Just months after slashing the price on some of its razor blades in an unprecedented move, Gillette said on Wednesday it is introducing a slew of products with enhanced features at not extra cost as well as new lower-price options.
Gillette, a flagship brand of consumer products behemoth Procter & Gamble (PG), has typically raised prices on new product introductions that usually included the latest and greatest in shaving technology. But feeling the pressure from online rivals like Dollar Shave Club (a unit of Unilever) and looking to win back some of the market share lost in recent years, Gillette is not focused solely on its top-of-line blades this time around.
The brand’s M.O. in a market it long dominated—even as it had relatively high prices—has had to be revised as the likes of Dollar Shave Club and Harry’s have won over customers with less expensive products, and innovations such as subscription services, home delivery, and quirky ad campaigns. In March, P&G started to cut prices on some Gillette products by as much as 20%, and said that there were gaps in Gillette’s assortment between its priciest products and cheaper items it wanted to fill before rivals did.
Gillette’s new products include the Gillette5 five-blade cartridge that is less expensive than its higher-priced Fusion5, and on par with similar products by Dollar Shave Club, Harry’s, and Schick. Other new items will include two new products for less than $10 and improvements to three products with more of a focus on medium and lower prices. All new products are set to hit the market in January.
It’s easy to see why P&G wants to get Gillette back to where it was. P&G, which bought Gillette for $54 billion in 2005, saw its market share shrink from a peak of 71% a few years ago to 59% last year, as Fortune has reported. In its most recent quarter, organic sales in its grooming unit fell 6%, hurt primarily by Gillette’s problems.
“Historically there has been a bias toward the high end,” P&G Chief Executive David Taylor told the Wall Street Journal in an interview on Thursday. “The risk with that is you can still grow, but you have a smaller group of users who are willing to pay ever higher prices for better performance”
And this move will be a big test for P&G to show it can reinvent itself even as it continues to face off with activist investor Nelson Peltz and his campaign to win a seat on P&G’s board. Peltz won a board seat by a tiny 43,000 vote margin, independent inspector IVS Associates found last week, a result P&G is challenging.