a startup that originally began as a male hair-loss-prevention company but has pivoted to men's wellness, and has raised $97 million so far.
Harry's quest for dominance doesn't end with Hims or its factory. The company's had several third-party relationships with retailers like J. Crew since 2014, but in 2016, Harry's inked a deal to get shelf space in every Target store (as well as online). This past May, Harry's furthered that retail footprint by landing in 2,200 of Walmart's U.S. stores--along with an exclusive razor in Walmart's colors. Dollar Shave, however, has no plans to enter this space.
"Right now, our focus is on building a direct relationship with our consumer, and we're always evaluating options to maximize and deepen that connection with our customers and members," says Michael Dubin, Dollar Shave's founder and CEO. "Everything's on the table, but as of this moment we don't have plans to be in mass retail."
Meanwhile, there are signs that men's grooming trends are shifting slightly from shaving. New data from Gillette reveals that men are shaving less often--3.2 times a week, down from 3.7 in the past decade.
To maintain a competitive edge, it was probably inevitable that Dollar Shave would have to make some significant changes. With "Dollar Shave Club 2.0, we're focused on head to toe," Dubin says.
"Our mission at Dollar Shave Club is to help guys take care of their minds and bodies so they can be their best selves," he says. "We are approaching that mission in two ways: with great products for your body and great content for your mind."
Those products include Dollar Shave's skin-care line and body washes introduced in 2016, hair creams, toothpaste and toothbrushes. Content ranges from branded pieces with advice on how much to tip a barber to Mel, a print magazine that is sent to customers as part of their subscription every month, as well as online material. Mel's content reaches into the depths of internet culture, features personal essays (including one on clean bottoms--butt wipes are a DSC 2.0 product) and even does some serious reporting--such as a piece on men with HIV living in Iran. Dubin says the branded content will help the company drive engagement, and Mel is intended to "achieve critical success" for the budding lifestyle brand.
"We think it's very important for Dollar Shave Club to speak more broadly than just personal care, grooming advice or tips or anything that's closely related to the product because we're trying to achieve a broader mission than just helping take care of your body," Dubin explains.
In July, Dollar Shave released a new ad campaign dubbed "Get Ready," a video almost four minutes in length that shows men--and women--starting their day, from a drag queen shaving his legs to a woman shaving her head. There's even a short cameo of Dubin stuffing his underwear with toilet paper. The spot is a push toward making the brand seem more inclusive, growing up from the bro attitude of its first original ad that brought the company success in 2012. Alec Brownstein, vp of creative at Dollar Shave, says he thinks the spot is "flexible enough" to be used continually as the company announces new products or categories.
"We're not trying to make any sort of specific points about any specific groups, but rather just sort of invoke that the club is a place for all of them, and as long as you're willing to put in a little effort to look and smell your best, we welcome you to the club," Brownstein says.
That's not to say Dollar Shave isn't trying to dig deep into the direct relationship it has with its customers.
"We want to know as much about that member as possible: what their concerns are, what their grooming practices are, so we can not only develop products that are right for them but also make the right recommendations for them," Dubin notes. "Absolutely, we want to develop products that solve specific problems or address specific concerns for people, whether it's people of color or for everyone."
"When Dollar Shave Club started, they were able to effectively find a new customer base, allowing them to spend more than competitors like Gillette and really tap into online communities to do that," says Anagha Hanumante, senior intelligence analyst at CB Insights. "But it's really about the recurring revenue model, having high retention, keeping customers on board, having customers refer new customers because they like the product and service, [and] reducing customer churn."
While much of the focus around Dollar Shave's acquisition was questioning how much Unilever would get involved, Alan Jope, president of beauty and personal care at Unilever, says the company has remained autonomous and will continue to do so. If anything, Jope says, Unilever will learn from Dollar Shave, particularly as the brand's marketing and advertising become more "precise" with "relevant messages."
"Dollar Shave Club's whole way of doing business is iconic for the direction that we want to take with Unilever's marketing," Jope says. "It's a model, it's a representation, it's a lighthouse for the future of marketing, which we think has a very broad application across Unilever."
Being under the corporation's umbrella has meanwhile empowered Dollar Shave Club to use product IT and supply-chain capabilities and to mine Unilever's grooming research, both internationally and domestically.
"The strategy is that Dollar Shave Club will have its own custom, developed line of products that will use Unilever's best technologies," Jope says. "We're very light-touch governance, and we trust the Dollar Shave Club team to run the business."
Though Dubin declined to reveal any key performance metrics that would indicate whether the acquisition has been a success so far, analysts in the industry don't think Dollar Shave's expansion of products or new messaging will hurt the company in the long run.
"With Dollar Shave Club, you're seeing them [stay] very true to their quirky brand and style and ultimately diversify their product offering and perhaps provide more value in a tangential way," says Travis York, CEO of GYK Antler. "It's a logical product extension that's entirely in line with what their original brand and business model was. Clearly, what they're benefiting from is producing all those things cost-effectively and the distribution to scale it effectively."
As consumers overall become less loyal, the brand's subscription model will also continue to be an asset both to it and Unilever, says Michael Sharp, CEO of creative agency Standard Black. But Dollar Shave Club will still need to evolve.
"What they need to try and do is capture that changing definition of masculinity and realize that men come in many different shapes and sizes," Sharp notes. "With subscription [models, it's] thinking about how you fit into a customer's life, and that subscription needs to be personalized to who that person is. That is a huge challenge that Dollar Shave Club will have to overcome because they put themselves into this archetype of this very specific customer, this very specific guy."
BY ANN-MARIE ALCANTARA
ANN-MARIE ALCANTARA IS A REPORTER FOR ADWEEK, FOCUSING ON ECOMMERCE. @ITSTHEANNMARIE
Caption: HEAD TO TOE: (Far left) In July, Dollar Shave released a new, inclusive ad campaign dubbed "Get Ready" that goes beyond blades; Dollar Shave founder. CEO Michael Dubin (left).
Please Note: Illustration(s) are not available due to copyright restrictions.
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|Date:||Sep 24, 2018|
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