800Razors.com Takes on Dollar Shave, Pitches Itself as Best for Quality, Price, Convenience
The e-commerce business spawned by Dollar Shave Club is now facing competition of its own: 800Razors.com, which thinks it can nick the company that in one year went from scruffy viral-video marketer to an estimated $10 million brand advertising on ESPN's Rose Bowl.
Upstart 800Razors says it has an exclusive e-commerce deal for razors from Energizer Holdings, owner of Schick, and projects it can capture over the next decade 10% of a blade-and-cartridge market that exceeds $1.8 billion in annual offline sales, according to Nielsen data from Deutsche Bank. The 800Razors challenge is part of a growing chorus of e-commerce razor rivals, such as Harry's, which recently launched its own viral-video ad from Droga5.
Energizer also owns private-label manufacturer American Safety Razor and makes razors branded by Unilever's Axe, so the 800Razors deal is another way it poses private-label or licensed challenges to Procter & Gamble Co.'s Gillette, which controls 81% of the U.S. razor cartridge market to Schick's 17%, according to Nielsen.
800Razors, with sales of around $1 million last year, projects a
10% U.S. market share by 2023, according to Chief Operating Officer
Phil Masiello, which would amount to around $180 million of today's
Mr. Masiello, a serial entrepreneur along with 800Razors CEO Steven Krane, has helped launch everything from "grab-and-go" meal stores in the 1990s to the Carol Alt Raw Essentials natural beauty business in 2008. But he believes online razor sales are his most promising category yet.
Of the 36 million razor-cartridge users in the U.S., 800Razors would have to carve off about 3.6 million to reach its goal. Dollar Shave Club, with a year's head start and more than $10 million in venture-capital financing, only had 200,000 subscribers as of last summer.
Dollar Shave Club has gotten plenty of buzz thanks to funny videos from improv-comedian-turned-CEO Michael Dubin, but Mr. Masiello believes 800Razors will win on a combination of quality, price and convenience.
"We don't burn people's faces, burn their wallets or burn America by taking jobs away," Mr. Masiello said. The deal with Energizer gives 800Razors access to Schick patents and a product that looks and feels like the Schick Hydro, but priced about 20% below Hydro blades and more than 70% below blades for Gillette Fusion ProGlide cartridges. "People aren't happy about the price of Gillette products," he said, and many aren't happy with the inconvenience of having to get the frequently shoplifted cartridges from locked cases. "But nobody's unhappy with Gillette's quality," he said.
For now, 800Razors handles marketing largely in-house and focuses on search advertising and search-engine optimization, along with public relations via Kel & Partners, Boston.