After Disrupting Men’s Shaving, Dollar Shave Club Targets Another Niche

Dollar Shave Club is bringing the no-nonsense approach that it has used to disrupt the shaving products market to the men’s fragrance space.

Since launching as a subscription model, direct-to-consumer retailing company for razors and blades in 2011, Venice, Calif.-based Dollar Shave Club has expanded into hair care and other men’s toiletries. The move into fragrances began with cologne last November, and was followed by the introduction of deodorants and antiperspirants early this year.

“We saw that one of the holes we had in our portfolio of products … was that we were missing the category of fine fragrance,” said John Milligan, vice president of product development.

Dollar Shave Club, which was acquired by Unilever in 2016, has four million-plus members who can both subscribe to receive regular monthly deliveries of toiletries and add on various products as needed.

The company disrupted the traditional store-based men’s shaving category, which has been dominated by long-established players like Schick and Gillette, with its online direct-to-consumer service that quickly captured about 8% of the $2.8 billion men’s shaving market as of last year, according to Euromonitor. Harry’s, another direct-to-consumer startup in the category, has also rapidly gained share behind Dollar Shave Club.

Dollar Shave Club first catapulted into the spotlight with its humorous, surreal YouTube video that quickly went viral and has since amassed more than 26 million views. The video features the company’s founder and CEO, Michael Dubin, touting cheap razor blades — $1 per month — and telling potential customers to “stop paying for shave tech you don’t need,” a reflection of the company’s earnest, common-sense voice that continues to define the brand.

Unlike the shaving category, the fragrance industry is highly fragmented, Milligan said, and the company felt there was room for a player that could deliver a high-quality product at an affordable price. What’s more, adding fragrances to the company’s online assortment of grooming products provided a solution for men who may be intimidated by the fragrance assortments available in department stores.

“The timing was right for us to go into this,” said Milligan. “We saw that no one had really nailed it in the industry, so we thought the opportunity was there to give it a go.”

The fragrance line, dubbed Blueprint, has far exceeded sales expectations — to the point that the supply chain has been struggling to meet demand, he said.

Research shows that consumers are open to buying men’s fragrances online, although in-store sales also continue to grow, often driven by promotions. According to The NPD Group's U.S. Prestige Beauty point-of-sale data, sales of men's fragrances at brick-and-mortar stores rose 5% year-over-year for the 12 months ending March 2019, while online sales of men's fragrances over the same period fell 2%.

The global men’s grooming products market overall has been growing steadily, and is expected to reach $78.6 billion by 2023, for a compound annual growth rate of 5.3% from 2017 to 2023, according to ResearchAndMarkets.com.

A 2016 report on the fragrance industry from consulting firm A.T. Kearney highlighted the opportunity for online fragrance sales, particularly among men and those consumers who have become averse to brick-and-mortar shopping.

“The emerging segment of consumers who only shop online affords an opportunity for marketers to create a more relevant experience for consumers, especially male shoppers and older shoppers who are more likely to shop online,” the report stated.

The report found that that 42% of consumers said easy replenishment led them to make their most recent fragrance purchase online, by far the most common impetus for e-commerce fragrance buys. These online shoppers are mostly driven by “limitless” assortment (71%), best price (69%) and free shipping (58%), the report found.

Offering fragrance collections

Milligan said Dollar Shave Club decided to offer an assortment of six different fragrances after research showed that 50% of men use more than one cologne, often choosing one for work and another for going out to dinner, for example. The company spent several months working with some of the world’s top perfumeries to create three “fresh” scents designed for daytime use and three “warm” scents designed for evening use.

Michael Dubin, the CEO and co-founder of Dollar Shave Club, is a fragrance aficionado himself, said Milligan, and played a role in the selection process, helping ensure the line was distinctive and of high quality.

“We looked at the landscape of fragrance, and made sure we ticked the boxes of each of the key areas of male fragrances,” Milligan said. “Our fragrance interpretations might be slightly different, but they are in the core families of what’s called the fragrance genealogy.”

Dollar Shave Club also coordinated the development of the Blueprint fragrance with the development of its deodorant line, so that the scents of the two would not clash. That required a bit of tweaking to ensure that the scents “layered” each other well, said Milligan.

“Typically you will smell that deodorant all day, and wanted to be sure those two didn’t fight with each other,” he said.

Packaging is key

The company spent almost as much time working on the packaging as it did developing the fragrances themselves, Milligan said. Dollar Shave Club is known for using a voice that speaks directly to men who are seeking practical, quality solutions for their personal care routines, and the company wanted its packaging to reflect that ethos.

“Our philosophy is that we are a straight-talking brand, and we have been since the get-go,” said Milligan. “We wanted something that had broad appeal, that wasn’t polarizing, and that could appeal to a mass audience.”

The packaging is refined and masculine, and free of the overly designed flourishes that often appear on designer colognes, he explained.

Pricing was another important component of the rollout. The company found that consumers would not feel confident in the efficacy of cologne with a relatively low price tag, but at the same time Dollar Shave Club did not want to price itself out of the “everyman” market with a high-priced cologne.

It settled on a price of $50 for the standard-sized, 50 ml bottle, which is about half the price of many men’s designer fragrances found in department stores.

One of the key learnings derived from promoting the new fragrances was that customers were very interested in buying the 15 ml trial-sized bottles, which Dollar Shave Club offers in three-pack boxes. Each box contains either three daytime scents — dubbed The Fresh Collection — or the three evening scents, The Warm Collection.

“We did an awful lot of consumer and member insights before the launch, and the great thing is that [those insights have] been borne out,” said Milligan. “The only thing that surprised us were the inquires we received about making the trial sizes a retail product. We didn’t predict that would be a demand. We had that fairly normal, mid-sized bottle, and we thought that would be the way most people would go.”

As for the future of the line, Milligan didn’t rule out the possibility that the company could expand into more fragrances — once it gets caught up with the current backlog in demand.

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