From cutting edge, Gillette launches Fusion

Drug Store News, Sept 26, 2005 by Antoinette Alexander

BOSTON -- The Gillette Co. is rolling out during the first quarter its next generation in men's wet shaving systems, a move that is likely to spell in creased pressure for rivals, given Gillette's historic success in trading up consumers.

During an unveiling event earlier this month in New York, Gillette chairman, president and chief executive officer James Kilts said the new Fusion shaving platform will be the biggest and most un important brand Gillette has ever introduced," raking in an estimated $1 billion in sales within three years.

With a first quarter launch date, the five-blade Fusion will be the first blockbuster for the Procter & Gamble-Gillette entity, assuming the integration remains on track for fall as company executives expect. However, that means that a smooth execution will be key for P&G-Gillette, as it will mark the first new razor to be introduced by P&G.

Ensuring trade-up from Gillette's successful M3Power battery-operated razor, Fusion will be available in both a battery-powered version and a standard razor.

To result in less skin irritation and more comfort, the blades are spaced 30 percent closer than Mach3 blades. On the back of the blade cartridge is a Precision Trimmer blade, which is a single blade that allows men to trim sideburns, shave under the nose and shape facial hair with greater precision.

The Fusion razor with two cartridges will retail for about $9.99, and the Fusion Power with one cartridge and a battery will cost about $11.99. A four-pack refill cartridge for Fusion will cost $12 to $13, while a four-pack refill for Fusion Power will cost $13 to $14. Company executives are confident that consumers will be willing to pay the higher price.

"Fusion seems to incorporate enough consumer-relevant innovation as to be able to extend the current level of trade-up," stated Morgan Stanley analyst William Pecoriello.

Another concern: confusion among consumers as the Gillette portfolio--not to mention the shave category, in general--becomes more fragmented.

Nonetheless, Gillette has a proven track record of trading up consumers through product innovation.