Dollar Shave Club’s approach to marketing: Then and now
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People who work in advertising love watching ads.
Everyone else? Not so much.
Except for this one. If you haven’t seen Dollar Shave Club’s first ad, let us indulge you before you read more.
With more than 27 million views as of this writing, Dollar Shave Club’s YouTube-only ad is easily one of the most successful of its kind. The day it was released, Dollar Shave Club’s server crashed because it couldn’t handle the website traffic. The day after that, the company gained 12,000 new customers at $1 per month for its subscription razor service—$144,000 in annual recurring revenue overnight.
Before you start to feel bad about your content, there’s some stuff you should know about Michael Dubin; Dollar Shave Club’s now ex-CEO, and YouTube itself.
Dubin studied improv for eight years at New York’s famous Upright Citizens Brigade. That’s where he met the ad’s director, Lucia Aniello, who’s now known for her work on Broad City and Hacks.
The ad was released in March 2012, just as YouTube’s “golden age of content” had reached its peak, according to several experts. In October 2012, YouTube would tweak its algorithm to prioritize videos with longer watch times over higher view counts—which could have changed the course of Dollar Shave Club’s history if the revision had been made just months earlier.
And while Dollar Shave Club may have launched with a bang! They would have fizzled out if they hadn’t reached beyond their flash-in-the-pan success for more ways to innovate and capture market share. If Dollar Shave Club were going to take on Gillette, it would need more than a viral video to do it.
Keep reading to find out how Dollar Shave Club took on Gillette as a market leader in razors and built a subscription model before anyone else was doing it.
Dollar Shave Club marketing timeline
2011: Launches operations and first website
March 2012: Releases first viral ad, gains 12,000 subscribers overnight
November 2012: Launches in Canada and Australia
June 2013: Releases second viral ad promoting One Wipe Charlies
2014: CEO Michael Dubin live streams his colonoscopy for a Colon Cancer Alliance campaign
2014: Launches other men’s products, like shave butter, wet wipes, and moisturizer
2015: Expands product line to include hair care products
May 2015: Launches MEL Magazine, known for its absence of sponsored content
December 2015: Gillette files a patent infringement suit against Dollar Shave Club
2016: Hits 3.2 million subscribers
July 2016: Acquired by Unilever for $1 billion
February 2018: Launches in the United Kingdom
2019: Releases Blueprint 103 cologne
2020: Launches podcast, I Learned a Thing in the Bathroom
January 2021: Michael Dubin resigns as CEO
March 2021: MEL Magazine folds, announces they’re seeking a new buyer
Dollar Shave Club’s viral video: Would it succeed on YouTube in 2021?
It’s been nine years since Dollar Shave Club’s viral ad, and we can’t help but wonder…
Would the ad have been just as successful in 2021?
If the medium is the message, we need to compare the YouTube of 2012 to now.
Since 2012, YouTube content has increased by at least 700%. In 2021, an ad like Dollar Shave Club competes with that much more non-ad content as people have begun to consume more videos by creators. YouTubers with 1 million subscribers can now earn up to $36,000 per week from AdSense alone if they make at least two videos per week.
In 2020, all top ten ads watched on YouTube were made by large corporations like Apple, Nike, and Hyundai—there isn’t a small business in the bunch. If you’re watching an ad on YouTube, you’re likely watching a pre-or mid-roll ad during a video made by a creator.
Before October 2012, when Dollar Shave Club’s ad saw runaway success in March of that year, YouTube’s recommendation algorithm—responsible for the videos on your homepage and in your suggestions—prioritized videos with high view counts. But that model didn’t work out so well; as a result, there were a lot of clickbait titles that tricked people into watching videos that didn’t represent their descriptions.
YouTube’s recommendation algorithm is now more sophisticated in that it uses a combination of surveys and other engagement signals to predict viewer satisfaction. The higher the likelihood of satisfaction, the more times a video will appear on users’ homepages and in their suggestion reels.
We’ll never really know whether or not YouTube’s current recommendation algorithm would have served up Dollar Shave Club’s ad in the same way. It’s obvious, however, that the ad would have come up against a lot more competition, ad fatigue, and a sophisticated algorithm with more checkpoints than what existed in 2012.
Key takeaway: If you have a similar idea for an ad, an omnichannel approach is a much better bet in 2021.
The real reason behind Dollar Shave Club’s ad success
If content is king, the ad upholds some fundamental laws:
- Communicate product benefits in the first 10 seconds: “For $1 a month, we send high-quality razors right to your door.”
- Repeat the URL twice in the first 10 seconds: “Hi, I’m Mike, founder of DollarShaveClub.com. What is DollarShaveClub.com?”
- Deliver an unexpected surprise early in the video: “Are our blades good? No. Our blades are f*cking great.”
- Expand on features after the viewer has been entertained with humor: “Each blade has stainless steel blades and an aloe vera lubricating strip….”
If you watch the ad, you’ll notice all of the above happens within the first 30 seconds. The rest of the ad—the grandfather with polio, the random man in a bear suit, the obnoxious dollar bill leaf blower—is icing on the comedy cake that likely convinced people to share the ad but not necessarily to convert and purchase a subscription.
Dollar Shave Club communicates price and convenience benefits to the viewer within 16 seconds.
Dollar Shave Club’s ad was a success not because of the 10 million views it received in 48 hours but because of the 12 million paying customers who decided to take them up on their offer. So what was their offer?
To compete with Gillette—which owned 70% of the razor market in 2010—Dollar Shave Club needed to compete on two fronts: price and convenience.
In 2012, people were spending about $40 per month on razor blades, and buying them at the store was a hassle. Because of their high theft rate, most razors were kept under lock-and-key, and buying them meant fetching a clerk to give you access.
With a keen understanding of these pain points, Michael Dubin got people’s attention with a shocking offer: $1 per month plus shipping for razors delivered to your door. It’s no wonder people jumped at the offer—it was a no-brainer.
- Dollar Shave Club customers converted on price and convenience, not because the ad was funny
- Viewers shared the ad because it was funny and original––but humor still came second to communicating clear product benefits
- Humor was the glue that made product features and benefits stick––years later, people still remember the photo of the grandfather who had polio and didn’t need “ten blades”
Subscription model marketing: Then and now
Subscription models weren’t novel in 2012 when Dollar Shave Club officially launched, but they hadn’t yet become the norm they are today.
Pioneered by the newspaper and magazine industries in the 18th century, subscriptions were originally used to fund large printing runs to keep publications afloat.
And while B2B SaaS subscriptions have been popular since the dawn of security software, direct-to-consumer subscriptions have been slower to take hold due to behavior norms. People have been going to a store or market to purchase household items for centuries. It wasn’t until the pandemic that the convenience of home delivery for necessities and luxury items became a true staple of modern living.
In 2012, HelloFresh was just getting started, struggling to gain a foothold amidst high customer churn, low-profit margins, and supply chain complexities. MeUndies had also just launched in 2011, and they’ve since sold 17 million pairs of underwear—but nearly 25% of them were purchased in 2020.
A lot has changed since the earlier eras of DTC subscriptions. From January 2012 to June 2019, subscription business revenue outpaced S&P 500 companies and U.S. retail sales five times (18.2% versus 3.6%). In 2018, McKinsey reported that the subscription market has grown by more than 100% per year since 2013.
While there are many nuances as to why different subscription-based businesses succeed and fail, three Dollar Shave Club growth factors emerge as obvious: convenience, choice, and scarcity.
Dollar Shave Club’s brand of convenience
Dollar Shave Club CEO Michael Dubin says he started the company after talking to a friend’s father at a party about the cost and hassle of purchasing razors. After gaining access to a warehouse surplus full of cheap razors, they set up operations. They got to work on communicating the simplicity and convenience of purchasing a razor subscription for delivery.
Dollar Shave Club’s original How It Works page
Dollar Shave Club’s original website—a far cry from its current website that reflects an expanded product line through Unilever—uses a How It Works page to explain the convenience of the subscription:
“Dollar Shave Club couldn’t be simpler. Select one of our great razors, pay one low monthly fee, and we send ‘em right to your door. No more over-paying for fancy brand name shave tech. No more forgetting to buy your blades.”
Dollar Shave Club’s brand of choice with decoy pricing
Next, Dollar Shave Club made sure to offer customers three subscription choices based on their needs: The Humble Twin (two blades per razor, $1 per month), The 4X (four blades, $6), and The Executive (six blades, $9).
Dollar Shave Club original subscription choices
With his marketing background, Michael Dubin understood the important role of choice when making purchasing decisions.
Business experts often talk about the paradox of choice when consumers make decisions about what to buy. Too much choice and you risk paralyzing the consumer with a complex evaluation process. Too little choice and the consumer may walk away because they don’t feel like they have agency over their decision.
Most DTC experts agree that when ecomm businesses are young, they should focus on a limited product line to perfect their product quality before expansion. Dollar Shave Club did exactly that, focusing only on razors—but offering three subscription customization options to create the decoy effect.
The decoy effect happens when consumers change their decision between two options when faced with a third option: the decoy. The decoy is priced to make one of the other options more attractive—in this case, Dollar Shave Club’s $6 subscription as opposed to its $1 option. Here, the $9 option is the decoy.
Dollar Shave Club’s brand of scarcity
Upon launch, Dollar Shave Club was a victim of its success.
Within 48 hours, they sold 12,000 subscriptions and dealt with an inventory crisis to fulfill orders immediately. Being the advertising Goliath he is, Michael Dubin saw that as an opportunity to create perceived scarcity (which was, of course, very real).
After he ran out of razors, Michael Dubin sent an email to everyone who tried to purchase a subscription, letting them know their launch had been so successful that Dollar Shave Club had run out of inventory.
The perceived scarcity generated even more word of mouth beyond the launch video, and people ordered subscriptions in droves after Dollar Shave Club managed to replenish their warehouse stock.
- Dollar Shave Club paved the way for other DTC subscriptions for household items
- Convenience is the foundation on which so many successful DTC subscriptions like Dollar Shave Club are built
- Dollar Shave Club used the decoy effect to nudge people toward a slightly more expensive subscription type than its advertised $1 per month
- Dollar Shave Club took advantage of an inventory shortage to communicate scarcity—and create perceived demand
How Dollar Shave Club stole market share from Gillette
In 2010, Gillette owned 70% of the men’s shaving market. In 2019, the average cost of a Gillette razor blade cartridge set was about $20.
Harry’s, another major Dollar Shave Club competitor, also competes against Gillette on price. However, they still come in at about $12 for a handle and razor cartridge—$3 more expensive than Dollar Shave Club’s priciest subscription option.
So it’s no wonder it only took two years for Dollar Shave Club to claim 10% market share on razors by competing on price and convenience. Michael Dubin saw an opportunity for Dollar Shave Club to cut overhead costs by designing, manufacturing, and shipping the razors themselves so that they could sell their products for less than half the price of Procter & Gamble Gillette’s parent company.
When asked about his business model, Dubin is frank and direct. He tells Inc, “It's not too hard to copy the techniques of the big guys. Razor technology is out there for anybody to duplicate. … There's a real sense of relief that someone is finally doing something about the price of name-brand razors. Our customers feel like they've decided to liberate themselves from brand name slavery."
Procter & Gamble felt so threatened by Dollar Shave Club’s model that it filed a lawsuit for patent infringement in 2015. They complained that Dollar Shave Club was sourcing its razors from Dorco Co., a Korean razor manufacturer that uses patented technology to make Gillette’s Fusion, Mach 3, and Venus razors.
While the terms of the settlement remain confidential, P&G walked away happy with the deal—but Dollar Shave Club is still making razors. The lawsuit was settled after Unilever acquired Dollar Shave Club in 2016 … which may have shielded the company from any financial damage.
Key takeaway: Michael Dubin recognized an opportunity to shake up an industry that was ready for an overhaul. Similar to how Sarah Blakely disrupted the pantyhose industry with SPANX as a superior product, Dubin trusted his gut, jumped on an opportunity, and competed against big corporations on price and convenience—all without overthinking.
Post-Unilever acquisition: MEL Magazine … content success or failure?
In 2016, Unilever acquired Dollar Shave Club for $1 billion, which made Michael Dubin the founder of an official unicorn. He also earned $90 million from the deal and a surprising amount of autonomy.
With the influx of cash and the freedom to expand on marketing efforts in any way he wanted, Dubin hired Josh Schollmeyer, former Playboy vice-president of digital content, to establish what would become one of the most beloved content marketing initiatives by a DTC brand: MEL Magazine.
When Dubin hired Schollmeyer, he told the ex-Playboy staffer that he wanted to create a brand-supported men’s lifestyle magazine that struck an Esquire-meets-Vice vibe … and that’s exactly what he got.
After a slow start as a newsletter, Medium blog, and finally a standalone website, MEL Magazine found its voice, which Schollmeyer described as “a different men’s publication that was much more intellectually curious than it necessarily was consumer-based.”
On top of its first bonafide investigative piece about attractive ISIS soldiers wooing young women, MEL Magazine published stories like:
- What it means to perform masculinity as a trans person
- What it’s like to cover men’s issues in the era of #MeToo
- The complete history of working out
- Whether CBD can cure erectile dysfunction
- The role of women in gay porn
While technically a branded publication under Unilever, MEL magazine maintained complete independence from the Dollar Shave Club brand with the exception of a mailout with every product subscription. That meant they could cover men’s wellness topics such as health, relationships, sexuality, style, and entertainment without the slightest bit of sponsored content.
Journalists and editors alike were flabbergasted by the publication’s revenue model, which was non-existent. Bankrolled by Unilever and staunchly against advertising, MEL Magazine left people wondering how long Dollar Shave Club would let the good times roll and keep up the separation between the content and the brand.
For a long time, MEL Magazine seemed untouchable. Just last year in May 2020, editor-in-chief Josh Schollmeyer said in an interview with Canada News Media, “We just completed our best traffic month ever, and posted two of our best days ever in April as well. Overall, our traffic is up about 30 percent since sheltering-in-place began more or less nationwide.”
Then, just ten months later, in March 2021, MEL Magazine announced it would be shutting down and seeking a new buyer—which they still haven’t found at the time of this writing.
Dubin and Schollmeyer have been tight-lipped about why Unilever cut the publication from the Dollar Shave Club brand, but it’s not difficult to speculate about what may have happened:
- Michael Dubin resigned as CEO in January 2021, and MEL Magazine lost its biggest champion
- Unilever decided MEL Magazine wasn’t contributing enough ROI for Dollar Shave Club to remain in operation
- Brand-supported publications like MEL Magazine are rare—and require unconditional support by their parent brands to publish high-quality content without advertising
Key takeaway: MEL Magazine was praised as one of North America’s most beloved brand-supported publications … but whether or not they were successful is subjective. On the one hand, MEL Magazine published some of the best men’s wellness content on the internet. On the other hand, you’d have to dig deep to see a connection between the publication and Dollar Shave Club due to their lack of sponsored content.
We may never know, but we’d be curious to find out how much MEL Magazine traffic generated revenue for Dollar Shave Club. Evidently, not enough to satisfy Unilever.
What's next for Dollar Shave Club: An omnichannel retail brand
Five years after selling Dollar Shave Club to Unilever, CEO Michael Dubin announced his departure. His last day was January 19, 2021.
Many are left wondering what will happen to the brand now that Dubin’s marketing expertise has left the building. Similar to Steve Jobs’ departure from Apple before his death, Dollar Shave Club is now living on without Dubin’s brand of je ne sais quoi—and you can sort of ... tell.
In 2020, before Dubin’s departure, Dollar Shave Club announced its first moves as an omnichannel brand. The company’s entire line of men’s grooming products is now available in several stores, including Walmart, Target, Walgreens, Rite Aid, and Safeway.
At the time, Dubin told WWD, “We’ve been online only and we believe in order to be successful, brands of all kinds need to be thinking omnichannel. It was the right time for our brand to evolve as we expand distribution significantly.”
To solidify the shift, Dollar Shave Club launched the “We Got You” campaign in 2021. While the company’s latest commercial still retains much of the brand’s humor, its high production quality, musical numbers, and expanded focus beyond razors also solidify the company’s departure from the gritty DTC brand it once was to … another Unilever brand you can buy in a store.
We’re by no means knocking Dollar Shave Club’s switch from DTC to an omnichannel retail brand. Retail distribution is a marker of success for many brands that got their start online.
But it’s now clearer than ever that the Dollar Shave Club of 2012 has grown up, found some stability, and settled into a new corporate job with full benefits and maybe a pension plan. You may still see a youthful sparkle in its eye from time to time, but its wardrobe is starting to blend in among all the suits and ties that surround it. We hope it can find a way to stand out again.