29 Jul Dollar Shave Club Acquired by Unilever for $1B In 2016
Dollar Shave Club Acquired by Unilever for $1B In 2016
It was announced that consumer packaged goods giant Unilever will pay $1B to acquire a 5-year-old start up called Dollar Shave club. What did marketing have to do with this? Everything. If you remember back from your intro to marketing class, the marketing mix includes 4Ps; Product, Price, Promotion and Placement. The Dollar Shave club was disruptive on each of these Ps. This disruption created value in the age old, arguably stagnant men’s razor category.
Yes, the company solved a problem…every company should. Yes, the company had a solid business model that minimized expenses and maximized revenue while providing a delightful customer experience…again, any remotely successful business should do this. But a $1B exit in 5 years? I maintain that the Dollar Shave Club’s take on each of these 4 basic pillars of marketing set them apart from their competition. Let’s have a look:
PRICE: Its right in the name…DOLLAR Shave Club. Now all of their products aren’t a dollar. But they do actually have a product that cost $1 (plus shipping) per month and it is a razor that provides a shave. They have delivered on their brand promise while leveraging this extremely low price to drive awareness amongst the people within their target that this this is an outrageously low price. (how could I purchase all of the razors I need for the month for only $1?!?) In a category where the average price per month is over $8, $1 is disruptive. http://sharpologist.com/2013/03/shaving-for-life.html
PLACEMENT: In addition to the high price of razors, the Dollar Shave Club simultaneously solves the problem of regular shopping trips for men who do not like to shop. This company was able to decrease the price of the product AND remedy the pain point of shopping. BOOM! #Disruption
PROMOTION: The internet has truly taken costs out of communicating with the masses. The outrageous brand voice is solidified via a witty video advertisement launched to introduce Dollar Shave Club featuring founder Michael Dubin has over 23M views! The tone of the communication speaks directly to their target and shows in a tongue and cheek way how they save money (by driving extreme efficiencies) and that they ship direct to consumer for $1 a month (plus shipping). It also encourages a make under of their razor features (do you really need your razor to vibrate?) for the sake of saving money which is completely counter to most messages this target receives regarding the razor category.
Also, the idea of calling this subscription service a ‘club’ helps to create brand ambassadors out of users who feel as though they are a part of something. They are smarter than their non-member counterparts because they are engaged in a new, hip, and smarter razor brand. Targeting this product towards a group of men who would rather not visit a brick and mortar store but need to purchase razors became a rather obvious match.
PRODUCT: It is worth a try due to the bargain basement pricing, with home delivery and a dude-bro voice, what kind of product would you be expecting? Given all of these benefits, it would be understandable for the expectations to be low. A standard product could potentially give Dollar Shave Club the ability to over deliver based on the pricing and delivery. They did…they overshot expectations and got raving reviews in a consumer marketplace where reviews really matter.
We at Klickrr give 5 stems to Dollar Shave Club. Well done on leveraging their ability to deliver disruption through the area of the marketing mix!