Gillette Is Betting on Texting to Compete With Dollar Shave Club

May 09, 2017

Procter & Gamble's (pg) Gillette is renaming and overhauling its online subscription service in a bid to fend off popular upstarts stealing market share.

The company, which competes with Dollar Shave Club and Harry's, said on Tuesday it has changed the name of the service to "Gillette On Demand" from "Gillette Shave Club." It has also added features like the ability to order new cartridges just simply texting the word "BLADES." It is also offering every fourth order free.

The move comes just weeks after P&G acknowledged its U.S. grooming business has taken a hit from new competitors. Organic sales in its overall grooming business (of which Gillette is the biggest piece) fell 6% last quarter because of fewer items sold and lower prices in shave care to compete with Dollar Shave Club, which was bought by P&G arch-rival Unilever last year for $1 billion, and Harry's.

P&G Chief Financial Officer Jon Moeller told Wall Street analysts on a conference call last month that U.S. grooming products sales have been affected by "silent trends and by increased competition which we're addressing very explicitly." Gillette, a long time global leader in shaving products, still helps P&G command a huge market share, 65% globally, last year. But online rivals have been chipping away at it.

Gillette sees an opening with customers who get too many blades in the mail, since it is hard for a shopper to forecast blade need. In a press release, P&G said its research found 41% of former subscription customers said they've gotten more blades than they needed. Mark Jeffreys, Gillette's brand director, said in a statement: "This new service puts them in control without having to choose between convenience and flexibility, or between great quality and value."

In February, P&G announce some Gillette prices would fall as much as 20% starting March 20. The company has a lot riding on Gillette withstanding all this young competition: the consumer products giant bought Gillette for $54 billion in 2005.

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