The Razor’s Edge

Bigger and better retail promotions needed to capture POS purchases.

A cash-cow regimen — shaving — went south last year for mass-market retailers, including supermarkets. Razors and blades weren’t exactly flying off shelves.

Several factors have converged since 2008 to dampen consumer demand.

Shoppers, especially men, approached retailers’ shelf sets with trepidation over high price points as they weighed cost versus value and a slew of razors and blades designed for every need and budget.

“Balancing performance and price within the razors and blades market has always been on consumers’ minds, but price has weighed more heavily in their perception as of the past couple of years,” says Tim Barrett, U.S. research analyst for Euromonitor International, based in Chicago.

Beth Weinstein, trade marketing manager — shavers at Bic Consumer Products USA, in Shelton, Conn., notes that “shopping habits were changed forever during the recent economic challenges. Through this challenging economic climate, consumers have become conditioned to seek better value across many aspects of their lives, resulting in razor systems being challenged in the marketplace.”

Jim Wisner, president of Libertyville, Ill.-based Wisner Marketing Group, likens razor/blade shelf sets to picking a TV channel these days. “Back in the day, when there were three networks, or single- and double-edge blades, we could narrow it down pretty quickly. Now you have 600 channels, and there is that kind of variety on the [razor/blade] shelf,” he says.

Impact of Culture

Since fashion and lifestyle trends began prescribing the unshaven look, men simply aren’t shaving their faces as frequently. Fashion and celebrity influencers, social acceptance of facial hair, Movember (an annual cancer fundraiser) and the economy all play into the manscaping trend.

Last year, Procter & Gamble’s Gillette capitalized on this movement by launching its Fusion ProGlide Styler ($19.99). Schick, however, was out with its Quattro Titanium Trimmer ($10.99) in 2008, before the unshaven trend caught hold.

Additionally, a dichotomy has developed in men’s shaving. There’s the prestige Art of Shaving, an upscale retailer bought by P&G in 2009, where men can indulge themselves, and then there’s Dollar Shave Club, a monthly online blade subscription service, launched in 2011, for those seeking a low-cost alternative and who don’t want to shop at a store.

The online service has spawned others — 800razors.com, ShaveMOB, Manpacks, Club ShaveMate and Harry’s — all offering a better shave deal than you can find in the store aisles.

Retailers are not only facing off against these new startups in the shaving category, but also big e-commerce retailers like Amazon.com, drugstore.com and Soap.com. Last year, Seattle-based Amazon launched a Men’s Grooming store platform on its website, featuring razors/blades as well as skin, body, hair and oral care products.

Trading Down

Sales statistics for the 52 weeks ending Dec. 1, 2013, from Chicago-based Information Resources Inc. (IRI) demonstrate the challenge retailers face in moving the mature razor/blade category forward.

Total blade sales (replacement cartridges and disposables) were slightly flat, down 0.01 percent at $2.6 billion, but units sank 3.0 percent to $300.7 million. Supermarkets and drug stores came close to equaling each other in dollar volume on blade sales. In many HBC categories, drug stores can usually take the larger share of category dollars over food chains.

Food retailers rang up $518.2 million in blade sales, flat at 0.5 percent, and drug stores sold $532.7 million in blades, up 1.8 percent. Yet supermarkets moved more blade units, 61.4 million units, compared with 48.9 million units for drug stores. Both food and drug blade sales units fell, by 2.7 percent and 5.2 percent, respectively.

Given the trading-down environment, it’s not surprising that disposables experienced an uptick in sales and units in blades. While replacement cartridges were down 1.4 percent to $1.4 billion in sales and 6.5 percent to 88.5 million units across mass-market outlets in the IRI reporting period, disposable blades were up 1.8 percent to $1.1 billion in sales and 1.5 percent to 212.1 million in units across mass-market outlets.

“The shaving performance of disposable razors has greatly improved over the past several years, enhancing the price/value equation for consumers,” says Bic’s Weinstein, pointing to the company’s new Soleil Glow razor for women as a good price/value example. Soleil Glow has a suggested retail price of $7.49 for a package of three razors.

Razors posted $433.3 million in dollar sales, down 5.5 percent, and slipped 1.2 percent in units to 55.1 million across mass-market outlets. Both supermarkets and drug stores racked up nearly equal sales losses in razors: 6.5 percent and 6.8 percent, respectively.

Bic has concentrated on offering consumers a better value through larger pack sizes, which decreases the retail price per razor, Weinstein points out.

Forward Motion

Retailers can expect product advances to continue.

“Some [manufacturers] are upgrading their product lines — for example, Bic with its new Hybrid Advance,” observes Euromonitor’s Barrett. “In addition to its presence in the disposable space, it is bringing its cheaper blades to razor systems and is seeing success, as this product is functionally similar to competitor offerings but slightly cheaper.”

Wisner says retaining the razor/blade business for supermarkets is a “serious challenge,” calling it a low-priority category for food chains. The opportunity is to make the category more efficient via SKU rationalization and capture POS sales at the shelf through promotion, he adds.

“Consumers are very savvy, and so visibility of the shaver category in feature ads and in-store displays is critical,” Weinstein agrees. “Supermarkets should maximize opportunities to gain impulse purchases by supporting key-growth razor brands, such as Bic, with off-shelf/display exposure, particularly when tied to feature ads or FSI placements.”

Barrett sees private label as retailers’ biggest opportunity: “Getting into private label is the best avenue for success for any specific channel, due to its attractive retailer margins.”

Getting into private label is the best avenue for success for any specific channel, due to its attractive retailer margins.”
— Tim Barrett, Euromonitor International