Unless you’ve been living under a rock for the last few years you’ve probably heard of an internet service called Dollar Shave Club. It’s exactly what it sounds like, it’s a company that sells razors for $1 as well as more expensive versions that have multiple blades. For those that shave on a regular basis, both men and women, they’ll know that razors are expensive. Sometimes replacement cartridges will even cost up to $40-$60 per month depending on how often you replace the blades. In comes Dollar Shave Club. They sell similar quality blades for a fraction of the cost and even ship them right to your door.
The plucky little company that could started life in 2012. Fast forward to today where they just got acquired by Unilever for $1 Billion dollars. This is proof that subscription based e-commerce has changed the way modern people conduct their shopping. Of course the $1 Billion dollar acquisition pales in comparison to when P&G acquired Gillette 11 years ago for $57 Billion dollars. But even so, the small grassroots company fought their way to a 15% market share where Gillette still controls 70%.
DSC owes its success to the fact that they let the products sell themselves and they just make sure the buying experience is as easy and cheap as possible. P&G and Gillette pour roughly $750 million dollars per year into razor R&D. They also spend billions of dollars on marketing and advertisements. All that means they have unique products that are front and center everywhere you go. But all that money they invest also means they put a premium on their brand. That’s why razors cost so much as the actual stores.
DSC goes the opposite direction and believes that razors are fine the way they are and don’t need millions of dollars worth of R&D. They don’t even have much of a marketing budget. The vast majority of their audience was captured by their low budget but frankly hilarious Youtube video. From there, the people that took a chance got to experience what they really put their money into, customer service. They made sure that buying razors were cheap and easy, the two things most people want when buying anything. Then they have an entire army of walking advertisements. Who would you rather listen to? Your buddy with a clean shaven face and extra cash in his pocket or a commercial crammed down your throat?
If you haven’t seen their video make sure to take a look, it’s completely worth your minute and a half.
Latest Comments