The grooming company's innovative ad strategy pays off
Being a disrupter might land you a billion dollar deal. That's the case for Dollar Shave Club, which has reached an agreement with Unilever for the consumer packaged goods giant to acquire the male grooming company for a reported $1 billion price tag.
Founded in 2012, Dollar Shave Club initially made headlines for its pithy advertising, which featured the company's CEO Michael Dubin as an endearingly passionate pitchman arguing that consumers didn't need brand name razors.
The work, which was created by the company's in-house creatives and continued to feature Dubin prominently, became a point of differentiation for Dollar Shave Club beyond its mail-order business model.
It makes sense then that the company's advertising strategy will stay in-house, instead of shifting to one of Unilever's myriad agencies once it is under Unilever's brand umbrella. "Things aren't changing," according to a spokeswoman for the Dollar Shave Club.
Unilever declined to comment beyond its press release.
"If Unilever is smart it won't muck with it," said Allen Adamson, founder of Brand Simple Consulting. "Typically, with an acquisition like this, most companies will homogenize the company they acquire and force their way of doing things on it, force them to use their agencies, do it their way and in doing it that way they miss a big opportunity to change how they market and how they advertise."
He added: "Because it's such a different business I don't think they're going to do that here. They will let it do what made it successful and see how they can help."
Patrick Collins, CEO of Grace Blue Acquisition doesn't think Dollar Shave Club should be "worried that [their] ad approach or brand would be limited by this acquisition. Looking at their experience with Axe, Unilever has allowed that brand to flourish and have fun, which is proof for DSC that when a brand and a message work, Unilever leaves it alone."
Britt Bulla, senior director of strategy for branding firm Siegel + Gale agreed. "I think it's not going to change much," said Bulla, noting that the brand experience of Dollar Shave Club might be more important than its advertising strategy. "If Unilever keeps that pure I'm not worried; if Unilever doesn't, they probably lose a customer."
Since it was founded five years ago Dollar Shave Club has grown significantly; it now has 3.2 million members and it made $152 million in sales last year. The company has also evolved from solely a razor subscription service, adding a skin care line and other grooming products as well as its own men's lifestyle site, Mel.
"Dollar Shave Club is an innovative and disruptive male grooming brand with incredibly deep connections to its diverse and highly engaged consumers," said Kees Kruythoff, president of Unilever North America in a statement.
He added: "In addition to its unique consumer and data insights, Dollar Shave Club is the category leader in its direct-to-consumer space. 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."
Dubin will remain CEO of the company. "DSC couldn't be happier to have the world's most innovative and progressive consumer-product company in our corner," said Dubin in a statement.
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