Business

Razor fight: The metrics that explain why Gillette tried (unsuccessfully) to take down Harry’s and Bevel.

NEW YORK — Incumbent brands, understandably, start to sweat whenever an outsider — or anyone for that matter — comes in and exposes their consumers to a product that, top-to-bottom, is an upgrade on their own.

It’s when someone starts rattling the cage like this that you start to see the fight come out in these slumbering giants. They tend to awaken from their slumber — and history has shown that they’re not above getting a little dirty when they realize the threat is very real. Case in point: Gillette’s recent “Welcome Back” ad campaign, its ill-fated attempt to turn customers against Harry’s.

The background details for context:

The Setting: With better marketing, better messaging, and DTC shaving products that are more in line with what consumers actually want, Harry’s — along with Bevel and Dollar Shave Club — is eating up Gillette’s shaving business. And Gillette, part of the Proctor & Gamble family, is not happy.

What Gillette did: Inside a period of six months, Gillette battled both Bevel and Harry’s.

  1. First, in July 2016, they challenged Bevel to prove that their single-blade safety razor was actually a better product than Gillette’s multi-blade razors. The Better Business Bureau ruled that, yes, Bevel’s product was in fact better.
  2. Then, in December 2016, with sights set firmly on Harry’s, Gillette redesigned its website, with the “Welcome Back” campaign as the home page, and charged that Harry’s products were substandard. “Most guys leave Harry’s after trying it,” read the front page, which has since been taken down. (It’s interesting to note, however, that Gillette hasn’t targeted Dollar Shave Club, who’s now part of the Unilever stable. Draw your own conclusions from that.)

It was a disaster for Gillette. Gillette’s campaign backfired. Completely. It ultimately ended up helping Harry’s, instead of hurting it. For starters, it proved to be a PR disaster by making Gillette look like a bully trying to beat up a small business. Even worse, it gave Harry’s a platform, which in turn helped to introduce even more customers to Harry’s and convince them to make the switch. With a product that was naturally consumer-centric, this was always going to be a win-win for Harry’s. Gillette gave them free publicity that the upstart otherwise wouldn’t have been able to garner alone.

Three big motivations here for Gillette:

  • They’ve watched their market share seriously erode with the arrivals of Dollar Shave Club, Harry’s, and Bevel. In response, they’ve tried to imitate the upstarts in tone and in website design.
  • Their model was based on big margins from high prices, and a lack of (fresh) competition: Gillette, part of the Proctor and Gamble stable, has for years set high prices to in turn be able to research and develop high priced razors. Every seven years, they launch a newer, more expensive razor system whose replacement blades come with stratospheric prices.
  • They grew complacent. Fully comfortable being the de facto choice for millions of customers for years, Gillette now realizes that it has to do something that it hasn’t done for decades: compete in a truly open market with new brands that are fully consumer-centric (rather than brand-centric).

Below, a snapshot of the shaving market (compiled from Euromonitor data) which sheds some light on why Gillette reacted the way it did:

Y axis left: actual market share | Y axis right: market share growth

Gillette has bled market share for the last six years, which has only been accelerated by Harry’s, Bevel, and Dollar Shave Club. Each of these three challengers offer fairer pricing standards, which forced Gillette to just last week to reduce prices on their razor blades in an effort regain market share.

But price alone is not a sound strategy, and at the Washington Post last week, Barclays analyst Lauren Lieberman argued that Gillette’s discounting tactics were too little, too late. “We are not assuming that there’s any material change in the long-term trajectory of the Gillette business as a result of these cuts,” she said. “There is something about Dollar Shave and Harry’s. [W]e are in a consumer environment where people like feeling they are making a differentiated personalized choice. Small and niche is in vogue.”

It’s only going to get worse for Gillette: Harry’s and its peers will continue to be a fly in the ointment for Gillette: Soon they’ll be entering the female shaving market, as well. Bevel, for one, has already made insinuations that it’s seriously considering doing so quite soon.

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  • Neeru Mishra

    Can we get the data table please?