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
Comments

Digital

Kantar Media names Louise Ainsworth as EMEA CEO

Published

on

Kantar Media has announced that Louise Ainsworth has been appointed chief executive of EMEA, effective June 25.

Joining directly from her present role as chief executive of Kantar Millward Brown, Ainsworth brings a wealth of experience in digital media, audience measurement, brand management and communications in tow.

Andy Brown, global chief executive and chairman of Kantar Media said: "I am thrilled to welcome Louise to Kantar Media.

"Her rich experience in digital and the changing media ecosystem is widely recognised across the industry and will be a considerable asset for Kantar Media and our clients alike.”

Ainsworth added: "Our clients are facing more change and disruption than ever before – Kantar Media’s unique scale and breadth of high quality data sets are well-placed to help our EMEA clients convert the challenges they face into valuable opportunities.”

Upon arrival Ainsworth will sit on the Kantar Media executive committee, reporting directly to chief executive and chairman Andy Brown.

Ainsworth previously served as chief executive of WARC.

All copyrights for this article are reserved to The Drum

Continue Reading

Advertising

Unilever taps WPP agencies to educate its startups as part of in-house collaboration

Published

on

Unilever has announced a partnership with WPP that will see the network's agencies work with the startups under the FMCG’s giant's Foundry programme in Singapore.

Unilever hopes the collaboration will lay the foundations for the marketing services ecosystem of the future and bring key external marketing expertise, in-house.

David Porter, Unilever’s vice-president of media for Asia, Africa and Russia said the partnership was an "in-sourcing" model, adding that the group was "looking at a number of was to bring external marketing services closer" to Unilever staff.

​The move from Unilever to work with WPP comes amid ongoing agency cuts in the FMCG space. Last year alone, Unilever was able to invest an additional €250m into media buying and in-store advertising after slashing the number of agencies it worked with and bringing certain elements of its marketing mix in-house.

The fresh collaboration will now see the likes of Ogilvy, Mindshare and Wunderman, work alongside startups, such like Celtra, Unruly and Viddsee at Unilever’s Level3 co-working space in Singapore.

It will be led by Sudipto Roy, managing director for media and data, and Team Unilever for Asia, Africa, Russia.

“We have taken a fresh approach to the ‘Team WPP’ design. Instead of designing around the brand or the category, we have designed around capabilities and intelligence in order to solve business problem,” explained Roy.

“We have access to cutting edge technology and new products across every pillar of the Unilever marketing framework through the startup community in Unilever Foundry. We look forward to collaborating with them to deliver breakthrough models, communications and consumer connections products.”

Unilever Foundry also unveiled a new advisory board for Level3 in April, naming the likes of Rajan Anandan, vice-president of Southeast Asia and India at Google, Daryl Arnold, chairman of Newton Circus, Maximillian Bittner, founder and advisor of Lazada as new board members.

All copyrights for this article are reserved to The Drum

Continue Reading

Advertising

After #MeToo, C4’s £1m Diversity in Advertising award to focus on ‘portrayal of women’

Published

on

Channel 4’s ‘Diversity in Advertising’ competition has returned for the third year, this time asking advertisers to focus on how women are portrayed.

The initiative offers £1m of free airtime to any advertiser who best responds to a brief set by the broadcaster. In 2016 it was the representation of disability, won by Mars, and then non-visible disabilities which was won by Lloyds Bank in 2017.

In light of the #MeToo movement, the centenary of the right to vote and the focus on gender pay gaps, Channel 4 said it wanted ad creatives to create campaigns which would “challenge engrained stereotypes, objectification and sexualisation of women”.

A recent study found that there are twice as many male characters in adverts than female characters and that when women do appear, they are most likely to be younger (in their 20s, compared to men who are in their 20s, 30s and 40s).

“There are campaigns already on our screens which represent women in a positive and appropriate manner – but sadly there just aren’t enough of them,” said Channel 4’s head of agency and client sales and commercial marketing Matt Salmon.

“This year we’re looking for an ad that really stands out even from the positive ads we’ve seen before. We want a campaign that’s a beacon for the issue, an idea that calls out the challenges and makes a really positive statement to our audiences.

“The winning ad shouldn’t be representative of what the future ‘norm’ should be, it should act as a catalyst for the change in mindset we’d like to see within the industry.”

The deadline for this year’s entries is 9 July 2018. A shortlist will be announced on 17 July before the winner is announced in September and the campaign will be on air in early 2019.

All copyrights for this article are reserved to The Drum

Continue Reading

Trending

Copyright © 2017 Marketing Industry News