Retail

Dollar Shave Club’s Growing Grooming Ambitions

Dollar Shave Club first made a name for itself with a solid concept — and a series of very entertaining ads that brought the inexpensive razor company into the national consciousness. The problem it was founded to solve was simple: buying a razor was a miserable experience that cost too much.

“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,” Dollar Shave Club Founder Michael Dubin told PYMNTS. “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.”

Some things haven’t changed much since the firm’s early days in 2012, when shipping labels were manually printed and hand-affixed to packages before being transported to their fulfillment center via the “trash bag” method. The ads are still very funny (and still questionably safe for work).

But this is also a very different firm. In 2016, the company was was acquired by personal care products giant Unilever, and there were questions at the time about how a direct-to-consumer innovator like DSC would fit into the very much mass-market and retailer-focused Unilever constellation of brands.

What would the new Dollar Shave Club look like as its corporate parent had worked to grow, expand and, as Unilever President of North America Kees Kruythoff described it, “develop the firm to its full potential”?

It seems that answer is coming into focus as 2018 fades out into 2019. Dollar Shave Club (DSC) is both expanding what it offers to consumers and how it offers it.

The expansion in what the firm offers comes in the form of fragrances — DSC has hired fragrance developer Ann Gottlieb to design its new Blueprint brand of men’s fragrances. Gottlieb may not be a household name, but her work is — Calvin Klein’s CK One and Eternity are among her better-known products, and she is credited with selling around $1 billion in prestige perfumes throughout her career.

But as she told Ad Age, Blueprint was a rather difficult challenge.

“No one has successfully sold fragrance online, and this is as good an opportunity to do that as you’ll find,” Gottlieb says. “The fragrances almost invite you to try them.”

The expansion into perfume comes in tandem with the piloting of vending machines in malls and transit hubs in New York, Los Angeles, San Francisco and Minneapolis.

“While we’re not going into mass retail, we are going to be increasing our presence in the real world,” Dubin says. “What’s unique about these machines is that they’re all travel and trial size products that allow people to try the products first and build affinity for them.”

The move comes as DSC is finding itself working in an increasingly crowded market with players offering essentially similar central value propositions. Harry’s is its best-known startup competitor, and in the last year industry giant Gillette has jumped into the subscription game, to great effect. Procter & Gamble — Gillette’s corporate parent since 2005 — reported on its last earnings called that its data shows Gillette was the only razor subscription business that grew members in the U.S. last quarter.

Meanwhile, Harry’s is making a bigger push away from subscription, and into mass-market retail, with its products appearing on shelves at both Walmart and Target.

But according Duhin, DSC is excited about trying a different inroad into physical retail that isn’t the same old space on shelves in a store.

Instead, consumers will be able to interact with self-services machines that will offer six pre-bundled kits of various DSC products for $12. The vending machines are both novel user-recruitment tools for those who have never tried out DCS, as well as a way to build member loyalty by being in the sorts of places that those in search of grooming products might need to look. The vending machines will even call out to members — digitally.  Those who have the DSC app installed on their phone will get notifications on their phones when they’re nearby.

It is all at base part of the same effort, according to Dubin, which is to help the firm evolve from being a once-a-month subscription service for razors to being a hub for consistent shipments of a range of shaving prep, haircare, skincare and oral-care products. As of 2018, DSC apart from razors is offering more than three dozen products in six categories.

“We’ve moved from razors once a month to everything you need to look, smell and feel your best a couple times a year,” says Dubin. To that end, instead of the simple razor mailing, new members are also made a full-service offering that includes an initial $15 starter box with products for shaving, haircare and oral care, followed by a “restock box” a month later for $48.88.

The goal, he noted, is to get all new members started with Full Service packages by the end of the year.

And though there are no numbers yet, Dollar Shave club has noted the approach, particularly supported by the new self-service machines, shows “promise” as it is performing “four to five times better” than initial expectations.

Which means it seems DSC is a firm to continue to watch — and for reasons other than the funny commercials.

 

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