Buyout Of Dollar Shave Club Could Spell Trouble For Gillette

BOSTON (CBS) – As the dust settles on Unilever’s billion dollar buyout of Dollar Shave Club, an analyst thinks Gillette may have been left in the dust.

Not a bad price tag considering Dollar Shave Club has never once turned a profit.

“I think it was a very strategic and well thought out move on behalf of both Unilever and Dollar Shave,” said Kantar Retail’s E-commerce and Digital Insight Executive Reid Greenberg. “Dollar Shave Club was able to quickly build a pretty powerful business in relatively short order. In the first two days, they had over 12,000 customers.”

In the end, it was a smart idea.

Greenberg added, “with a product, by the way, that is incredible from a continuity perspective, this is another example of a company that has really taken advantage of a customer that is basically in for life.”

After all, these customers will tend to stick around.

“You know a man’s beard is going grow every single day of their life,” said Greenberg.

And when you drill down on the numbers of Dollar Shave Club, it makes more sense.

“Their customer acquisition costs are going to diminish over time,” Greenberg said. “You’ve got such a powerful pipeline of new consumers coming up.”

But then what about Gillette?

Gillette Shave Club is really not gaining the same scale as Dollar Shave or even Harry’s at this point,” said Greenberg.

This could spell trouble down the road.

“Dollar Shave club is looking at about 3.5 million visitors per month. Gillette is at about 330,000 visits a month,” Greenberg said.

This leaves Gillette with some work to do.

Greenberg added, “they need to rethink what their offer is, how do we appeal to that ’20 something dude.'”

Sounds like a plan anyway, but Greenberg is skeptical.

“I just don’t know if they’ve got that clout to be able to do it.”

Which means turning Proctor and Gamble’s Gillette on a dime.

“Gillette needs to think about a different, unique selling proposition that’s going to appeal to that broader audience,” said Greenberg.

And Gillette may have another issue. It sued Dollar Shave Club for patent infringement and may now have to battle Unilever instead.

WBZ NewsRadio 1030’s Jeff Brown Reports

More from Jeff Brown
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