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Charlotte Rogers: The razor subscription market is already on the verge of saturation

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dollar shave club

Subscription services are the beating heart of any successful ecosystem brand. From Amazon Prime and Netflix to Deliveroo’s £8 a month Plus service, brands in every industry are realising the importance of getting consumers to commit.

No sector has been more disrupted by the fight for subscriptions than the men’s shaving market. Innovation was once limited to the latest high-tech release from Procter & Gamble’s Gillette, but last year the shaving market exploded with the breakthrough success of online-only subscription brand Dollar Shave Club.

The business model is simple. Subscribe to have razor blades delivered to your door on a monthly basis. Users are able to leave at any time and are promised a 100% money back guarantee if they’re not happy.

Realising that not every man is interested in owning the latest high-tech razor blade, Dollar Shave Club pitched its entry level ‘Humble Twin’ blade at $1 a month (plus $2 for shipping and handling), rising to $9 for the ‘Executive’ six blade razor.

The collection has since evolved to include own-brand shaving butter, post-shave moisturiser, wipes, hair-styling products and toothpaste. Members are incentivised to introduce their friends to the service in order to gain $5 in Dollar Save Club credits.

The online razor market is hitting maturity faster than anyone – including the brands – expected.

Dollar Shave Club launched in 2012 and now accounts for 54% of the US online shaving marketing, according to Euromonitor figures, with rival Gillette claiming just a 21% share. The business model impressed FMCG giant Unilever so much that it acquired the startup for $1bn in July 2016.

Now Dollar Shave Club is finally bringing its brand to the UK. While its shaving and grooming products will not be available for purchase until early 2018, from 27 November British consumers have been able to sign up as the brand’s first UK members.

Saturation point

Despite the burgeoning product mix, irreverent brand identity and engaging social campaigns, Dollar Save Club could have waited too long to play its hand in the UK, a market already nearing saturation with online subscription men’s grooming brands.

Gillette, for example, launched its on-demand service in May, allowing customers to text for a shipment or subscribe to get every fourth order free. The collection ranges from the basic three blade Gillette Mach 3 razor to the advanced Gillette Proshield Flexball five blade razor.

US import Harry’s, meanwhile, launched in the UK in June and went big with an outdoor and digital campaign the following month, positioning itself as ‘shaving’s other guys’. For £2.95 consumers receive a handle, blade, shave gel and a travel blade cover. Following the trial, they are automatically enrolled on a subscription plan, which they can modify to fit their needs.

READ MORE: Meet Harry’s, the shaving startup taking on Gillette

Founded in 2013, Harry’s currently has three million customers in the US alone. As a trans-Atlantic loyalty push the brand encouraged its US consumers to invite their UK friends to sign up in return for early access once Harry’s launched in Britain in July.

These brands are also missing a trick by failing to create a female-focused product or overtly gender-neutral blade.

While Dollar Shave Club and Harry’s have a distinctly American identity, which could fall flat with UK consumers, Cornerstone is a British alternative founded in 2014 and built on £1m of crowdfunding. The brand, which claims to have “tens of thousands” of customers, delivers one box of razors every six to 18 weeks depending on the user’s needs, at a cost of £14. Consumers can add face scrub, shaving gel, shaving cream and a post-shave balm to their order.

And then there’s French razor brand Bic, which in November brought its own Shave Club to the UK, a subscription service of non-disposable, refillable razors. Consumers receive fresh blades on a monthly or bi-monthly based on their shaving needs.

Standing out among all this noise could prove a real challenge. As these brands fight it out on price, subscription model and overall service, they are also missing out on another potential revenue stream by failing to create a female-focused product or overtly gender-neutral blade.

The subscription-only blade brands are also vulnerable to consumer demand for electronic shaving devices. This trend was highlighted in P&G’s fourth quarter results, which showed that while organic sales in the grooming sector have fallen 1% due to “reduced pricing in shave care”, the company experienced double-digit organic sales growth for its electric shaving appliances.

Furthermore figures from data analytics company 1010Data suggest that since the Unilever acquisition Dollar Shave Club’s sales have flatlined, with customer acquisition and retention also slowing. While the brand itself dismisses these statistics, the data could suggest that the online razor market is hitting maturity faster than anyone – including the brands – expected.

Creating a distinct proposition, differentiated by branching out into gender neutral alternatives and a wider product mix, could help brands like Dollar Shave Club, Harry’s and Gillette stave off saturation and ensure that consumers on both sides of the Atlantic continue to renew their subscriptions.

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Digital

JWT partners with University of Sydney to explore tech-driven creativity

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J. Walter Thompson has formed a partnership with the University of Sydney to explore how technology can be applied to the creative process and develop creative solutions for digital transformation in China.

The partnership will kick off in December 2018 with an Industry and Community Project Unit (ICPU), that will see 16 University of Sydney students from interdisciplinary areas form small teams to develop creative, ethical and context-sensitive solutions over four-week intensive courses. The University introduced ICPUs earlier this year, to provide units of study based on authentic problems and issues set out by industry, community and government organizations.

Students will be based in Sydney for the first week, where they work through the project brief, background research, and information, as well as country information. They then undertake intensive targeted research with their project groups. During weeks two and three, students will work in Shanghai with JWT China.

The final week will be spent back in Sydney, where they write up their assessment task and undertake interactive workshops to encourage critical reflection on their experience and transferability to career development.

“Ultimately the partnership will work towards what actions creative agencies can take now to deliver efficiencies across their business, and to ensure creativity is able to effectively adapt to the implementation of artificial intelligence and new technologies,” said Carter Chow, the chief executive officer of JWT China.

“We're particularly interested in exploring the connection between human and machine learning and how this will change roles in the future. We hope this is the start of many innovative and future-facing topics that both JWT China and the University of Sydney can work together on solving for the creative industry.”

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Circles.Life unveils Discover, its new AI-powered lifestyle feature

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Digital telco Circles.Life has launched an AI-powered feature called Discover in its app to allow customers to explore interesting events happening around the city.

According to the Singapore-based telco, the more Discover is used, the smarter it gets in recommending events that users are most likely to go to. This new feature, which is personalised based on the interests of individuals is available for everyone, including users who are not Circles.Life’s mobile customers.

It is optimised for local events in Singapore, enabling users to explore trending events in the country, customises the event suggestions based on the users’ interests and allows users to share the events on social media, and invite their friends.

“Circles.Life is setting up the world’s most personalized digital platform leveraging its innovative telco stack and proprietary data platform,” said Rameez Ansar, the co-founder of Circles.Life.

“Two years after the launch of what is now the leading no-contract mobile service in Singapore, we are taking a step further. Discover is the first AI-powered product outside our core mobile service. It is available for ALL users inside the Circles.Life app!”

Last month, in an attempt to get consumers to re-evaluate the value of a mobile contract and challenge the assumption that it always saves them money, Circles.Life explained to The Drum why it used the country’s favourite food, chicken rice, to prove its point.

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10 questions with… Carter Murray, chief executive of FCB

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The Drum speaks to people across the global media and marketing sector who are bringing something a little different to the industry and talks to them about what little insights they can offer the rest of us. This week's 10 Questions are answered by FCB chief executive, Carter Murray.

What was your first ever job?

My first ever job was cleaning boats. My first proper, steady job, however, was as an assistant account executive at Leo Burnett Chicago.

Which industry buzzword annoys you most?

“Guru” (as in “marketing guru”). Most people called gurus actually are not. And this misnomer often causes havoc within client organizations and the creative process more generally.

Who would you most love to share a coffee with?

My mother and father. I lost them both two years ago, within six months of each other, and still miss them terribly.

Highlight of your career (so far?)

The first was getting to work with Harry MacAuslan, THE gentleman of advertising (now retired) and the second was persuading Susan Credle to come to FCB and be my creative partner.

What piece of tech can you not live without?

Sadly (and my wife will very much attest to this) – it's my bloody telephone.

What is (in your opinion) the greatest film/album/book of your life?

Power of One, by Bryce Courtenay. I read it when I was thirteen and it absolutely got to me. I loved the boxing, wildlife, Africa and personal narratives, but most of all, the constant reminder to “think first with your head and then with your heart.”

What one question do you never want anyone to ask you?

Why are you so obsessed with dim sum?

Best advice you ever heard or received?

Shut up and listen.

What do you still want to achieve in your career?

Balance.

What industry event is most important to you to attend and why?

Cannes. It saves me multiple trips around the world, as everyone is centralized there, and I get to talk about our industry with some of the most groundbreaking work all around us, to inspire and push us to always do better. It’s always long and busy work hours, but it all happens in a ridiculously civilized setting.

Check out other interviews as part of the 10 Questions With… series.

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