Shaving is big business. In 2019, men in the U.S. spent $454.6 million on just shaving cream. Big brands like Gillette continue to make waves with innovative marketing campaigns, and subscription-based, direct-to-consumer (DTC) shaving brands have been hugely successful. However, a recent FTC ruling blocking the sale of Harry’s to Edgewell Personal Care, which owns Schick and other shaving brands, presents an interesting development for brands that want to grow in this competitive sector.
The ruling from the FTC stated that the acquisition “would eliminate one of the most important competitive forces in the shaving industry. The loss of Harry’s as an independent competitor would remove a critical disruptive rival that has driven down prices and spurred innovation in an industry that was previously dominated by two main suppliers, one of whom is the acquirer.”
The FTC considers Harry’s “among the few significant competitors in the U.S. market for the manufacture and sale of men’s and women’s wet shave razors,” which could explain Harry’s being singled out when other similar brands were acquired without a problem. In addition to the perception that Edgewell is trying to consolidate a lock on the shave market, the fact that Harry’s is in Target and Walmart with other competitors makes it a more influential brand.
The blocked sale of Harry’s also indicates that DTC disruptors may no longer be considered niche products, but formidable brands in their own right. Several other subscription shave brands, after making names for themselves with unique, innovative branding and products, have been acquired by large, well-known brands.
Billie Was Created By Women For Women
In a world of shaving subscriptions for men, Billie was launched by a woman for women. Billie’s “female-first” messaging that took aim at the “pink tax” many women inadvertently pay for items like razors and razor blades set them apart in an industry dominated by the needs of men. (Billie also donates 1% of their revenue to Every Mother Counts, a charity focused on making pregnancy and childbirth safe for women around the world.)
Billie wanted to create a product that solved the complaints women had about shaving, including cost, convenience and design. “Through [Billie’s] research, we learned that razor blades that weren’t completely surrounded in soap often caused razor burn, that the suction cups on razor holders always fell down in the shower and that women were livid at the fact that women’s razors were more expensive than men’s razor. These insights quickly gave us an action plan for innovation,” said Billie co-founder Georgina Gooley. Billie’s marketing efforts have ramped up over the last year, with a distinctly feminist, body-positive focus.
In January 2020, Procter & Gamble (P&G) announced it was acquiring Billie for an undisclosed sum, although some industry insiders speculate that Billie was likely in the midst of raising another round of financing and found it easier to land at P&G, letting the original founders of Billie still manage the brand while gaining a much larger purse to play with.
Dollar Shave Club Was At The Frontier Of The DTC Shaving Businesses
Dollar Shave Club launched in April 2011 at the beginning of the surge in subscription boxes. The brand was created in response to the cost of razors, and Dollar Shave Club hit the ground running with 5,000 subscribers the first day and a cheeky, irreverent marketing approach that quickly went viral.
By the time Dollar Shave Club was acquired by Unilever for $1 billion, Dollar Shave Club was, in the words of founder Michael Dubin, “a full-scale men’s club — a subscription-based grooming brand with personality, that men actually identify with.” The brand had begun offering a full range of men’s products and, five years after launching, dominated more than 51% of the online razor market, clocking $250 million in revenue.
A true industry disruptor with many like-minded brands to follow, including Harry’s, Dollar Shave Club became perfectly poised for Unilever to snap up, expand Unilever’s footprint in the razor market and compete with P&G. Dollar Shave Club currently boasts more than 4 million members.
The Razor Wars Have Evolved As Subscriptions Have Grown More Popular
Subscription-based DTC brands have made a huge impact on the traditional consumer packaged goods (CPG) market, and based on the FTC ruling stopping the sale of Harry’s, DTC razor brands are now seen as worthy competitors in the grooming marketplace, expected to stand on their own two feet without the assumption of an acquisition or merger. How this FTC decision will impact future start-ups remains to be seen, but brands should continue to differentiate what makes their products unique additions to the market and create innovative multichannel campaigns that encourage brand loyalty.
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