Connect with us

Marketing

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

Published

on

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.

All copyrights for this article are reserved to Marketing Week Live

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Marketing

UK programmatic ad spend to surpass £3bn in 2017

Published

on

How UK programmatic ad spend will rise over the next two years in £bn

By the end of 2017, UK advertisers will have spent £3.39bn on programmatic advertising, up 23.5% compared to last year, according to a new report from eMarketer.

Programmatic spend now represents 79% of all UK digital display ad spend, with this proportion expected to reach 84.5% by 2019. Predictably, mobile continues to be a major growth driver, accounting for 78% of total programmatic digital display ad spend in 2017 – this figure is forecast to climb to 86.5% by 2019.

By comparison, the programmatic numbers for desktop are on the decline. Just 22% of programmatic ad spend, or £743.8m, will be spent on desktop this year, and this figure is expected to fall 13.5% to £609.5m in two years’ time.

By 2019, the total UK spend on programmatic advertising is expected to more than doubled from £1.99bn in 2015 to a much larger £4.52bn. But despite programmatic’s meteoric rise, not everybody remains convinced.

Marketing Week columnist Mark Ritson has linked the rise in programmatic with brand safety issues at the likes of YouTube. And speaking at this year’s Festival of Marketing, Lidl’s head of media Sam Gaunt said the marketing industry is “guilty of overselling programmatic”.

“For all the debate around fraud and viewability, the reality is programmatic is very expensive,” he said. “It’s a premium media. When you stack up the cost of it with traditional media and then weigh up the impacts, it can be hard to justify. You also have no idea where your advertising will end up.”

However, eMarketer’s senior analyst Fisher insists the marketing industry is making positive strides to win back trust from advertisers. He concludes: “The programmatic ecosystem is growing because it’s maturing.

“This maturation is leading to better practices, better behaviour and better transparency. Making everybody in the chain accountable is the next step in cleaning up programmatic’s image further and helping spend rise further.”

All copyrights for this article are reserved to Marketing Week Live

Continue Reading

Marketing

Pro skier Julian Carr crowdfunding Super Bowl ad to raise global warming awareness

Published

on

Pro skier and entrepreneur Julian Carr has launched a crowdfunding campaign on Kickstarter in hopes of raising the $5.5m needed to buy 30 seconds of air time during Super Bowl LII.

Carr, who is an ambassador for nonprofits Protect Our Winters and the Climate Reality Project, plans to air an ad about global warming if he raises the necessary funds. He’s tapped San Francisco’s Goodby Silverstein & Partners to help him produce the spot, which has agreed to create it pro bono.

According to GS&P, Carr was inspired to create the ad after President Trump announced his plans to withdraw the US from the Paris climate agreement, which aims to prevent global temperatures from rising more than two degrees Celsius above pre-industrial levels.

“America is the biggest polluter in history. Yet only one in eight Americans know there’s a consensus among the scientific community that global warming is caused by humans,” said Carr in a statement. “Together, we can raise awareness in front of 110 million Americans about global warming and let our people know what’s at stake. Because only when we acknowledge the problem can we truly fight it.”

His Kickstarter page says that those who contribute are paying not just for a "large audience," but for "silent focus."

"We are paying for silent focus: Tens of millions of people quietly watching Super Bowl commercials and actually talking about their favorite moments of corporate branding," the page states. "We are paying for exposure: Super Bowl ads are watched and re-watched – on Twitter, on Facebook, on YouTube, and on next-day rankings and analyses across the internet."

The page also states that the project will only be funded if Carr raises the $5.5m by Dec. 22. He plans to spend $5.2m on the production of the commercial, leaving the remaining $300,000 for Kickstarter fees.

All copyrights for this article are reserved to The Drum

Continue Reading

Marketing

Google’s new custom intent audiences and you

Published

on

In mid-November, pre-empting the hellish holiday shopping season, Google unveiled a slew of new features designed to help advertisers maximize their AdWords budgets. While promotion extensions and ad variations are neat and all, the thing I’m most stoked about is the new custom intent audiences feature on Google Display Network (GDN).

If you haven’t checked out Ginny Marvin’s quick summary of what they are (linked above), here’s the gist: Custom intent audiences offer advertisers the opportunity to use the GDN to find “people who want to buy the specific products you offer — based on data from your campaigns, website and YouTube channel.” They come in two distinct flavors:

  • Create-your-own. Like a trip to your favorite pizza chain (but for the GDN), you can mash topics and URLs together like mushrooms and pepperoni in order to target net-new prospects who are probably into your product or service.

[Read the full article on Search Engine Land.]

All copyrights for this article are reserved to Marketing Land

Continue Reading

Trending

Copyright © 2017 Marketing Industry News