Upstart shaving companies are hoping to disrupt Father’s Day with cheaper and more innovative ways to buy razors. For decades, the $2.95 billion shaving market has been dominated by two industry giants: Proctor & Gamble’s Gillette brand and Schick, which achieved success byselling cheap razors and expensive replacement blades.
But just because these corporations successfully locked in customers didn’t mean that those customers were happy. Missing that crucial business lesson opened the door for disruption.
In 2012, Dollar Shave Club stepped through that door with a wacky YouTube video inciting viewers to say so-long to high-priced razor cartridges and try its affordable blades, starting at $1 a month. The video went viral with 15 million views, and its irreverent slogan – Our Blades Are F***ing Great – was as simple and direct as its subscription-based e-commerce model.
The mid-sized company that CEO Michael Dubin – a former improv student — started in his apartment with $35,000 now has 650,000 customers paying $1 to $9 a month for razors and blades, and expects to bring in $60 million in revenue this year — triple its 2013 sales, reports BusinessWeek.
It’s not coincidental that both Dollar Shave Club and fellow upstart Harry’s Razor Company both began with irritated customers. On the West Coast, Venice Beach-based Dollar Shave Store began when Dubin and his co-founder Mark Levine were complaining about overpriced razor blades at a party.
On the East Coast, Harry’s was also started in 2012 when Warby Parker founder Jeff Raider and his co-founder Andy Katz-Mayfield had a bad drugstore buying experience that led to a griping session. “I told Jeff that I felt I’d been ripped off by the price of the blades, and that the marketing didn’t speak to me at all with these futuristic, turbo-charged images of razors flying over the moon,” Katz-Mayfield told USA Today.
Harry’s, which also sells affordable blades, focuses on fine-tuned quality compared to Dollar Shave Club’s fun. Earlier this year, Harry’s spent $100 million of the $122.5 million it raised in funding to buy a 93-year-old German manufacturer of quality blades called Feintechnik.
Making its own razors and blades gives Harry’s more control over its business, including the ability to make customer-suggested improvements that create loyalty. Like Warby Parker and many other mid-sized businesses known for their sustainable models – Harry’s also gives back by donating one percent of its sales to a non-profit.
For Father’s Day, Harry’s is selling a father-son razor set (with a toy set for the junior shaver), while Dollar Shave Club has released a new set of humorous videos to teach older Dads “What Not to Click” on the Internet.
Meanwhile, the big guys are fighting back. Gillette recently introduced its ProGlide FlexBall razor, and plans to spend $200 million to promote its new product, despite some critical reviews — and a comparison of the product to duck genitalia.
But the move may not be enough to stop the disruption. While Gillette is fighting back with a new razor, both Dollar Shave Club and Harry’s are expanding into the $6 billion men’s grooming market, with shave creams, lotions and even toilet wipes.
Dollar Shave Club launched a new line of guys’ grooming products this year, including toilet paper alternatives dubbed “One Wipe Charlies” that sell about 1,000 packages a day, says Dubin. Harry’s makes its own shaving cream and offers other grooming products as well.
By ignoring men’s gripes and grooming needs, shaving corporations have enabled mid-market disruptors to change the way men shave – and maybe the way we shop for Father’s Day too. It goes to show that keeping the customer happy is a lesson that never goes out of style.