Page 32 - AT

A32 FEATURE
Thursday 27 sepTember 2018
Startups shook up the sleepy razor market. What's next?

By ALEXANDRA OLSON "Initially, the biggest play-
Associated Press ers underestimated the
NEW YORK (AP) — What potential of these brands,
do you hate shopping for? and when they reacted
Toothpaste? Sunscreen? either by dropping prices
The guys who founded or by launching their own
Harry's shaving club want subscription models, the
to know. damage was done," said
The startup, which took Fatima Linares, beauty and
on razor giants Gillette fashion research manager
and Schick with its direct- at Euromonitor Internation-
to-consumer subscription al. "It's still unknown what
model, has since expand- these companies will do
ed into traditional retail and to revert the situation, or if
launched a line of body that is possible at all."
care products. Armed with Harry's says it now has 6 mil-
$112 million in new financ- lion customers in the U.S.
ing to develop new brands, and Canada. It says busi-
the company now is inves- ness has grown 70 percent
tigating what other sleepy year-over-year, though it
products might be ripe for does not release sales fig-
disruption. ures. For Harry's and Dol-
"It might be better prod- In this June 15, 2018, photo, the Winston razor and Harry's face lotion are on display at the head- lar Shave Club, simplicity is
ucts, a better experience quarters of Harry's Inc., in New York. the point. Harry's sells just
getting the products or a Associated Press one five-blade razor with
brand that appeals to who a choice of two different
they want to be as peo- Harry's has captured about losing 3.6 percent in net vice president of Global types of handles, priced at
ple," said Jeff Raider, who 2 percent of the $2.8 bil- North America razor sales eCommerce for Edgewell, about $2 per cartridge un-
recently took on the role of lion men's shaving indus- in the most recent quarter. Schick's parent company. der their subscription plan.
CEO of Harry's Labs, over- try since its launch in 2013, Both major brands now of- Pankaj Bhalla, brand direc- Dollar Shave Club offers
seeing the development of according to Euromoni- fer subscription services on tor of Gillette North Ameri- a 4-blade and a 6-blade
new brands. tor market research firm. their own direct-to-con- ca, said increasing its online razor, with the cheaper
There's a reason why Harry's Its main rival, Dollar Shave sumer sites, which they are sales is a "key part of our one priced at $1.50 per
investors are betting that Club, has about 8 percent. leveraging to promote their strategy." He offers a reality cartridge. It is a deliber-
reinventing the razor was It's been a gut punch to the lower-end razors while also check for the shave clubs: ate contrast to the dizzy-
no flash-in-the-pan idea. industry leaders. showcasing their edge in While Gillette might be new ing array of razors offered
Insurgent brands are shak- Gillette controlled about 70 technological innovation. to the direct-to-consumer by Gillette and Schick, the
ing up the way people buy percent of the U.S. market "Our blades are known game, the brand says it has legacy of their century-old
everything from mattresses a decade ago. Last year, for their long-lasting qual- 70 percent of the market tradition of trying to outdo
to prescription acne rem- its market share dropped to ity, which means you need share on online retailers like each other. Their lower-end
edies, eating into the mar- below 50 percent, accord- less cartridges per year as Amazon and Jet.com. products are priced com-
ket share of big consumer ing to Euromonitor. compared to the other But critics say both incum- paratively with the shaving
product companies and No. 2 razor maker Schick shave clubs in the mar- bents were slow to respond clubs, while their premium
leaving them scrambling to has also been squeezed, ket," said Stephanie Lynn, to the new competition. razors are much pricier.
respond. How the newcomers com-
Eager venture capitalists, pare in quality is a matter
digital technology and so- of furious social media de-
cial media make it easier bate. Harry's gets its share
for anyone with a good of negative reviews from
idea to enter the consumer customers who say its razors
goods market, according feel cheap, but others are
to a report on insurgent fiercely loyal.
brands by Bain & Compa- Greg Lesko, a 56-year-old
ny, a management con- Harry's customer from the
sulting firm. Contract man- Pittsburgh area, said he be-
ufacturing, which allows came "fed up" with Gillette's
companies to outsource high prices. "I wouldn't go
production and some- back if you paid me," he
times defray costs, also has said. Like other insurgent
made it simpler. companies, Harry's and
"The reality is that no cat- Dollar Shave Club took off
egory is immune to disrup- because they tapped into
tion," the Bain & Company shoppers' grievances.
report said. Harry's CEO Andy Katz-
Digital newcomers still rep- Mayfield said the idea for
resent only a fraction of the the start-up came to him
overall market share, ac- during a 2011 visit to a
cording to the report. But drug store, where he had
such companies are cap- In this Friday, June 15, 2018, photo, co-founders and co-CEOs of Harry's Inc., Jeff Raider, left, and to ask an employee to un-
turing a disproportionate Andy Katz-Mayfield speak during an interview with The Associated Press at company headquar- lock a case to spend $25
ters in New York.
share of growth in recent Associated Press for blades and shaving
years. cream.q