Who would have guessed that men’s razors would have held the answer to a potentially game-changing revolution in retail?
For that matter, who would have guessed that Dollar Shave Club, the viral sensation famous as much for its commercials as for its inexpensive men’s grooming products, would have made the headway in the market that it did? Launched in March 2012, DSC rode the waves created by its clever marketing to thumb its metaphorical nose at entrenched businesses stuck in outdated retail models.
Or, at least, that’s how the story used to go. Because now that Unilever is in charge of DSC, its innovative relationship with consumers and its future cache with them, things could get very interesting indeed in the home goods market.
In a statement on the acquisition, Unilever President of North America Kees Kruythoff openly admitted to snapping up its newest subsidiary on account of its unique place in the purchasing lives of its consumers.
“Dollar Shave Club is an innovative and disruptive male grooming brand with incredibly deep connections to its diverse and highly engaged consumers,” Kruythoff said in a statement. “In addition to its unique consumer and data insights, Dollar Shave Club is the category leader in its direct-to-consumer space. We plan to leverage the global strength of Unilever to support Dollar Shave Club in achieving its full potential in terms of offering and reach.”
It’s a self-evident fact that Unilever would want to grow DSC given its apparent potential. How that growth might come about is less clear, especially since the two brands would seem to operate on different models. Unilever has established itself primarily as a supplier to retailers, while DSC has carved out a direct-to-consumer sales model that bypasses the merchants that keep Unilever’s core businesses thriving.
In an interview with Recode, DSC CEO Michael Durbin explained that he and Kruythoff had originally started talking through these differences seven months ago, and it was just now that they hammered out a vaguely detailed plan moving forward.
“We weren’t looking to be acquired … but [Kruythoff] did a really great job convincing us of a few things,” Dubin told Recode. “[Namely,] the economies of scale they can bring in a lot of different areas [and] how ambitious and aggressive and innovative they are.”
What DSC gets out of the deal is obvious: The resources a company the size of Unilever can provide in terms of marketing and distribution speak for themselves. What Unilever gets out of it – besides the equally obvious benefit of direct sales – is murkier, if only because it would seem to run counter to its main business to begin trying to emulate the DSC model.
However, in an interview with The Guardian, that’s exactly what Unilever CEO Paul Polman said his company might do.
“I think you will see implementations of the learnings from them in businesses we already have outside of the U.S.,” Polman said. “Then we will look at opportunities to introduce the model in other countries, where you need a certain penetration of online shopping.”
It should speak volumes that the head executive from Unilever, one of the world’s largest consumer goods manufacturers, is openly musing about his company’s efforts to possibly employ a direct-to-consumer sales model. Body soap and antiperspirants might not make an online retail empire overnight, but they do kick out another leg under the table holding up brick-and-mortar merchants’ lunch.
After all, if shoppers can buy even the most basic consumer goods direct from manufacturers themselves with all the savings that entails, then in-store retailers will have another enemy to join their online rivals.
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