The consumer base for shaving products has changed along with their preferences and values. Consumers were questioning if they were paying too much for products with many features when simpler solutions could provide similar results at affordable prices, tailored to their specific needs with a pleasant shopping experience.
A perfect storm allowed shaving clubs to succeed
Shaving clubs entered during a perfect storm, with several factors opening an opportunity for these brands to succeed.
Shaving clubs were initially responsible for shaking the razors and blades industry in the US. Dollar Shave Club, Harry’s, Bevel and other smaller brands only raised some underlying issues, not evident or ignored before their entrance. Razors and blades have been a declining category dominated by few brands mostly positioned in the pricier segment. The male category, the largest in the US, is a systems one, meaning that consumers need to replace blades frequently, opening a window for subscription models.
Simplicity, transparency, experience and empowerment are key for these new consumers. These disruptors rapidly became the preference for consumers and showed that even declining categories can be revived through innovative strategies. Shaving clubs capitalised on opportunities offered by a struggling market.
A recipe not easy to replicate
Sales will either stagnate or decline in the top 10 global markets as more men grow beards. However, shaving clubs only saw major success in the US where they became a real threat to brands such as Gillette or Schick by capturing 12% of men’s razors and blades in 2017.
Attempts to replicate the model in other countries have been less successful. Shavekit entered the UK market in 2013, claiming to offer a more convenient experience, flexible delivery and a good shave. By 2015, they had a consumer base of 8,000 members and aimed to increase this to 20,000 by 2016, much lower than the 3 million subscribers Dollar Shave Club has in the US.
Even Dollar Shave Club ventures in Canada, Australia, and the UK were not as successful as in the US. Dollar Shave Club announced its next move to India, where it will face competition from brands such as Bombay Shave Company, which already achieved 12,000 consumers and projects sales of USD4 million in 2018.
Women’s shaving in the US faces similar challenges to men’s, but despite this, female clubs have seen more moderate success than those of their male counterparts. Angel Shave Club, the first shave club for women, uses “shave-n-save” as its motto and has a similar model to Dollar Shave Club. The brand appeals strongly to social responsibility and donates a proportion of its profits to overseas charities.
Several factors need to converge to favor shave clubs: a big enough consumer base, a preference for systems over disposables, adequate market structure, fast-growing online sales penetration, weak consumer loyalty to established brands, unsatisfied consumers and clear market concentration.
Without new strategies the future is not a promising one
The challenge is to revamp a declining industry. The latest results prove that razors and blades are no longer a category where added features mean added value and growing sales.
Direct-to-consumer brands and e-commerce, in general, have been blamed for hurting sales of traditional brands and retailers due to their lower prices and the convenience of home delivery. Yet, this premise is far from explaining the reason for their success. These brands changed the marketing scene completely.
By creating their own loyal and engaged audience, and by consistently developing strong, one-to-one relationships with their customers, these brands developed a whole new way of doing business and proved that even, or especially, more mature categories can see growth.
For further insights, you can find the full "Disruptors: A Smooth and Precise Cut of US Shaving" report here.