$9.7B P&G ad spending
Dollar Shave Club is aiming upscale with the launch of a $9 post-shave moisturizer with anti-aging benefits. Until now, the online men's grooming retailer -- as its name implies -- has built its business on automatic replenishment of value-priced razor blades.
As the club's founder and CEO Michael Dubin sees it, Dr. Carver's Magnanimous Post Shave All-In-One Daily Moisturizer is more proof that despite the name, the brand and its 600,000 subscribers aren't just about price.
That said, while $9 isn't cheap, it's half the price per ounce (or less) of other anti-aging post-shave products sold online for $18 to $120 a bottle. And it's on trend, Mr. Dubin said.
"Gone is the stigma of spending time on your grooming and skincare routine," he said. "This is something men realize they have to do to look good and feel successful."
Then again, if men do feel any stigma, he acknowledged that a mail-order subscription is a pretty good way to buy anti-aging post-shave products without fear of discovery.
For the post-shave product, Mr. Dubin plans no funny videos a la the initial club launch or last year's launch of One-Wipe Charlies "butt wipes." But he said DSC will likely promote the moisturizer in its in-house-created radio commercials. DSC also bought $2.2 million in cable TV last year (including ESPN football broadcasts), as part of its $3.9 million total spend, according to Kantar Media, and Mr. Dubin said he'll likely continue using TV "periodically."
Dollar Shave Club is on pace to do $60 million in sales this year, up from $20 million last year, Mr. Dubin said. Its self-reported 600,000 users amount to around 2% of industry estimates of 36 million male razor cartridge users in the U.S. But Mr. Dubin said he believes Dollar Shave Club has captured 6.2% of the U.S. cartridge market by volume -- something that would give the two-year-old company around a third of the share of Gillette challenger Schick, owned by Energizer Holdings, in the $1.4 billion market for razor cartridges, according to Nielsen data from Deutsche Bank.
Mr. Dubin expects to triple sales this year at a time when that broader razor market is losing ground -- something P&G Chief Financial Officer Jon Moeller last month blamed in part on men trading down from cartridges to cheaper disposables. For the 52 weeks ended April 12, Nielsen data show offline razor cartridge sales down 10.6% in units and 5.3% in dollars.
But Mr. Dubin believes his company is actually trading men up from disposables.
"We're seeing 40% of our members take other products from us," he said. "And we think we can go even higher once we fine-tune our subscriber marketing."
More broadly, Mr. Dubin believes the $6 billion market for all men's grooming products is growing 5% annually. "We think we not only can ride that wave but can increase the size of the wave because of the very accessible, relatable voice we speak to men with," he said.