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Inside the Success of Dollar Shave Club and Why DTC Changed the Retail Landscape

Inside the Success of Dollar Shave Club and Why DTC Changed the Retail Landscape

In 2012, an outfit called Dollar Shave Club posted a wry video of co-founder Michael Dubin strutting around a fake factory bragging about "f*cking gre

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In 2012, an outfit called Dollar Shave Club posted a wry video of co-founder Michael Dubin strutting around a fake factory bragging about “f*cking great” blades. The idea of $1 razors seemed a little crazy. But in 2016, Unilever spent $1 billion–crazy money–to buy the company. I wrote Billion Dollar Brand Club to chronicle the DTC phenomenon, which has also yielded Warby Parker, Glossier, and Casper. Here are what I find to be the book’s most compelling details.

My biggest surprise? Finding out these guys had limited product knowledge

Many of these entrepreneurs knew remarkably little about the products they decided to sell, whether it was razors, mattresses, or contact lenses. But they knew that they felt they were being gouged by the big players, and they figured there had to be a better way. So they reset the terms of competition.

CREDIT: Halie Chavez

I was amazed at the damage these brands could cause the incumbents

The e-commerce revolution has only just begun, and visionary entrepreneurs–the faces behind the “billion dollar brands” in the book–are in the vanguard. They seized on technology to disrupt the world of physical goods in ways that were unimaginable not long ago. Who could have imagined Gillette would lose a big chunk of its market share? That Sealy and Serta would be under siege, and Victoria’s Secret on the defensive? Against all odds, DTC startups are changing the way we buy things.

I noted an interesting comparison in sports

The advent of DTC selling was the consumer-product world’s Moneyball moment. Moneyball–the use of data analytics as explained in Michael Lewis’s book of that name–transformed sports. The idea was to help poor teams like the Oakland A’s better compete with rich teams like the New York Yankees. In DTC retailing, technology has forever lowered the barrier to entry. Entrepreneurs no longer need retail shelf space, or a huge ad budget, or their own factory to take on corporate giants. This doesn’t mean all DTC startups will become billion-dollar brands. Some will, while others will be modest successes and still others will be niche players; the weakest will fail. But the retail and consumer products game–like baseball–has changed forever.

My takeaway

To be successful, new brands must be nimble. They continually need to be on the lookout to spot and embrace the latest technology to bind customers to them. Also, customer experience is increasingly a differentiator. Brands that connect with customers by building a better total experience–ease of purchase, speed of delivery, seamless returns, responsiveness to complaints–improve their odds of becoming lasting brands.

This article is from Inc.com

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