Dollar Shave Club: a case study in retail industry interruption (and a very funny video)
14Jan13

My theme this year is “adapt or die”. Last week I explained 5 ways businesses must adapt in 2013 to survive and thrive. I am convinced that organisations must either commit to making significant changes to the way they do business or keep doing what they’ve been doing and try survive while their market share is steadily eroded by smarter, faster, more nimble competitors.

I’d now like to introduce you to one of those smarter, faster, more nimble competitors….Dollar Shave Club.

Here’s a start-up that launched in mid- 2011 and then relaunched in March 2012 and is already making a big splash in the exciting world of…..men’s razor blades. You know, that purchase you have to make at the grocery store once a month. Its been dominated for a century by Gillette and Schick. No other challenger comes close. Until now.

This video (which had had over 8 million views) is their main marketing tool and hilariously and effectively explains why you should stop buying blades at the grocery store and start buying from Dollar Shave Club. It’s pure genius. In 90 seconds they have skewered the industry leaders, entertained us and invited us to be part of their”club”.

A close look at their website is like a blueprint for online retail success:

  • the aforementioned video tells you everything you need to know…and its laugh-out-loud funny.
  • a prominent call-to-action “A great shave for a few bucks a month – DO IT”
  • a testimonial (which is fairly tongue-in-cheek)
  • a simple range of 3 packages to choose from
  • a simple and fun rewards program for sharing the Dollar Shave Club story, “Free blades for life”
  • a quick and easy payment gateway you’ll only ever need to visit once
  • Facebook sign-up option for membership
  • social media sharing

The whole site contains the same irreverent, “they’re just razor blades guys” style humour. Its fun, its compelling and it works a treat. I signed up within minutes and was actually excited when my blades arrived.

But the real genius is in the very simple proposition and business model.

The blades are made in South Korea and can be found under different brands in Pharmacies across the USA. They’re pretty good, not much more than that.

But Dollar Shave Club turns a traditional $15-20 grocery store expense into an easy $7 / per month subscription. They don’t just get the sale, they get your repeat business and a nice big database of customers.

Their product line is ridiculously small. Just 3 types of razor blades. By focusing in this way they maximise buying power and minimise overheads.

The Dollar Shave Club business model doesn’t rely on advanced computer algorithms and other amazing tech innovation like many startups we follow. It’s simply a business where the founder Michael Dubin looked at an industry and said he wanted to help men have fun with shopping online, because, “Women have all the fun [shopping online] with fashion, shoes, and accessories.”

By making shopping for blades easy, fun and more affordable they have seen explosive growth and have attracted an impressive $10.8 million in VC funding. For razor blades??!!

An old industry suddenly interrupted by a simple but new way  (subscription) of selling an existing product, executed extremely well. Hell, any of us could do that…couldn’t we?

 

Posted under Innovation, marketing, Online, Start me up

Written by Craig Wilson


2 Responses to “Dollar Shave Club: a case study in retail industry interruption (and a very funny video)”

Yep pure Genius! With nothing to loose and eveything to gain, why not?!

Comment by Sonny on January 16th, 2013

in one word we can say “Inspirational”

Comment by Atm marketing on January 25th, 2013

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