Energizer CEO: P&G is hurting the razor business

[Craig_From_Cincy]

I read this article today and thought it might be if interest to some members:

Energizer CEO: P&G is hurting the razor business




"The U.S. razor and blade business is shrinking, and it’s partially Procter & Gamble Co.’s fault, a top competitor said. The problem is “hyper-levels of promotional spending by our leading competitor,” Ward Klein, CEO of Energizer Holdings Inc. (NYSE: ENR), said in an earnings call.


The Town and Country, Mo.-based Energizer makes Schick shaving products. The U.S. razor and blade market declined two tenths of a percent over the last 12 weeks, he said. That was compared with a 52-week growth trend of 1.7 percent."

http://www.bizjournals.com/cincinnati/blog/2013/05/energizer-ceo-pg-is-hurting-the.html


So is Gillette only able to successfully sell large quantities of its expensive, flagship Fusion razors and refill cartridges when their price is subsidized with promotional support (ie, on sale)? I had read a year or two ago that Fusion hadn't been the home run that Gillette had hoped, partially due to its high price in the face of the great recession. In response, Gillette was changing its marketing to assert that the Fusion will give X number of shaves and as a result is a good value.


And now, in a storyline right out of Mad Men, comes the news that P&G has fired the firm that has handled Gillette's advertising for the past 80 years:

P&G brand parts ways with longtime advertising firm


After a nearly 80-year relationship with BBDO, Procter & Gamble Co. moved its Gillette men’s grooming business to Grey Global Group, Ad Age reports.

http://www.bizjournals.com/cincinnati/news/2013/04/29/pg-brand-parts-ways-with-longtime.html


Of course none of this is germane to our interests here at B&B, but I thought that news of the 21st Century razor wars might be of interest to some members.

Cheers,

Craig

 

[Toothpick]

$32 for 8 cartridges. It's such a rip off it makes me sick thinking that they can get away with the prices they charge. Awwwwe the market declined two tenths of a percent...let me break out the tiniest violin in the world and play them a tune.

 

[Mick]

I gotta tell you. It must be rough making billions a year. Real rough. My heart goes out to those companies.

 

[Craig_From_Cincy]

$32 for 8 cartridges. It's such a rip off it makes me sick thinking that they can get away with the prices they charge. Awwwwe the market declined two tenths of a percent...let me break out the tiniest violin in the world and play them a tune.

Agreed 200%. The price for Fusion cartridges is outrageous. I

 

[Redzone]

Does this mean our method/addiction/hobby actually IS cheaper?
Ducking for cover........

 

[rxonmymind]

Not surprised at all. Just went to Costco and cringed when I saw the price of a pack of blades. I'm 100% for corporation making a profit but damn, be the best at whatever you make. They will soon find themselves in the same position at Detroit automakers did in that a smaller upstarts will come along offering A: cheaper products or B: longer lasting ones. and find their share of the market slowly eroded away. They can blame the advertising agency all they want but a company charging absurd prices shoot themselves no mater how slick or handsome of a Hollywood/ sports star pitches for you on the benefits of a five bladed hydra. Now another up & coming company has a six blade razor. What are you going to do P&G? Seven blades?

 

[Topgumby]

Well, given the fact that they do seem to be selling those four buck cartridges, more power to 'em.

I couldn't see paying the asking price and found DE shaving to be both more satisfying and less spendy, but if P&G can convince other Joe Sixpacks that they should shell out for Fusion carts because they are easy to use and work reasonably well (and I'd say that's really the case) then my hat is off to them. I begrudge them not one penny of profit as long as I'm free to choose another route in the good ol' free market.

If somebody else is getting rich that doesn't make me poorer, and if in fact the whole world dropped the carts and embraced traditional gear next week, I think it would only make my stuff more expensive to get and take a little tiny bit of the fun out of it. It's nice to have a quirk that not everybody else has.

 

[cb91710]

I just pitched my M3 (that I use for my headshave) and went back to the Fusion.

In the 6 months that I used the M3, I had more nicks, cuts, and blood loss than I've had in over a year of using a Straight.
I should note that I use the straight on my head when I have more than 2-days growth to mow down.

I know they are pivoting heads, but the head angle on the Fusion just works a lot better for me than the M3, and as for the nicks, I don't know what it is... but a couple of weeks ago, I took a chunk out of the top of my ear that took an hour to stop the bleeding.

In retrospect, I recall that the 5 or so years that I used the M3 before going to the Fusion in 2006, I do remember dealing with a lot of nicks on my chin (I didn't headshave at the time), and was always bouncing back and forth between the M3 and a Norelco electric.

I get a full week of headshaves on one cart.
I could probably go longer, but if I push it, it's not pretty, so I change the cart every Sunday night.

 

[Craig_From_Cincy]

I just pitched my M3 (that I use for my headshave) and went back to the Fusion.

In the 6 months that I used the M3, I had more nicks, cuts, and blood loss than I've had in over a year of using a Straight.
I should note that I use the straight on my head when I have more than 2-days growth to mow down.

I know they are pivoting heads, but the head angle on the Fusion just works a lot better for me than the M3, and as for the nicks, I don't know what it is... but a couple of weeks ago, I took a chunk out of the top of my ear that took an hour to stop the bleeding.

In retrospect, I recall that the 5 or so years that I used the M3 before going to the Fusion in 2006, I do remember dealing with a lot of nicks on my chin (I didn't headshave at the time), and was always bouncing back and forth between the M3 and a Norelco electric.

I get a full week of headshaves on one cart.
I could probably go longer, but if I push it, it's not pretty, so I change the cart every Sunday night.

Rich,

A particular phenomenon has been noted by many members over at another wet shaving forum that I belong to. Many maintain that when Gillette rolls out a new flagship shave product (eg, Fusion) the previous generation of product (eg, Mach 3) declines in quality. Some claim that this is done purposefully by Gillette in order to drive consumers to the newer more expensive product. Members have noted that the Sensor blades declined in quality once Mach 3 was rolled out, that Mach 3 blades declined in quality & performance one Fusion was introduced, and that regular Fusion blades have suffered in quality now that Fusion ProGlide has been introduced. I've never verified this myself as I've been using a DE exclusively for about 10 years now. I'd be interested to know if other members have ever noticed this happening with Gillette.

 

[BarbaGnosa]

This is fascinating news. What it shows is a company and strategy which may be peaking or have peaked. I suspect this is no surprise to Gillette -- they did sell themselves to P&G. I think for sometime now at least a few thought leaders within the company and industry have been wondering how long they can maintain the scam upon which their product strategy is based before enough consumers get mad as hell and aren't gonna take it anymore.

Gillette's growth is now tracking population growth, which is a rather small for any large company, especially consumer products. And, according to the report, this requires mammoth, saturation advertising. What Gillette seems to be doing is pushing to ever more complex (more blades! vibrators!) and expensive razors and cartridges, pushing cartridge prices up, and locking in customers by pushing them to save money by buying 8 cartridges at a time to save money. The natural response to rising price and long term investments is to extend the duration of each cartridge, which leads to an extended shave and skin quality decline throughout a longer period of each cartridges use.

The more people I talk to about shaving, the more instantly gripe about usurious prices, and crappier shaves, especially further along the life-time of each cartridge, etc. Then they say they must have sensitive skin. Really? Now rising numbers, seemingly the majority of American's have unusually sensitive skin, beyond the average, or even the mean? I suspect not. By definition, I'm sure it's not that their skin is out on the far end of the sensitivity bell curve as much as they fit squarely in the middle of guys whose skin is normally, naturally irritated by 5 blades, if not at first, then certainly by weeks 4-8 of each cartridge's use.

How not surprising then to see Gillette's latest products focus on sensitivity, with only 3 blades. Gillette's new products and growth seem to be coming from products designed to remedy/address the ills their previous/other products ARE CREATING! Gillette through saturation media and market domination is able to not only convince guys to shave with irritating ever more expensive cartridges, but believe that's the best solution available, and thus they push the cartridges to the point where they're messing up their faces. Guys increasingly seem to believe the fault is THEIR OWN, and so they've got to spend more money on premium priced 'sensitive skin' razors and products! From Gillette! no less, whose self-serving products and product and pricing strategies gave them 'sensitive' (irritated) skin' in the first place. It's like cigarette companies selling lite cigarettes to people who've been sensitized by smoking-induced emphysema to seek gentler cigarettes.

I don't know the source of the data for the shaving market, but if it has shrunk, does that mean people are shaving less, and thus simply not buying shaving products? Possibly -- facial hair is on a big upswing stylewise. But, I have a beard -- and I still buy lots of shaving products -- more than ever, now that I've joined B&B. And so do pretty much most guys I know with facial hair. Some buy even more products: shapers, an electric clipper plus shaving razor, mustache wax, etc. What this shaving market shrinkage may, in fact reveal is movement of the market AWAY from cartridge and electric razors, to traditional shaving: double edge, straight edge, and especially vintage and artisanal products, which are almost certainly NOT included (or vastly under-reported) on the shaving industry data cited in the article.

Gentlemen and ladies of B&B, WE in the traditional shaving movement are the vanguard -- we've taken the red pill! At least some are beginning to wake up and realize the scam -- it's called the traditional wet shaving movement -- and, to some degree, the no shaving movement: those who just trim with clippers (if they trim at all).

This could be significant information.

I will bet that Grey pushes Gillette/P&G into exploring more traditional shaving equipment. Grey has sophisticated market researchers, and fresh faces and voices will again suggest to Gillette growth strategies other than adding more blades, gimmicks, shave, skin and face destroying evil, sold with more mass media mind-control. That strategy seems increasingly exhausted. I suspect Grey will reinforce what must be at least a few young turks within Gillette and their market research agencies who must be suggesting Gillette attempt to actually provide better shaves and experiences. Look for these strategies to be explored in the next couple of years: They'll experiment with Art of Shaving and down/mid market offerings, hoping to gain more growth there. I wouldn't be at all surprised to see Gillette or AOS or possibly a new brand come out with a retro themed shaving offering tied to a major media franchise: Mad Men or Boardwalk Empire or Great Gatsby, etc, etc, in an attempt to ride a nostalgia wave with a mass media push aided by a familiar and trusted (HA!) brand such as Gillette or Art of Shaving, possibly in the background. Possibly a retro-Gillette theme, utilizing ad materials from the first half of the 20th Century (You'll have your Gatsby New, Boardwalk Empire Tech, Mad Men Slim, etc). They'll have to make it a kind of up-market, style driven offering because chances are high they'll have no other genuinely shave-improving protected intellectual property (patents) to sell, so they'll have to sell style, fashion, retro-glamour hype to get premium prices for what will cost no more to produce (and will probably offer no better shave) than a kit consisting of Weishi razor and Van der Hagen brush and soap, plus, of course, Gillette DE blades. Perhaps, to protect the market, they'll slightly change blade specs, so that you can use ONLY new configuration blades with their razors, and of course they'll legally attack anyone who rips off their copyrighted blade designs (or possibly patented, and it will take years before our antiquated intellectual property law system ever gets to deciding that dubious patent's merit). They'll offer it to a college educated, mid to up-market, style sophisticate audience (hipster wannabes, not cutting edge style innovators, but second or third level followers) first, and use that to build buzz, validate the market strategy, build social acceptance, and then extend it downmarket to go broad and big. If you want to be cool and fashionable, then, you'll have your retro Gillette Tech or SuperSpeed or Fatboy, but somehow updated (actual vintage Gillette razors will be considered geek chic and/or outdated because they lack whatever patented secret snake-oil they're now pitching as their secret sauce, but which in fact exists primarily to protect market share by exploiting intellectual property law).

Then again, perhaps Gillette won't move that quickly or at all, and the lead could be taken by someone like Harry's or DollarShaveClub.

The question for all traditional wet shaving market players now is how to prepare themselves to survive and capitalize on that.

I'm sure major shaving products companies, advertising agencies, market researchers have someone at least monitoring B&B and its social media brethren, and probably using them for active research. I'd love to see of those with professional experience in the shaving industry, in market research, in financial markets discuss the business implications here on the site, or eat least point to other sources of shaving industry research. What do these numbers mean? What's their take on the shaving industry and market?

 

[Craig_From_Cincy]

Excellent post BarbaGnosa!

 

[Eeyore]

Does this mean our method/addiction/hobby actually IS cheaper?
Ducking for cover........

It just means that Personna and Dorco are rolling over the floor laughing, because with each Gillette and Wilkinson move, their generic cartridges become more attractive to the public.

Why do you think that some many people stick to the original Trac / Atra design? They don't want to be ripped of for extra blades and gimmicks they don't need.

 

[Lexicon Devil]

This is a fascinating discussion. I have noticed an increase in Gillette television ads, I will have to pay attention to the content more. All I recall is how super-awesome and impressively thin they are now making the blades or something like that. I'll have to pay attention next time I see one.

 

[blzrfn]

The easiest way to maintain product position is to purchase your competition before they pose a significant threat. This is done in many industries and one of the best examples is the beverage industry. Going to the chilled beverage isle at your local grocery, not the beer section but the non-alcoholic beverages. In front of you there will be dozens or even hundreds of different brands and each was probably started as its own entity, but as soon as they developed a smidgen of market share they were bought out for a lot of money so that one of the big companies could absorb the growth. Snapple, RockStar, SoBe, Odwalla, and all the others are all owned by a small group of companies. Even if a company invented a new razor that would lower the cost or vastly improve the experience, chances are they would be owned by P&G or Energizer rather quickly.

 

[Go West Young Man]

Reading the article, it looks like REVENUE from blades/razors has dropped because P+G has had a lot of sales recently
Total VOLUME of sales are growing.

And that's all based only on the most recent 12-week period. The 6- and 12-month figures show consistent growth.

 

[cb91710]

Rich,

A particular phenomenon has been noted by many members over at another wet shaving forum that I belong to. Many maintain that when Gillette rolls out a new flagship shave product (eg, Fusion) the previous generation of product (eg, Mach 3) declines in quality. Some claim that this is done purposefully by Gillette in order to drive consumers to the newer more expensive product. Members have noted that the Sensor blades declined in quality once Mach 3 was rolled out, that Mach 3 blades declined in quality & performance one Fusion was introduced, and that regular Fusion blades have suffered in quality now that Fusion ProGlide has been introduced. I've never verified this myself as I've been using a DE exclusively for about 10 years now. I'd be interested to know if other members have ever noticed this happening with Gillette.

I would not generally agree with this. Honestly, I'll grab either Fusion or Proglide blades and honestly can't tell the difference.
And like I mentioned, when I went back to the Mach-3, it brought back memories that I had forgotten during the 5 years that I was using the Fusion for head and face. Like I said, that 5-10 years prior when I was using the Sensor and Mach-3 (and Atra) I was constantly bouncing back and forth between the carts, electric, or simply not shaving and having a beard as bad as the "disguise" in Team America.
The Fusion is the first cart that I've used that hasn't had me reaching for an electric from time to time.

Kinda PO'd SWMBO too... she dumped $75 into a new rechargeable Norelco a few weeks before I moved to the Fusion.

 

[chrisf8657]

I think this is an example of the pot calling the kettle black - both Gillette and Energizer charge way too damn much for their razors, P&G being the worst of the two.

 

[life2short1971]

I read this article today and thought it might be if interest to some members:





http://www.bizjournals.com/cincinnati/blog/2013/05/energizer-ceo-pg-is-hurting-the.html


So is Gillette only able to successfully sell large quantities of its expensive, flagship Fusion razors and refill cartridges when their price is subsidized with promotional support (ie, on sale)? I had read a year or two ago that Fusion hadn't been the home run that Gillette had hoped, partially due to its high price in the face of the great recession. In response, Gillette was changing its marketing to assert that the Fusion will give X number of shaves and as a result is a good value.


And now, in a storyline right out of Mad Men, comes the news that P&G has fired the firm that has handled Gillette's advertising for the past 80 years:





http://www.bizjournals.com/cincinnati/news/2013/04/29/pg-brand-parts-ways-with-longtime.html


Of course none of this is germane to our interests here at B&B, but I thought that news of the 21st Century razor wars might be of interest to some members.

Cheers,

Craig

I'm curious now to see how long before the ad agency folds.

 

[chris.hale]

Well, given the fact that they do seem to be selling those four buck cartridges, more power to 'em.

I couldn't see paying the asking price and found DE shaving to be both more satisfying and less spendy, but if P&G can convince other Joe Sixpacks that they should shell out for Fusion carts because they are easy to use and work reasonably well (and I'd say that's really the case) then my hat is off to them. I begrudge them not one penny of profit as long as I'm free to choose another route in the good ol' free market.

If somebody else is getting rich that doesn't make me poorer, and if in fact the whole world dropped the carts and embraced traditional gear next week, I think it would only make my stuff more expensive to get and take a little tiny bit of the fun out of it. It's nice to have a quirk that not everybody else has.

Totally agree. Before discovering the DE I was using a Tesco-branded Personna Tri-Flexxx because I refused to stump up for the latest Gillette offerings, but if they can convince people that they really need a five-bladed vibrating cartridge good for them.

 

[ZJ68]

P&G is hurting Schick's razor business. No surprise there, Gillette tries harder. Make better razors, Schick. Don't give Gillette free advertising on your packaging, either. When you wrote the Hydro 3 was better than the Mach 3, you might as well have written "We're second best, buy a Fusion."

So is Gillette only able to successfully sell large quantities of its expensive, flagship Fusion razors and refill cartridges when their price is subsidized with promotional support (ie, on sale)?

It seems rather insane not to buy them on sale. When I bought them, I'd wait for the convergence of a sale and coupon (it was never a long wait) and just buy a new razor + 2 cartridges. They cost about half as much as getting the cartridges by themselves.