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How The Dollar Shave Club Reinvented Retail

On the whole – payments and eCommerce is a fairly serious place, which is reasonable given the very serious sums of money at stake. However, when it comes to connecting with consumers, sometimes a light touch is what is called for – especially if one’s stated professional goal is to “own the bathroom.”

Which venture-backed Dollar Shave Club CEO Michael Dubin says is exactly what his firm is aiming to do – one new member at a time. Because Dubin very seriously thinks his firm can actually fix a problem that he thinks is plaguing millions of American men – the hassles associated with getting the stuff men need to shave.

“The problem that we’re solving at the very basic level, and that we have been very focused on for the last couple years, has been that razors are really expensive in the store. It’s even a frustrating experience to go and buy them,” Dubin told Fortune. “You have to drive there. You have to park your car. You have to find the razor fortress. It’s always locked. You have to find the guy with the key. He’s always doing something else that he doesn’t want to be helpful.”

And then, at the end, the consumer gets to pay about $25 for a four pack of blades. And with such a large segment of captive consumers, shaving is actually big business. The global market for all shaving products is forecast to top $33 billion by 2015, according to Global Industry Analysts. The bulk of that money is in replaceable blade cartridges – and that market is 90 percent controlled by Gillette and Schick.

Now, if the new word of the day, “lumbersexual,” is taken as any sort of evidence, many men have just quit the shaving gig entirely and adopted a new life of competitive beard growing. Yet, Dubin decided to make a serious effort to disrupt shaving, first with a very novel business model – a subscription model which rings the recurring revenue cash register by selling razors for $1 to $9 a month.

And, secondly with some very funny ads.

“I spent about $4,500 on it. I wrote it. It was directed by a friend of mine who I had studied improv comedy with in New York when I lived there for about eight years,” Dubin noted.

Those ads were successful – arguably too successful at first for the fledgling company. The site initially crashed due to interest in the viral video, and stock sold out in six hours. The company also shouldered through the brute work of eCommerce such as actually mailing out orders – which turned out to be more arduous than initially planned for.

“We were printing labels in the office and using the incredibly sophisticated “trash bag” method for transporting them to our fulfillment center. It was an intense time, I mostly remember it in my nightmares,” Dubin noted.

The company shouldered through, and by 2012 had taken in $4 million in revenue in 2012- a number that had grown to $65 million in 2014.

“We’re very quick, we’re very affordable, and we’re very fun; that’s the part Amazon misses,” Dubin noted. “We know how to talk to our members.”

And that sense of fun is going to be important – because, as Dubin notes, they are seeing increased interest in competition as their business model is drawing more consumers away from the checkout line in favor of a simple subscription. Amazon offers razors as one of many consumers goods that can be ordered on subscription for a discount, Gillette launched a competing service a little over a year ago and competing startups like Harry’s or 800Razors offer a similar value –  razors for cheap, delivered regularly.

And though Dubin does notice the space is getting more crowded – he is says he is not worried.

“We’re very good at emotionally connecting with our customers. People really feel like we built this business for them.”

And Dollar Shave Club is certainly always expanding the bounds of connecting with their customers – Dubin recently live-streamed his colonoscopy to raise cancer awareness.

And sell wet wipes.

Because as Dollar Shave Club is growing, it is expanding its ambitions past shaving alone to touch on the full range of consumer needs. Subscriptions have three choices for blade level ($1 a month for basic, $9 a month for “The Executive”) and can also be customized further with goods like shaving cream or moisturizer.

The site is also moving away from shaving to take on more of men’s personal hygiene with wet wipes (billed on their website as the “soft, clean, manly way to wipe”) and, most recently, hair products.

“On the products now, there’s language that guys aren’t necessarily used to: there’s pomade, which can mean any number of things, and it does mean different things across different brands. They’re getting recommendations from friends whose hair is nothing like theirs, or from the barber who has a limited selection, or they’re looking in a store trying to decode from a sea of labels and colors,” Dubin explained to FastCompany.

Dollar Shave Club can make that an easier experience, Dubin noted, in the same way it streamlined shaving, by separating out the bells and whistles to provide a simple, functional and pleasant curated set of products for their clients to choose from.

The sea around Dollar Shave Club is certainly filling up – but Dubin says at the end of the day, the best way to sell the service isn’t the product, it’s the improved experience.

“The reason it hit emotional paydirt for people was because there was an enormous amount of frustration,” he noted. “And finally here’s something that somebody’s doing about this really big problem. And we also created this piece of social content that was very sharable.”

Dollar Shave Club has done something even more interesting and perhaps even more sustainable. It has done much more than found an eCommerce site, it has created an online community based on shaving. And while it faces some much bigger players – a loyal (and entertained) user base seems like it positions it well to both start and run the race.

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