No one believed they could take down Gillette.
Gillette the Goliath had everything: branding, R&D, & an unmatched distribution network.
Dollar Shave Club released a viral video that was shot in a day for only $4,500.
They stole chunks of market share.
Here’s a breakdown:
1. Strong marketing campaigns
They knew they couldn’t match Gillette in marketing budget.
So they had to get creative.
In its viral video, they targeted Gillette’s weakness: high prices & inconvenience.
It received over 24 million views. Bringing in a ton of business.
2. Disruptive subscription models
With Facebook ads, Dollar Shave Club grabbed market share from Gillette.
They needed to increase the lifetime value (LTV) of each customer.
A subscription model increases the likelihood of repeat purchase.
Increasing the LTV of each customer.
3. Affordable pricing
This was KEY in their advertising.
For Gillette: “$19 of your blade purchase goes to Roger Federer. “
Could Gillette have dropped prices?
They could. But they can’t.
Gillette has to meet Wall Street short term demands.
And mortgaged away its moat.
4. Focus on the customer
It wasn’t just expensive to buy Gillette’s blade.
It was troublesome.
Because of theft, blades were often kept behind counters or in a locked case.
For Dollar Shave Club?
Get it automatically sent to your house every month.
It just works.
Dollar Shave Club was one of the OG in direct-to-consumer model.
Their success was cemented when Unilever acquired the company for $1 billion in 2016.
The internet has enabled disruption, and it comes in many form.
And in this case, a simple razor blade.