Dollar Shave Club, as it continues slice away at established razor brands, is taking a swipe a vast new market – hair care.
The e-commerce player reported more than tripling sales last year to $65 million and expects to more than double sales this year to $140 million, in part by launching Boogie's styling aids for men. The line is backed by an online "Boogie's Match" product-personalization tool and a "Hairantee" offering a full replacement at no cost if men choose the wrong product.
While less-expensive razors have been Dollar Shave Club's key proposition, Boogie's, like other category extensions for the brand, isn't cheap. Products that include hair gel, clay, cream, fiber and paste go for $7 to $10 – at or above prices of comparable mass-market products.
Dollar Shave Club founder and CEO Michael Dubin said his customers, while focused on value, are just as concerned about convenience and performance. That's led 40% of his 1.7 million current subscribers to buy at least one product other than razors – a number he expects to rise with the hair-care launch.
Having launched – and starred in – a TV campaign for the club, the former improv comedian is sounding more like a marketer all the time. "We're a very mission driven, lifestyle and experience company," he said in an interview. "Our mission is to help guys live better lives by solving their problems."
Razors were the "really big problem," he said. "But we think there's just as much opportunity to relieve frustrations in other areas of men's grooming."
With hair styling, though 62% of guys already use styling products, Mr. Dubin said: "There's a lot of frustration. These guys are getting recommendations from friends whose hair is nothing like theirs. Or they're getting recommendations from a barber who has limited selection. Or they're trying to figure out in the store what to buy, and there's a dozen products in different tubes that all say about the same thing, and no help to find the right product."
Mintel pegged the men's hair-care market at $545 million last year, up 5.4%, which was strong in a U.S. beauty market that's been sluggish. Mr. Dubin sees it as a bigger opportunity than other spinoff products Dollar Shave Club has spawned, including One Wipe Charlies "butt wipes" and Dr. Carver's pre- and post-shave products.
That men's care total is well above the $367 million Mintel pegged the flushable wipes business at in 2013. While a spate of articles has documented the havoc that flushing wipes is wreaking on municipal sewer systems, Mr. Dubin said that hasn't affected the One Wipe Charlies business yet.
Both categories are still well below the more than $4 billion men spend on razors, blades and trimmers in offline stores, according to Nielsen data from Deutsche Bank. That's a market from which Dollar Shave Club and such competitors as Harry's appear to be taking a noticeable slice. Even though razor handle sales are up more than 14% in offline stores for the 12 months ended March 26, thanks to the launch of Gillette Fusion Pro-Glide's "FlexBall" product, blade sales are off 6.6%, which at least partly reflects inroads by e-commerce players. Mr. Dubin estimates his company alone now has a 10% volume share of the men's razor cartridge market, historically one of the most profitable on a margin basis in packaged goods.
Boogie's won't get TV right away, Mr. Dubin said. "But we'll get there over time." The line will get digital support and help from promotion to the existing member base, which gets The Bathroom Minutes magazine included in their shipments. And Dollar Shave Club also plans broader investments coming soon in men's digital lifestyle content, he said.