Before we get into this, let me get 2 things on the record:
- I usually opt not to provide an arm-chair POV about a company’s marketing, plan, etc. Why? Simple, I don’t have access to the real data, like they do and I don’t know what their real objectives are. There’s nothing worse than a marketer from the outside, without access to those 2 crucial pieces of information, offering recommendations and critique.
- These are in fact my ramblings and opinions. They could be completely wrong, because again, I don’t have access to their data, insights, sales figures, product pipeline forecast, etc.
So, that begs the question, why even write anything? Simple, the news that P&G is basically blaming a the new found popularity of beards for their slumping razor sales, has been in all my social feeds. Being a marketer, I have a lot of marketers in my feeds. Many of them are providing some type of POV, which in turn inspired me to get my thoughts down…in a longer format than 140 characters.
Let’s get out the known facts, first:
- P&G’s earnings are down 15.5% from a year ago. source
- Sales in their grooming category (which is where their Gillette business is located) were flat. source
- The decline of Gillette didn’t happen overnight. It’s been ongoing for a few years, with major launches from competitors, like the Schick Hydro eroding share quickly. source
- The grooming category (P&G’s words, not mine) is not just made up of razors for your face. It’s much broader. It covers everything from body grooming, man-scaping, bikini waxing, mustache shaping and so much more. source
- Innovation in that broader grooming category, combined with lack of innovation by Gillette/P&G in the category has contributed to their eroding share. source and source
- New direct competitors have appeared in the space like Dollar Shave Club, Harry’s and Bevel.
- Beyond direct competitors we’ve seen a resurgence in the experience of shaving and grooming. For example, look at the rise of places offering hot towel straight razor shaves.
That’s a lot to digest. The reason I struggle with the simplistic summation of the Gillette financial performance, by P&G, as: the hipster movement is the problem, is because it sounds like a cop out. While at Campbell, we weren’t allowed to use the “weather” as rationale for sales performance. If you will, a poor quarter could not simply be explained by saying, “well it was an unseasonably warm winter.”
When I look at how P&G has characterized the current situation:
Increased interest in facial hair
and they’re clear lack of hubris when new disruptive competitors started entering the market
Gillette spokesman Damon Jones said his company became aware of the Dollar Shave Club the day it launched because of the Internet buzz. He said the shaving giant isn’t worried about losing market share, in part because other subscription-based companies have tried and failed, he said.
It makes me think of this fantastic article by the New York Times’ Digital Bits blog, titled, “Disruptions: Innovation Isn’t Easy, Especially Midstream.” The great writeup by Nick Bilton, outlines why companies like Kodak and Polaroid struggled to evolve. To oversimplify, when 1 product, feature of category of your business is such a dominant lion share contributor to financial performance, it’s very difficult to invest in other categories. Why? The fear of harming the existing cash cow business creates an environment of paralyzation. The perceived risk of rocking the boat, stops further innovation. This is what makes companies like Apple growing and those like Microsoft stagnant.
P&G has a lot of smart people. I know this because every organization I’ve ever worked at waits for P&G to say or do something on the record, before taking the plunge. After all, if the smart people in Cincinnati say it works, it must work. Yes, I’m serious. I’m sure they have a team of people thinking about how to reverse their slumping Gillette business. I’m not hear to pass judgement, but I would offer 2 pieces of advice.
- Don’t double down on today at the expense of tomorrow.
- Every business is open to disruption today. Create a team focused on being the anti P&G/Gillette. Yes, I’m serious. It’s an awesome project. You take a team of up and coming leaders, from across the company. They’re given the fun and important task of answering 1 simple question, “if you were us, but you weren’t confined by our traditions, existing process, etc., where would you take the business next, to disrupt ourselves and the industry.” Now asking the question is easy. Turning the answers from that team into real action, is far more challenging.
Oh, and by innovation, I don’t mean making a 10 blade razor. Adding more blades ins’t innovation, it’s a short term product improvement. Think bigger. Look toward behaviors mapped against a trendscape to regain the growth and trim the competition.