As men who shave, we’ve been taught to accept a few undisputed truths: there are two brands of razors; the more blades the better; and refills are ridiculously expensive.
Well, the walls around Schick and Gillette are crumbling. With start-ups going after every industry under the sun, leading Marc Andreessen to famously proclaim that software is eating the world, not even the shaving juggernauts are safe.
They were up until three years ago.
That’s when a satirical video from a Southern California company called Dollar Shave Club, hit YouTube and went viral by asking the question: “Do you think your razor needs a vibrating handle, a flashlight, a back scratcher and 10 blades?”
The video has been viewed almost 19 million times and not only kick-started Dollar Shave Club but spawned a whole subscription shaving movement.
Razor blades can now be sent to your doorstep monthly or with less frequency from emerging brands such as Harry’s, Bevel and ShaveMOB. So preferable has this new model become and so much money have the challengers raised (around $300 million combined) that Gillette has recently turned on its own subscription offering.
But this movement is about much more than just Amazon.com-like convenience and Netflix pricing. It’s about personalization, branding, Internet marketing and building relationships with customers, all via virtual storefronts.
When was the last time you heard a guy rave about his razor?
“I love telling people that I use this stuff,” said Steven Murphy, a freelance video producer in St. Louis who switched to Dollar Shave Club from Schick about a year and a half ago and now pays $6 every two months for four cartridges. “There’s this thumbing their nose at the rest of the industry, and they have a sense of humor about it that I absolutely love.”
The Dollar Shave Club ads are humorous. One shows a man in a pharmacy getting shocked by a security guard for wanting to get blades that were locked behind a glass case.
But shaving is, quite literally, a sensitive matter. Razor burns and bumps, ingrown hairs and frequent cuts are the result of mass-market products that treat all skin as if it’s the same. Close shaves are great, except when they create painful, unsightly blemishes.
Dollar Shave’s razor strategy
You don’t have to tell that to Jonathan Walton, a professor at the Harvard Divinity School in Cambridge, Massachusetts. As an African-American with coarse, curly hair, Walton has been perpetually plagued by burns, itches and bumps, whether because of blades that damage his skin or razorless cream that’s painful to use.
Six months ago, he discovered Bevel, the brainchild of former Foursquare executive Tristan Walker, who came up with the idea while working as an entrepreneur in residence at venture firm Andreessen Horowitz. With a $30-a-month subscription that includes a safety razor, blades, creams and a brush, Walker is targeting people just like Walton, who said he now enjoys shaving, enough to even tweet about it.
“I have for my entire adult life struggled with razor bumps and wanting to shave,” said Walton, echoing a sentiment that Walker has heard repeatedly since launching Bevel in 2013. “Now I’m able to get a close shave, and my skin feels good. I’m not walking around either itching and in pain because of bumps or with my skin feeling real sensitive because I had to leave the cream on long enough to get the hair out.”
U.S. manufacturers of razors, blades and replacement cartridges generate annual revenue of around $2.6 billion, with Schick and Gillette controlling about 80 percent of the market, according to a December report from researcher IBISWorld. Then there’s all the money consumers spend on shaving cream, aftershave and, of course, visits to the dermatologist.
Removable heads alone generally cost $3 to $5 apiece, leading shavers to abuse their blades and, by extension, themselves.
Make way for the new kids
That has opened the door for new brands to elbow into the market with a new take on razors, and then tack on lotions, creams and wipes.
IBISWorld illustrates the landscape quite clearly: “This business climate has enabled start-up businesses, such as Dollar Shave Club and Harry’s, to disrupt the market for razors,” the report said. “Both companies offer consumers relatively inexpensive subscriptions to razors and replacement blades, introducing significant competition to shaving giants Gillette and Schick for the first time in decades.”
Once they’ve turned previously disgruntled shavers into brand enthusiasts, why not take advantage of that loyalty to enter new realms?
In March, Dollar Shave Club entered the hair care category with five different products, including a gel, paste and cream, under the brand Boogie’s. Bevel, meanwhile, is just the debut brand for Walker & Co., a company that’s out to “make health and beauty simple for people of color,” according to its website.
They want to be new lifestyle businesses that bring people in the door by addressing a specific problem—shaving—and turn those consumers into ready and willing buyers of the next great idea. That, along with brand evangelism on Twitter, Facebook and from friends telling friends, can make an individual customer highly valuable beyond just a transaction or two.
“We started with razor subscriptions, and ultimately that will be one piece of a larger set of opportunities to solve guys’ problems,” said Michael Dubin, CEO of Venice, California-based Dollar Shave Club, and a lead character in its commercials. Hair products “are really challenging for guys, too. They get recommendations from friends whose hair is nothing like theirs.”
Based on shaving products alone, Dollar Shave Club has attracted 1.7 million members and reached annual revenue of $120 million. That’s all with shipments starting at $3 a month for five, two-blade cartridges.
Harry’s, based in New York, was co-founded in 2012 by someone who knew all about creating a consumer start-up brand in an old, staid market. Jeff Raider had spent the previous three years with eyeglass maker Warby Parker, which started as a Web brand and now has stores and showrooms in 13 U.S. cities.
Raider joined with fellow entrepreneur Andy Katz-Mayfield and set out to create a shaving business that ended dependence on outside suppliers. They bought a German blade manufacturer for $100 million, thanks to a boatload of venture funding. Harry’s shipments range in price from $3 a month for blades to $19 for blades, gel and aftershave.
“By owning the entire process (from grinding steel to sending packages to people’s doors) we can deliver people amazing products at a fraction of the price of the big guys,” wrote Katz-Mayfield, in an email. “All the while improving their overall purchasing experience.”
Procter & Gamble, the consumer giant that owns Gillette, has taken note. Last year, the company introduced a subscription cartridge service available on its website, starting at about $4 per month. While a Gillette subscription was available years ago via Amazon, it was hardly promoted.
A spokesman for Gillette declined to comment on the competition, but did say in a statement that, “Our approach allows a man to shop from a wide selection of their favorite retailers and also determine the frequency of delivery that fits his needs.”
But subscription commerce, whether from a start-up or legacy brand, isn’t a cure-all. Brands like Shoedazzle shined then fizzled trying to get women to buy shoes every month, and Beachmint failed in its effort to turn celebrity fashion recommendations into a subscription business.
Kirsten Green, formerly an equity analyst covering retail and now founder of e-commerce venture firm Forerunner Ventures, has been pitched every subscription business under the sun. She passes on almost all of them because the experience is unnatural and gimmicky once you get past the novelty.
Bevel shaving system
Shaving is different because it’s so routine. With something that naturally lends itself to subscription commerce, the model can be highly lucrative, Green says. In addition to generating recurring revenue, businesses are constantly getting feedback on what works and what doesn’t.
“The best ones understand the benefits of the direct relationship with the customer and the insights they gain and data they gain,” said Green, whose San Francisco-based firm bet early on Dollar Shave Club and also backed brands like Warby Parker and Birchbox. “We can use all that information to make decisions about where we prioritize finding customers and what messages we use.”
Bevel has spent virtually no money on marketing. It doesn’t have to with celebrities like rapper Nas, who’s an angel investor in Walker & Co., touting the brand to his 4.36 million Facebook fans. Quincy Acy, a forward with the New York Knicks and owner of one of the most recognizable beards in the NBA, also promotes Bevel on social media.
“We have a lot of celebrities who use our product, because a lot of them have had these issues” with bumps, burns and the like, said Walker. “They wake up the next morning after using it and nothing bad has happened, and they preach it from the mountaintop.”
Reprinted by permission.
Image credit: CC by Barney Bishop