Gillette suffers nicks from Harry’s/Target’s partnership
If you’ve been in a Target over the past few months, you may have noticed an endcap featuring a large, orange-handled Harry’s razor. Back in August, Target and Harry’s, an online shaving products subscription service, announced that the brand would be sold in the retailer’s stores. At the time, many questioned if Harry’s or Target would benefit more from the venture. While that as yet to be answered, a Wall Street Journal article suggests there is a loser in all of this — Gillette.
According to the Journal, which cited Nielsen data as its source, Harry’s achieved a 10 percent share of cartridge sales and 50 percent of razor handle sales in Target within the first four weeks of going on sale in its stores. Target has confirmed that Gillette sales have declined in its stores.
Harry’s, which gets its own four-foot section adjacent to Gillette in Target, offers a selection of razors, shaving cream, face wash and other items. The line is also sold on Target’s website, which offers a five percent discount on Harry’s subscriptions to REDcard members as well as free shipping.
Gillette’s business, the article points out, has been under pressure from Harry’s and Dollar Shave Club, another online seller of razors and associated products, which was acquired by Unilever for a reported $1 billion in July.
Gillette, which is owned by Unilever rival Procter & Gamble, has started its own online subscription program to compete with Harry’s and Dollar Shave Club. The brand has seen its leading market share of the U.S. shaving category drop from 70 percent to 60 percent over the past few years, according to Euromonitor. Schick, the third player in the category, has seen its share fall in recent years, as well.
“The men’s grooming industry is changing quickly. This evolution is largely driven by the way men are shopping these days. They’re extremely selective, buying online more than ever before, and also care more about expressing their personal style than past generations,” said John Butcher, senior vice president of beauty and personal care for Target, in August.
- Online Upstart Harry’s Razor Jumps Into Gillette’s Turf – The Wall Street Journal (sub. required)
- Will Target and Harry’s make for a perfect retail partnership? – RetailWire
- What does Unilever’s acquisition of Dollar Shave Club mean? – RetailWire
DISCUSSION QUESTIONS: Will companies such as Harry’s and Dollar Shave Club continue to grab share of the shaving category at the expense of established brands such as Gillette and Schick? Do you think Harry’s success at Target will lead Dollar Shave Club to seek out a similar deal with a large retail chain?
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12 Comments on "Gillette suffers nicks from Harry’s/Target’s partnership"
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Professor of Food Marketing, Haub School of Business, Saint Joseph's University
Harry’s has done a terrific job as an online retailer developing an omnichannel perspective. Remember, omnichannel is about customers, not channels. The Harry’s/Target arrangement is a win/win. It gives Harry’s access to brick-and-mortar retailers and provides a differential advantage for Target.
That being said, I believe you will see more such strategic partnerships with the accompanying exclusive relationships.
Yes, both Gillette and Schick should be concerned. This category is relatively low-involvement and making it easier, more convenient and more transparent (think prices) will mean a continued evolution in this direction.
Principal, Retail Technology Group
Gillette will continue to lose market share as long as “upstarts” like Harry’s and Dollar Shave Club continue to innovate the way they sell their products. (They are both very good online retailers.) Dollar Shave Club will be sought after by a retailer and not the other way around.
President, Max Goldberg & Associates
Gillette engineered most advances in razor technology, Harry’s and Dollar Shave Club engineered style. It’s easy to copy technology. It’s hard to create style. Gillette will continue to lose market share until it can pioneer a new breakthrough technology or re-imagine its style. P&G has the financial wherewithal to try to do both. But does it have the vision?
Content Marketing Manager, Surefront
Were I Dollar Shave Club, I would focus on promotion through social media via viral video, sponsoring podcasts and influencers. Copycatting a competitor’s moves may be enough to keep you in the game, but it isn’t enough to thrive.
Since I see ads for Dollar Shave Club come up on my Facebook feed (spoiler alert, I don’t shave my face) they need to work on customization of their online advertising. The sponsored ads aren’t reaching the right target audience.
Mind you if Dollar Shave Club were to pull of a deal with a forward-moving grocer like Whole Foods or even Pick ‘n Save’s Metro Market it would be great. I just want to see them marketing to a slightly different audience than their competitor.
Principal, Frank Riso Associates, LLC
Companies like Harry’s and the Dollar Shave Club will continue to grab share because they are an innovative change and as we just found out on Tuesday, this country likes change now. Gillette and Schick kept increasing prices with every new bit of technology (more blades) they introduced until men started to seek the new low-cost shave alternative. Lower cost and an equal or better shave met the need of change and disruption to the established shaving community. All this change appears to be for the good. The Dollar Shave Club is a bit different in its approach to sales and we may never see them in a retail store.
Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.
So I walk into Target. I see the Harry’s display. As a Gillette user for umpteen decades, I say, “Gee, let me try that.” I do. I like it. Do I go back to Target to buy my refills? Never. Harry will send them to me forever. Target wins a little. Harry wins a lot. The other guys lose.
Managing Director, Retail and Consumer, PK
As a consumer, I was an early adopter of Harry’s and I love the convenience and the savings. The actual blades are “good enough.” A Dollar Shave Club tie up with a major retailer is more likely now that Unilever owns DSC. I think the most interesting question is, which other CPG categories are ripe for this sort of disruption?
Strategy Architect – Digital Place-based Media
Refreshing subscription is an excellent illustration in the shift from retail to service. Recurring revenue models drive commerce and business building in almost every sector of supply. Retailers take note — lead or follow. It is not an option to just get out of the way.
President, Second To None
Harry’s and Dollar Shave Club are prime examples of category disruptors. In making it incredibly convenient and less expensive to purchase these commodity grooming products online (and offering auto-replenish programs), they’ll continue to grab greater share of wallet. Just from personal experience, Harry’s has won me over as a loyal customer through their quality products and focus on ease and convenience. This tie-in with Target is a great way to increase brand visibility with consumers who are as yet unfamiliar with the brand.
CEO, The Customer Service Rainmaker, Rainmaker Solutions
The marketing and social media promotions of both Harry’s and Dollar Shave Club are excellent and will only get better as sales continue to increase. But here are my findings after using Dollar Shave Club for over two months. The quality of the blades is lacking. They only last a week if you are an everyday shaver. Once I realized this I understood Gillette was actually a better value.
But that is just me and my findings. Certainly not scientific. But enough to make me go back to the tried and true brand.
CFO, Weisner Steel
So in a stagnant/slow-growing market, in order for one of the brands to gain share others have to lose share?
OK, back on point, I think the answer is obvious: Gillette will buy Harrys … lock, stock and barrel, not one handle at a time.
SVP Energy Services and New Ventures, HomeServe
Dollar Shave Club coming to a Walmart near you! The shave clubs are clearly stealing share. I wonder if overall sales are up in the category and if margin dollars are up — Target doesn’t seem to say that.