Remember that viral Dollar Shave Club commercial from 2012? The one where CEO and Founder Michael Dubin introduced the subscription-based razors and men’s care products service (and his handsome-ass grandfather) to the world? The one that ends with Dubin dancing in front of an American flag and using a leaf blower to make it rain dollar bills?
Dubin is going to need a bigger leaf blower. But he certainly can afford a new one.
That’s because Unilever has bought Dollar Shave Club for a reported $1 billion cash.
“In addition to its unique consumer and data insights, Dollar Shave Club is the category leader in its direct-to-consumer space,” said Kees Kruythoff, President of Unilever North America. “We plan to leverage the global strength of Unilever to support Dollar Shave Club in achieving its full potential in terms of offering and reach.”
What the acquisition means for Dollar Shave Club
Certainly, Dubin’s handsome-ass grandfather would be proud.
Back in May, during an interview with CNBC’s Courtney Reagan at the first-annual Shoptalk, Dubin said scaling is his biggest challenge. Running a company with 20 people is different from one with 75, which is different from one with 200. But at each point, Dubin said the growth was what the company promised investors it would be.
Since Unilever announced that Dubin will continue to serve as CEO of Dollar Shave Club, it means he’ll not only still be in charge, but will be able to tap into the minds on many smart people.
“[We] couldn’t be happier to have the world’s most innovative and progressive consumer-product company in our corner.” Dubin said. “We have long admired Unilever’s purpose-driven business leadership and its category expertise is unmatched.”
And while having a subscription-based shipping model can take a strain off shipping costs and transit times, Dollar Shave Club, which recently brought its fulfillment in-house in Torrence, CA, and will soon be opening a fulfillment center in Ohio, will potentially have more distribution points.
What the acquisition means for Unilever
At Shoptalk, Dubin said Dollar Shave Club “was not the first ecommerce merchant to sell razors online, and certainly is not the last.” One of those competitors in the subscription shaving service is Proctor & Gamble’s Gillette brand, which launched Gillette Shave Club last June (and filed a patent infringement lawsuit against Dollar Shave Club in December).
With Dollar Shave Club in its stable of brands, Unilever can take Proctor & Gamble on in the subscription shaving service game.
Not only that, but Unilever, which sells consumer packaged goods primarily in the bricks-and-mortar space, had the potential to jump into direct-to-consumer sales, and can potentially add personal care product brands, such as AXE, to the Dollar Shave Club lineup.
Or better, imagine Unilever rolling out the subscription model for brands such as Hellman’s (Mayo of the Month Club?) and Ben & Jerry’s… Hey, foodies can dream, too, right?
What’s more, Unilever can learn from Dollar Shave Club about how to connect one-on-one with the consumer.
At Shoptalk, Dubin said to be successful in selling something that is a commodity, you have to build a brand experience that evokes emotion from the advertising to the unboxing experience. The Dollar Shave Club ecommerce site now includes content which gets its members to come back to the site daily. Members (Dubin does not consider subscribers to be “customers”) also receive a monthly magazine (with a circulation of 3.1 million) with their order.
Tim Parry is Multichannel Merchant’s Managing Editor, and the lead programmer for Growing Global.