The online market for razorblades barely existed a few years ago, yet Americans have taken to it quickly: Web sales of men’s shaving gear in the U.S. have nearly doubled in the 12 months through May to $263 million, according to estimates from Slice Intelligence, a market research firm.
That is about 8% of the roughly $3 billion market and a big surprise to people who follow the market.
“It’s kind of incredible that happened all in a year,” said Tim Barrett, analyst at Euromonitor International, a research firm.
The pace continues to quicken. In the first five months of 2015, online sales amounted to $141 million, more than double that a year ago, according to Slice.
The shift in shopping habits has caught market leader Gillette off balance. The brand’s U.S. online sales are rising quickly, but rivals are growing faster. ....
The Procter & Gamble Co. unit commands more than 60% of the much bigger but contracting retail market. In the growing online market, it controls just a fifth of the pie.
The mismatch is forcing a number of adjustments at Gillette. Among them, Gillette is now trying to compete on value, a shift for a business that has long pulled in premium prices for its five-bladed cartridges and swivel-head razors.
The online leader is Dollar Shave Club. Three years ago the company was an untested startup with provocative videos in which CEO Michael Dubin said, “Our blades are f------ great.” But it has built an audience for its monthly mailings of blades in plain cardboard envelopes with the promise that subscribers will save money over the leading brands.....
P&G has responded by ramping up promotion of its Gillette Shave Club’s online subscription plans.
It claims men can spend significantly less on its razorblades—around $5 a month for its priciest Fusion ProGlide blades, compared with $9 a month for Dollar Shave’s top plan, which includes shipments of four cartridges with six blades each.
But Gillette’s math presumes users change cartridges only once a month, with an average of three to four shaves a week. Otherwise, its blades are a lot more expensive—around $5 apiece for its top of the line, five-bladed Fusion ProGlide compared with $2.25 for Dollar Shave Club’s six-bladed Executive....
Rob Springer, a 37-year-old who works for a granite company in Atlanta, said he shaves three or four times a week and used to buy Gillette Fusion five-bladed cartridges before he signed up for a Dollar Shave Club subscription last October.
“The Gillette razors were wonderful, but the problem was that they were around $20 for a pack of four,” he said, adding each blade lasted him only a week. “It’s done in a week, no matter what brand I use,” said Mr. Springer, who sports a beard and shaves his head and neck. He now pays $6 monthly for a set of four cartridges..... Rest of article.
Kingfish note: No kidding. Use a Merkur safety razor. The classic version is $25. The razor will last for years- nothing like good German steel. Merkur or Feather platinum blades are $6 to $7 for a box of ten on Classicshaving.com and they are better than the Gillette razors that resemble souped-up Sopwith Camels.