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An article posted mid last year in the Boston Globe outlined many of the competitive aspects of the overall shaving market. The overarching theme: a razor war is underway. It’s a theme reiterated by the following video from Gartner’s L2, Inc.
It reminds me of a story I heard some time ago of an interaction that occurred between the CEO of Best Buy and the CEO of Recreational Equipment, Inc. (REI).
CEO of Best Buy: “We can be friends because we don’t directly compete.”
CEO of REI: “What do you mean we don’t directly compete?!”
Best Buy CEO: “We don’t sell the same products. We are in completely different industries.”
REI CEO: “But we do compete for peoples’ time and the sad thing is: you’re winning!”
As it relates to razors there are now more socially-acceptable options than ever when it comes to shaving (or not):
The competition among consumer products companies that offer shaving solutions to the masses is heating up. Unilever’s acquisition of Dollar Shave Club was a direct affront on one of P&G’s most lucrative segments: Gillette. Combine that with the fact that less men are shaving and more are opting to grow beards instead and revenue is shifting to other areas like beard and mustache care.
The Boston Globe piece outlines the rough size of the men’s market at a notable $11 billion of which it is estimated that P&G/Gillette own roughly 60% to 70%, with their portion of the pie shrinking. The women’s shaving market at $1 billion in the United States and an estimated $3 billion annually.
But where does that leave the safety razor and straight razor market? How large is it? Is anyone doing market analysis of its relative size of the overall pie? Based on my read of the revenue of some of the top online-only providers (which is where the lion’s share of sales are made for wet shavers) for hardware and software (including Amazon), my guess is the entire segment is less than $100 million a year. These assumptions are based on overall traffic data gleaned from Amazon searches and traffic stats for the top 10 independent websites in the wet shaving niche.
That’s < 1% of the overall market for shaving supplies.
Gauging the size of the wet shaving market is much less important than understanding it’s relative growth as a segment related to the overall market. There was an initial spike several years ago, per Google Trends data below, but it would appear the overall growth has more than slowed and plateaued. It seems to be shrinking:
Thanks to a lack of massive broad-based advertising, the industry’s demand appears to be occurring in a more grassroots fashion, starting among hipster and hucksters in the millennial segment. Women have also seen a surge in wet shaving as well as more women begin to shave their legs with safety razors.
Like cartridge razors, wet shaving cannot simply sell itself. Saul’s comment to a recent guest post I did on the Sharpologist blog is spot-on:
Ask a few of your friends and male relatives about shaving. What they use and what they think about it. I guarantee you they will mostly say that they ‘hate shaving’ and then go on to complain about the exorbitant prices of the latest vibrating hunk of plastic Gillette is hawking.
Procter & Gamble is BY FAR the worlds biggest advertizer, spending about $9 billion per year on advertizing. To put that staggering figure in perspective, Michael kors, the biggest advertizer in Great Britain, spends roughly $100 million on marketing a far wider range of products.
These razors do not ‘sell themselves’ by any stretch of the imagination. Ask yourself this, if advertizing didn’t work, why would they do it?
More advertising (albeit less traditional) is certainly going to be necessary to continue the growth in changing the trajectory of cartridge razor shavers over to wet shaving with a straight or safety razor.
The market is as cutthroat as ever and changing consumer sentiment and habits requires more than advertising. It requires even more grassroots word-of-mouth work to ensure the segment continues its march forward against “Big Razor, Inc.” As correctly stated in the L2 video:
The category has enormous margins and is still growing, but not for the big players. 90 of the 100 biggest CPG companies in the U.S. lost share last year and 2/3 of them declined in revenue.
Largely because of the death of the industrial advertising complex. These companies are great advertisers and advertising has become the volerium steel that is losing its edge. It’s becoming duller and duller.
In addition, the firms are largely dependent on distribution that is in structural decline. Specifically, brick and mortar grocery distribution.