Fighting for the edge in shaving - Blade wars: shaving report

DSN Retailing Today, March 8, 2004 by Molly Prior

As players in the shaving category know all too well, when it comes to selling blades and razors in the mass channel, it's a cutthroat world. The intensifying blade fight between the categories two largest players, namely Gillette and Schick, have shifted the industry's attention away from the whitening war--which ignited between Procter & Gamble's Crest brand and Colgate-Palmolive's Colgate brand several years ago--to the men's & women's grooming aisle. Both of these heavyweights, along with several smaller players such as BIC, are competing for a piece of the billion-dollar blades and razor pie. In 2002, the U.S. blades and razor business reached $2.2 billion, according to Gillette.

Schick, which was acquired by Energizer Holdings from Pfizer Inc. for $930 million in March 2003, upped the ante when it introduced another blade into a fight that was previously a three-blades battle. In fall 2003, Schick unveiled a four-blade shaving system called Quattro.

At the time of its Launch, Energizer said launch, Energizer the four-blade razor, which Gillette claimed infringed on its patent for the arrangement of three blades in a razor cartridge, would jumpstart product development within the company's newly acquired Schick unit.

While Schick has yet to hint at its next big introduction to the market, the launch did succeed in generating excitement in the razor category, which several analysts said had waned since the initial launch of Mach3.

As the clear leader in the group, Gillette has worked to keep things fresh with a string of Mach3 incarnations that include Mach3 Turbo launches.

Most recently, Gillette introduced Mach3 Turbo Champion with the help of a glitzy new television campaign featuring a fiery red, high performance racing car, intended to reflect the color and sleek design of the newest Mach3 Turbo razor.

The spot, which features the Mach3 tagline "The Best a Man Can Get," offers a money-back guarantee to anyone who is unsatisfied that Mach3 Turbo Champion provides the "world's best shave."

The new advertising campaign, created by BBDO NY, airs on late night and primetime television shows such as "Late Night with David Letterman" and during professional men's sports programs. Right on the heels of Mach3 Turbo Champion's launch, Gillette inked a multiyear marketing deal with six top NASCAR drivers. The team, dubbed the Gillette Young Guns, includes Kurt Busch, Dale Earnhardt Jr., Kevin Harvick, Jimmie Johnson, Matt Kenseth and Ryan Newman. The deal with NASCAR covers multiple Gillette brands and establishes the company as an official status sponsor in the shaving, alkaline batteries and oral care categories.

The Gillette program, which began at the start of the 2004 NASCAR season, includes retail events, a national sweepstakes, NASCAR print and broadcast advertising and licensing. Gillette will invest more than $20 million in the promotion.

Retailer buyers contend consumers are often captivated by the newest razor on the market. "This is a category all about getting the consumer to trade up," said David Shanker, division president of client service and consulting for Information Resources Inc. He added that products offering men a smoother, easier and faster shave will drive growth.

That said, Gillette's flurry of marketing activity is intended to distract consumers' attention away from the newest razor on the market, Schick Quattro.

While Gillette, the overall leader in the razor category, is aggressively protecting its No. 1 position, the company--for the time being--is sticking with three-blades to drive sales. However, in a category all about innovation and add-ons, Gillette will follow the September inauguration of Schick's four-blade Quattro with the three-blade M3Power this spring. Taking cues from Gillette's Oral-B brand CrossAction battery-operated toothbrush, Gillette aims to power razor sales with its new battery-operated M3Power, a wet-shave razor said to outperform all razors in its class, including Gillette's own Mach3 Turbo.

The powered razor features a gentle pulsing action that, according to Gillette, stimulates hair upward and away from the skin, making it easier to shave more thoroughly.

The M3Power is the result of a multiyear product development effort involving several Gillette brands, namely Braun and Duracell. Its blades are coated with a thin, uniform telomer, giving the M3Power the smoothest blade surface ever, said Peter Hoffman, president of blades and razors for the Gillette Co.

Gillette expects M3Power, which will be available for a suggested retail price of $14.99 in May, to substantially fuel growth of the blade and razor category, the same way that Mach3 Turbo has carried over the last two years, said Hoffman. In its first year, Mach3 Turbo achieved $300 million in sales.

Last month, Gillette implemented a 2.8% price increase over the entire franchise. Hoffman added that M3Power is looking for shelf space at the expense of competitive brands, rather then fellow Gillette razors.

While Hoffman called M3Power "the standard of excellence," he said Gillette's next-generation shaving system--already created and tested--is in its product pipeline and will launch at a later date.