The traditional principles of strategy dictate you should strive to be distinctive from your competitors and separate yourselves from them in the minds of your customers.
Dollar-shave – the online home delivery shaving company- is clearly distinctive to the number one shaving company Gillette which sells through stores. And dollar-shave has used this distinctiveness ( and the resulting lower price) to carve s profitable niche in men’s shaving.
Gillette has- up until now- stuck to its traditional business model but with declining success.
Gillette has been facing stiff competition. Now, in an effort to win back customers, it has started to copy its competitors.
After slashing prices across the board and launching a marketing campaign called “Welcome Back,” Gillette has now introduced a new way to buy blades directly from the company.
Called Gillette On Demand (https://ondemand.gillette.com/) , the service mimics the direct-to-consumer models of competitors like Harry’s and Dollar Shave Club. It allows customers to either buy blades as needed or build a custom subscription.
Three of Gillette’s products are offered as part of the service, acting as three separate tiers: disposable Sensor 3 razors ($11 for eight razors), the tri-bladed Mach3 turbo ($13 for five refills), and the top-of-the-line Gillette Fusion Proshield ($21.45 for four refills).
Subscribers are rewarded for their loyalty with their fourth order free, while others can text or email the company at any time to order for a one-time purchase.
Gillette is increasingly feeling the threat from startups like Harry’s and the now Unilever-owned Dollar Shave Club, which are eating away at its dominance in the global men’s-razor business.
Gillette claimed a US market share of 70% as recently as 2010, but it fell to 54% in 2016, according to the Wall Street Journal https://www.wsj.com/articles/gillette-bleeding-market-share-cuts-prices-of-razors-1491303601 , which cited data-tracking firm Euromonitor.
Harry’s and Dollar Shave Club now combine for a 12.2% market share, up from 7.2% in 2015, according to Euromonitor.