P&G Looks to Perfect the Art of Shaving
Procter & Gamble
is clearly set on finding new ways to sell its products and part of that
is taking the company’s brands directly to consumers.
Consider that P&G
has:
- Acquired licenses to
operate its Mr. Clean Performance Car
Wash concept in over 40 states; - Worked with TheEssentials.com,
an independently owned website that only sells products manufactured
by the consumer products giant; - Invested in Ocado, an
online grocer in the U.K.; - Just acquired the The Art
of Shaving, a high-end chain that provides grooming services along with
products primarily to a male consumer base.
The Art of Shaving,
which operates 36 locations around the U.S., also sells its own branded
goods at merchants including Bloomingdale’s and Nordstrom. The company’s
five-blade razors sell for $150 and up while retail prices on its brushes
start at $55.
P&G has worked with
The Art of Shaving in the past with the two companies partnering on shaving
products that used Gillette Fusion blades.
P&G
spokeswoman Kelly Vanasse told the Business Courier of Cincinnati that
the acquisition would help the company
"learn a lot about operating retail locations" and would broaden
"our footprint in prestige."
Discussion Question:
What do you think of P&G’s acquisition of the Art of Shaving? What
are your thoughts on its experimentation with different methods of selling
its products directly to consumers?
There’s no way to better satisfy the consumer than to manage the process in every way possible…and that includes consumer-direct selling.
If I look at the model used by some of the major oil companies in branding quick lube centers, it appears to give them a multiple approach to consumer satisfaction, whether it be retail store sales, sales through dealerships and repair facilities, or through their own outlets.
It seems to me that P&G is attempting to create some type of “channel ubiquity” for its brands and the consumer-direct and other options they are exploring seem appropriate for time-starved consumers and younger consumers who are more technically oriented…good for them!
In today’s world, “Knowledge is power” and the more you know the more power you potentially will have. The same question was asked when Apple started to open their retail stores. If P&G is smart enough to use the insight they gain to build more and better product that the consumer will want this will be a major win. Instead of paying for market research they may even turn their market research into a profit center.
P&G revolutionized marketing and continues to do so.
And as a former brand manager at Gillette, I can tell you that they will stop at nothing to own the men’s shaving market, from the single edged razor blades that are still big sellers in many developing countries to (in this case) the most sophisticated shaving systems around. Obviously, this has not changed with Procter’s acquisition of the company.
With all the rapid shifts in marketing and changes in consumer shopping habits it makes sense for a manufacturer and marketer of P&G’s scale to understand the various business models. By piloting on many fronts in (relatively) low cost ways, P&G gets a front row seat in understanding retail operations, online selling model and direct to consumer business dynamics. It’s a smart investment in R&D which has always been their strength. It may one day yield a way around private label and helps them avoid being caught flat-footed in the future so kudos to them for exploring a lot of options.
P&G is late to the channel exploration party. Lauder was there in 1997 when it bought Aveda to explore the salon channel. There are some advantages to being second but none to being 47th! 🙂
In today’s more frugal and green economy, $55.00 razors seem excessive yet shaving brushes have a green panache. They may be in a business that allows them to better position their products. If that that is their goal, they should consider franchising The Art of Shaving in Brazil.
P&G is will dominate this. They have been actively touring the area I live in to setup physical P&G stores for their products.
P&G’s willingness to experiment keeps driving new growth. They are achieving a new product success rate of almost 50%, way ahead of the industry average of 15-20%. They have been experimenting with new ways to deliver the solution very successfully–dental care, Swiffers, and the list goes on.
Lafley has been quoted often about Innovation: “Fail early and fail often.” Experimenting in the marketplace is tricky, but it’s an important way to get critical feedback. Better to learn earlier in product development than later!
P&G is smart to buy The Art of Shaving, particularly given their ownership of Gillette. While there are manufacturers in other categories who have tried (and even failed) with this strategy, I would not bet against them.
The challenge remains, however, how well they will connect the experience and data from running a retail business into the customer insight that (should) go hand-in-hand.
P&G, like many other companies selling and directly touching customers, is not exactly a leader is the area of CRM and customer marketing. They still weigh options such as online advertising against direct-to-customer marketing. It will likely take more than investing in, owning and operating retail businesses to make them truly customer-centric.
One of our colleagues previously posted that P&G is late to the game. While this might be true, I respectfully disagree that this will hurt P&G. P&G tends to take their time when they are looking at new ventures, especially when they are on the retail side, or selling direct to the consumers. But once they get the strategy right, I would not want to bet against P&G. I think their Mr. Clean Care Washes will be a big hit, and will be a national brand. I think the same thing can happen with Tide branded laundromats. And of course The Art of Shaving is a small retail chain that will never be the size of McDonald’s, but can expand nationally while providing P&G with some great customer feedback.
This is a great move on P&G’s part. It makes you start to wonder what innovation Colgate is bringing to the CPG world, or are they simply sitting back and watching?
Shaving is definitely NOT an art, but a painful necessity. No “Art Of Shaving” moniker can suspend our disbelief. Most of us shave in one way or another except, perhaps, for Susan Boyle (and me on vacation). And then there’s clipping instead of shaving, for manscaped, stubbly, metrosexual men (and some women, I’m told). Waxing? My wife’s acquaintances who work in that industry say it’s painful and seriously off-putting.
Vibrators are now installed in the handles of supermarket razors. That’s just weird. But apropos to the discussion, we should distinguish between electric razors and supermarket razors. The history of supermarket razors has always been “sell the blades and give the handles away for free.” Has anything changed? No, except the handles can now cook breakfast and the blades look like Venetian blinds. And of course, all are more expensive. Will the prices be less when marketed directly to consumers? Perhaps, echoing the 800.PetMeds.com marketing model of home delivery. That’s the only way I see this initiative working.
I think you are going to see more efforts from the CPG industry to establish a direct consumer relationship. One driving force behind this is the threat of private label goods. CPG manufacturers simply can’t sit back and let their retail channels chip away at their market share with increasingly valuable store brands. They’ve got to step up to the plate and innovate.
If interested, my most recent post on the Alice.com blog is here: http://tr.im/nsSN
I was going to write how much I enjoy the Art of Shaving stores and the products which I really connected with when I first found them. I stock up when I am back in the States because few of their products are available in Hong Kong.
Then I read M. Jericho Banks’ comments about shaving. Wow!
I am sorry that this daily exercise is so painful for you.
I have a full, but neatly trimmed beard AND shave every day. I have a beautiful chrome shaver and brush set I bought at Marshall Field’s (remember them?) years ago, and my wooden soap bowl with Art of Shaving Sandalwood shaving soap in it. For 1 minute a day, I give myself a little bit of self-indulgence. I miss a few days now and then, to give myself the challenge of cleaning up a slightly grown-out beard, and I like the cleaning up aspect as well.
Shaving, like many tedious life activities, can be turned into a Zen experience if you allow it.
I think that P&G buying the AOS is brilliant. I just hope they keep focused on the experience side of it and don’t loose focus as they obviously have with Max Factor, news of which was also announced recently.
OK, I know that this story is about men’s products, but can I just say that I’m disappointed that P&G is discontinuing Max Factor cosmetics in the US? Women know that Max Factor’s pancake makeup is the closest thing to Spackle that can be purchased…!
Sure there have been other entries into the higher-end men’s health and beauty category (as mentioned earlier in this discussion), but none of them have the muscle, dedication to excellence and experience of P&G. The entire men’s category (health, beauty and wellness) continues to be under-developed and have huge upside.
I applaud the acquisition and will surely watch as P&G broadens the line and paints this category with an ever-widening brush.