With its dominance gashed by lower-priced competitors led by Dollar Shave Club, which was acquired last year by Unilever, Procter & Gamble’s Gillette brand yesterday announced several new products aimed at both men and women including two new razors that are — gasp! — cheaper than its existing lines.
“It is a reversal of a decades-long strategy of churning out increasingly complex razors at higher prices,” writes Sharon Terlep for the Wall Street Journal.
“Historically there has been a bias toward the high end,” P&G CEO David Taylor tells Terlep. “The risk with that is you can still grow, but you have a smaller group of users who are willing to pay ever higher prices for better performance. We decided to innovate not just on the superpremium tier.”
“New products include the first-ever cooling technology for disposable razors, the first Venus facial hair removal device and new Gillette3 and Gillette5 refillable razors for under ten dollars,” reports Alexander Coolidge for Cincinnatti.com.
Also, there’s a New Gillette Sensor3 Cool, disposable razors with cooling technology; Gillette Fusion5 and Gillette MACH3 cartridges with finer, thinner blades and a low-resistance coating; the Venus Extra Smooth family, a new razor and cartridge for a suggested price of $8.99, and the New Venus Bikini Precision. They will be available in January.
In attention to their expertise in metallurgy, Gillette’s bench of razor-blade scientists are also well attuned to market feedback, if the news release about the developments is an accurate guide:
“The new offerings were developed by Gillette scientists who studied consumers’ habits and practices, listened to consumer feedback and tapped into market trends to identify and address unmet grooming needs across the category. The new solutions zero in on several high-interest areas such as: the 40 million U.S. men who prefer disposable razors, the growing number of men who want high quality, refillable razors below ten dollars, and the nearly 50% of women who remove facial hair.”
Or, it could be that someone pointed out that margin share has been hammered by the online upstarts, with net sales dropping 5% in its latest earnings report on top of a six-year skid in market share.
“Its share of the men's-razors business fell to 54% in 2016, down from 59% in 2015 and more than 70% in 2010,” according to figures released in April by data-tracking firm Euromonitor and reported by Dow Jones Newswire on Fox Business.
“The brand’s M.O. in a market it long dominated — even as it had relatively high prices — has had to be revised as the likes of Dollar Shave Club and Harry’s have won over customers with less expensive products, and innovations such as subscription services, home delivery, and quirky ad campaigns. In March, P&G started to cut prices on some Gillette products by as much as 20%, and said that there were gaps in Gillette’s assortment between its priciest products and cheaper items it wanted to fill before rivals did,” reports Phil Wahba for Fortune.
P&G shelled out $57 billion for Gillette in 2005.
“For over a century, our goal has been to deliver the best, most reliable grooming experience possible for consumers,” Charlie Pierce, P&G’s group president, Global Grooming, said yesterday. “With this launch, we are demonstrating that this commitment is true for every single product tier in our portfolio…. We want consumers to know that whatever their need, we have a product that will deliver a superior experience and unbeatable value.”
In other close-shave news at P&G, the company is challenging a proxy vote recount that found that activist investor Nelson Peltz had actually won a seat in the recent board elections by a margin of 0.0016%, as David Faber reported for CNBC last week.
“The two sides have spent $60 million battling each other. They are now in the ‘snake pit,’ as CNBC reported earlier, a process where advisors for each side meet and review each contested vote to ensure it is valid. The review of the official vote tally will take many weeks and the challenge will come at the end for proxies deemed in question,” Faber continues.
Peltz blasted P&G management in July for not coming up with a strategy for snuffing out its upstart competitors when they were first getting going, as CNBC’s Berkeley Lovelace Jr. reported. He said ex-Gillette execs who had been replaced by P&Gers would have known what to do.