3D-printed razor handles – the best a man can get?
With Razor maker, Gillette is one of the first brands of big FMCG companies that bets on mass customization through 3D printing. It’s a bold but much-needed move to revert the trend of losing market share and declining brand loyalty.
Fast moving consumer goods (FMCG) companies have been struggling to sustain historical growth rates over the past couple of years. A recent study by a global management consultancy indicates FMCG companies’ growth in TRS lagged the S&P 500 by 3% from 2012 to 2017 [1]. Procter & Gamble (P&G) is no exception and recently announced another round of restructuring to streamline the business [2]. FMCG companies have an increasing difficulty inspiring and connecting with their customers. One of the reasons frequently mentioned by industry insiders to explain this is the disruption of mass-market product innovation and brand building [1]. Millennials are looking for more unique experiences and products in their lives. They prefer new brands. Small consumer-goods companies capitalize on this trend to grow very fast [1]. The razor industry in which P&G’s subsidiary Gillette operates, has suffered badly from new entrants such as Dollar Shave Club [2, 3]. While P&G was trying to attract new customers with an arms race to add extra blades and features every year, Dollar Shave Club offered convenience and savings through a low-cost subscription service [4]. They were able to capture ~8% of the razor market in only a couple of years [4].
Mass customization is a trend which has been increasingly adopted by FMCG companies to (re-)connect with customers. And it works. Research has proven it increases brand loyalty significantly [5]. A widely popular example is the “Share a Coke” campaign of The Coca-Cola company where consumers could buy cans showing the first name of friends, family members or simply themselves [6]. Additive manufacturing has huge potential to bring mass customization to the next level, renew brand loyalty, and initiate a new wave of growth for FMCG.
Only a couple of weeks ago, Gillette launched “Razor maker”: it “gives consumers the power to create and order customized 3D printed razor handles, with the choice of 48 different designs (and counting), a variety of colors, and the option to add custom text” [7]. The online tool allows consumers to fully customize their razor handle to make it fully “their own unique piece”. The goal is clear: strengthen customer loyalty to protect and recapture market share in a market which is under attack from a series of smaller niche players. P&G tested the waters of 3D printing before [8], but the Razor Maker is their first “big bet” in 3D printing. Moreover, according to Formlabs, P&G’s 3D manufacturing partner, Razor Maker serves as one of the first examples of direct-to-consumer, end-use 3D printed parts worldwide [7]. This was made possible only due to recent technological advances. Printer heads can now deposit plastic material at 12 to 25 times the speed that was possible three years ago [9]. Many believe 3D printing could quickly become a dominant force in the economy [9].
As one of the world’s leading FMCG companies desperate to regain relevance with its customers, P&G is making the right move by exploring opportunities for mass customization with 3D printing. Due to strongly intensified competition, it makes sense to start in their grooming product line. I recommend P&G’s management to build on this momentum with two further actions. First, I recommend P&G to quickly evaluate Razor maker’s influence on brand loyalty and, if found positive, explore mass customization through 3D printing in other business lines as soon as possible. P&G’s grooming business has had a big decline. By moving to mass customization through 3D printing in other business lines now, before these are attacked by new market entrants, P&G might avoid similar sales declines in these segments. I believe management should deploy the technology both for mass customization of products of longer usage (e.g. toothbrush handles of Oral-B could be personalized just like razor handles) as well as mass segmentation [9] of packaging for mass-produced products (e.g. lids of shampoo bottles could be adapted to specific regions, events or groups of consumers). Second, I strongly recommend management to form a strong strategic partnership with a 3D manufacturer such as Formlabs. There is a huge benefit for the first mover in launching mass customization of certain product categories like razor handles. Only one company can be first. A strategic partnership with certain exclusive rights ensures P&G has access to faster and more precise 3D printers first and allows them to innovate with their brands.
With Razor maker, Gillette is one of the first brands of big FMCG companies that bets on mass customization through 3D printing. It’s a bold but much-needed move to revert the trend of losing market share and declining brand loyalty. Yet, will this be sufficient to win the hearts of millennial consumers? And if so, given 3D manufacturing costs are dropping quickly, why could this trend not turn against them and further empower small niche players?
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[1] Greg Kelly et al., “The new model for consumer goods”, McKinsey and company, April, 2018, https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/the-new-model-for-consumer-goods, accessed November 2018
[2] Lauren Hirsch, “P&G to restructure company as maker of Gillette razors simplifies business units”, CNBC, Nov 8, 2018, https://www.cnbc.com/2018/11/08/pg-to-restructure-company-as-maker-of-gillette-simplifies-units.html, accessed November 2018
[3] Scheherazade Daneshkhu, “Consumer goods: big brands battle with the ‘little guys’”, The Financial Times, February 27, 2018, https://www.ft.com/content/4aa58b22-1a81-11e8-aaca-4574d7dabfb6, accessed November 2018
[4] Steven Davidoff Solomon, “$1 Billion for Dollar Shave Club: Why Every Company Should Worry”, The New York Times, July 26, 2016, https://www.nytimes.com/2016/07/27/business/dealbook/1-billion-for-dollar-shave-club-why-every-company-should-worry.html, accessed November 2018
[5] Elizabeth Spaulding and Christopher Perry, “Making it personal: Rules for success in product customization”, Bain and company, September 16, 2013, https://www.bain.com/insights/making-it-personal-rules-for-success-in-product-customization/, accessed November 2018
[6] Jay Moye, “Share a Coke: How the Groundbreaking Campaign Got Its Start ‘Down Under’”, The Coca Cola Company, September 25, 2016, https://www.coca-colacompany.com/stories/share-a-coke-how-the-groundbreaking-campaign-got-its-start-down-under, accessed November 2018
[7] Formlabs, “Gillette Uses 3D Printing to Unlock Consumer Personalization”, October 17, 2018, https://formlabs.com/blog/gillette-uses-3d-printing-to-unlock-consumer-personalization/, accessed November 2018
[8] Tanya Powley, “Procter & Gamble puts skin in 3D bioprinting game”, The Financial Times, May 25, 2015, https://www.ft.com/content/02809474-ffe8-11e4-abd5-00144feabdc0, accessed November 2018
[9] Richard A. D’Aveni, “The 3-D Printing Playbook”, Harvard Business Review (July-August 2018), p106-113
Thanks for sharing. I found it interesting that orders would be processed within two to three weeks. [1] I appreciate that customization creates lead time; however, I worry the purchasing cycle for razors, especially amongst price sensitive millennial customers is shorter. For example, razors are frequently purchased after an existing razor is broken or dulled. Assuming the customer shaves a few times a week, this only leaves a few days before the next purchase, without increased customer planning. Additionally, the price concerns me, ranging from $19-45. [2] The market for cheap alternatives is saturated and margins in razors typically come from associated shaving products, i.e razor heads and shaving cream. Is this the appropriate focus for this market?
1) Saunders, Sarah. “Customers Customizing Their Own 3D Printed Razor Handles with Gillette’s New Razor Maker Platform,” October 18, 2018, [https://3dprint.com/227672/customers-customizing-their-own-3d-printed-razor-handles-with-gillettes-new-razor-maker-platform/], Accessed November 14, 2018.
2) Jackson, Beau. “Formlabs Trails Mass Customization in 3D Printed Razor Handles for Gillette,” [https://3dprintingindustry.com/news/formlabs-trials-mass-customization-in-3d-printed-razor-handles-for-gillette-141665/], Accessed November 14, 2018.
This is an excellent example of how additive manufacturing can reinvigorate even the most traditional of businesses (like P&G). It’s not just for the shiny new startups! Razors are a great product for 3D printing because they are one half permanent (the handle) and one half temporary (the blades). So P&G can enhance its consumer goods sales (the blades) if it provides innovation for the handles. However, this innovation may struggle to enhance other P&G products. I don’t think toilet paper will ever benefit from 3D printing, for example.
Contextually, you highlight P&G’s competition from up and coming companies like Dollar Shave Club. However, P&G has been squeezed from both sides, as extremely low cost private labels are also stealing share (https://money.cnn.com/2018/04/19/news/companies/procter-and-gamble/index.html). This could be the way that they maintain their brand image as a premium product.
What problem do you think customized handles are trying to solve? Is it functional — will the handle form to your hand/grip specifically? Or is it more stylistic or expressive (through the color and text)? If the latter, do people care about the identity communicated by their razor?
I’m a bit more skeptical than you about how relevant this use of 3D printing is to Gillette’s customers, and therefore to its bottom line. I respect that they are trying to differentiate from Dollar Shave’s value prop of convenience and price, but am not convinced that a customized, fashion-ized handle will translate to customer loyalty.
Really interesting evolution for Gilette – thanks for sharing! I echo Rose S’s comments above in that I’m not sure Gilette has hit the mark here on winning back the hearts of consumers and Millennials, specifically. I wonder if simply offering customization of colors and designs is really speaking to what consumers are looking for – I consider razors to be a basic, everyday product and thus worry consumers won’t have an appetite for a razor that costs more and takes longer to ship. I wonder if Gilette could increase the value-add of 3D printing customization by creating razors that are perfectly sized for a person’s hand?
Thank you for the article. It sounds like we are observing dawn of mass 3D printing applications to real life! That being said I think we cannot really *yet* determine whether 3D printing is just another marketing gimmick that serves to just stand out from the crowd, or is it really a new long-term approach towards manufacturing? More specifically, I would like to learn about the empirical user experience of how it actually feels to use a shaving handle that was designed by a user with presumably no prior experience. While I acknowledge it may sound quirky and fun, I would be sceptical of the practicality of such invention – e.g. maybe it turns out you need a specific curve and weight balance to be able to shave quickly and safely? Giving full decision power to an end-user sounds exciting when it comes to the looks of a product, but I would hypothesise a customer would benefit from human expert guidance? I think additive manufacturing is a low-hanging fruit for large companies to demonstrate innovation mindset, but it is a massive challenge to design an offering and experience that would truly augment usability for the end customer outside of the marketing sphere.
Interesting read, thanks for sharing! I agree with some of the comments above that express concerns over affordability of customized razors and whether it will be enough to win over millennials, even if prices remained the same as they were today. In the long term, an even more concerning issue regarding razors for me is that consumers may soon be able to afford their own 3D printers in the home. If consumers have their own 3D printers, plastic sheets are inexpensive, and template molds are available online, then consumers can easily print their own handles and buy blades at the store. We are far from this reality today, but I see the future as a tough market for all razor blade companies. Its not niche companies like Dollar Shave Club that might push Gillette razors out, but consumers themselves. In the short term though, I think 3D printing will definitely allow Gillette and other razor companies to bring down their COGS, increase margins, and experiment more freely with product development.
Thanks for sharing ldepoorter! I would actually disagree with some of the comments above about consumers producing these razor handles at home. I would say that niche subscription-based companies such as Dollar Shave Club (owned by P&G’s competitor Unilever) and Harry’s own the long-term competitive advantage. Since consumers are already on a subscription with these razor companies, it would be much easier for these companies to “add” these razor handles to the consumers next shipment. Consumers might be able to use their 3D printer at home but I would venture to say that there would additional steps in the process needed to print the razor handle at home, which the consumer may or may not want to take.
What concerns me at the moment, similar to Jaclyn, is the pricepoint. While I can see 3D printing producing these razor blade handles at scale, I wonder if the pricepoint will detract consumers from purchasing the product and not allow companies to reach economies of scale. In any event, this is a great article that showcases how we are seeing 3D printing in our day-to-day life.
Ldepoorter, very interesting read on how Gillette is using 3D printing to stay relevant. While I find this topic fascinating, I too am skeptical about the direction they are taking. My reasons why:
1) It does not meet the consumer need
Most consumers want a razor that is affordable and convenient. As you discussed, this is what made Dollar Shave club so successful in just a few years. They realized that men go through razors frequently and that it is very expensive to replace them. So what did they do: they created a $1 subscription and delivered it right to your door. Gillette has missed the ball on this value proposition. Instead, they are focusing on a niche group of men who are willing to spend $19-45 on a customizable handle that does not make their shave neither cheaper nor more convenient.
2) The money is in blades, not handles
What made Gillette and other razor-makers successful is that they created a product with a constant revenue stream. You buy a handle once and then you spend to replace the blades every 1-2 weeks. Gillette is using 3D printing as a way to salvage declining revenues, but it is difficult to do that when you offer one product with an extremely long inter-purchase cycle. Once a customer buys the handle, you have exhausted that customer’s revenue stream.
3) Customization is not scalable
As we learned in TOM, customization introduces longer lead times in operations. As such, it will be difficult to scale a product that is not reproduceable. I imagine this market will remain small and may introduce more variation in their already efficient operations of streamlined razors.
This is a really interesting idea, but I wonder how applicable it might be to other products. While someone’s razor handle is a durable item that sort of says something about who you are, I doubt many people feel that way about their toothbrushes that are supposed to be thrown away every three months. This is even more true when it comes to shampoo bottles and other products where the bottle is just a conveyance and gets tossed once the product inside is exhausted. I totally would buy a 3D printed razor blade handle though as long as the price wasn’t ridiculous, so maybe there is a market for “personalized toothbrushes”. I guess we’ll find out in the years to come.