Startup Razor-Blade Company Disrupting Market – With Killer Video

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Several weeks ago, a colleague of mine who works in video production and development forwarded me a link to a company video. (How he has the time to troll around the web to find such things is beyond me.)

For this particular video, however, my colleague didn’t have to troll too long or hard.

That’s because this video had already garnered millions of hits (you may have seen it already), features a person in a bear costume, a machete, some sparkling comedic writing and production execution, and, for my money, probably the best marketing tagline you could ask for: “Our Blades Are F***ing Great.” What are they hawking? Mail-order men’s razor blades.

Hands-down the most effective marketing video I’ve ever seen. Do yourself a favor:

But I’m not the only one of the above opinion. Numerous viewers (including my colleague) have said that they feel the urge to get online and order razors immediately. For this small company, Dollar Shave Club (DSC), that’s exactly what they want. A recent article in the Wall Street Journal notes that while the DSC won’t disclose its total number of customers, they did say 12,000 people signed up in the first 48 hours of the video going live.

That same WSJ article notes the pain that DSC is alleviating for men all over the country — razors getting too expensive.

With increasing raw material prices of late (stainless steel, plastics, etc.), it’s no wonder Gillette and others have had to consistently raise their prices to keep their margins intact — they’ve upped the number of blades in each razor from two to three, four, five, and now, even six, to remain competitive.

Sanford C. Bernstein consumer products analyst Ali Dibadj told the WSJ, “Over the past 40 to 50 years you haven’t had more volume growth in this category, there aren’t more razor blades than years ago…it’s all through pricing.” Conversely, these price increases force people to buy fewer razors than they normally would, which keeps demand for raw materials used in razors — stainless steel blades, for example — rather stagnant.

Razor blades (DSC’s are sourced in China and South Korea) are composed of special corrosion resistant steel alloy, preferably carbide steel, because it is made using a tungsten-carbon compound, according to the site MadeHow. Sandvik’s cold-rolled stainless strip grade 13C26, for example, contains 0.68% carbon, 0.4% silicon, 0.7% manganese, and 13% chromium, according to this spec sheet.

Will Gillette’s market share be dented by upstarts like these, touting lower pricing and increased convenience? Time will tell. P&G-owned Gillette controls 66 percent of the $12.8 billion global market for men’s razors and blades, according to Euromonitor International as noted in the WSJ. Schick is a distant second with 12.5 percent, and Bic SA has 5.2 percent. Besides, a Gillette spokesman said that for the low prices DSC flaunts, Gillette can come back and compete with a product at the exact same price points.

One thing’s for sure, however: a remarkable new way for a scrappy start-up to really get in on the game — in any industry — is to create a truly creative, kickass video.

Keep an eye out — MetalMiner, and the new MetalMiner IndX℠, may soon have their own breakout video…no promises of a dancing bear, but the wheels, my friends, are turning.

 

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