business news in context, analysis with attitude

by Kevin Coupe

I’ve been in Los Angeles the past few days, attending and presenting at the Retail Tomorrow Immersion conference put on by the Global Market Development Center (GMDC).

It has been a fascinating couple of days, with participation from some terrific retailers and suppliers that all recognize that there some fundamental shifts taking place at retail and that denial isn’t an option. My participation was in the form of hosting two sessions that we recorded for our Retail Tomorrow Podcast series; one focused on the unique alliance created by Kroger and Microsoft, and the other on the subject of retail storytelling. We’ll be posting these podcasts in coming weeks both here on MNB and on the Retail Tomorrow website, and I hope you’ll enjoy them.

One of the highlights of the event was the appearance of Michael Dubin, the co-founder and CEO of Dollar Shave Club. Dubin got a lot of attention with a video introducing his company that went viral and virtually created his category - a subscription service for razors that disrupted legacy brands like Gillette by challenging and undercutting their value proposition.

Dubin and Dollar Shave Club strike me in many ways as the very definition of retail tomorrow … not necessarily store-based, not necessarily traditional, but keyed to specific consumer needs and desires. These shifts have been recognized by larger entities - Unilever acquired the company about three years ago for $1 billion.

Dubin told the Retail Tomorrow attendees that Unilever has been largely hands-off since the acquisition, allowing Dollar Shave Club to forge its own path and even have its own board. But even more important, it seems to me, Dubin stressed the fact that while his goal is to sell more products to more people, the company’s approach is rooted in “driving engagement” with people who subscribe to its services, through expanded product lines and a robust content pipeline that is both digital and physical.

While Dollar Shave Club started with razors and razor blades, it now has some three dozen items, and in addition to selling online, it also has a presence in dedicated vending machines that are in malls and airports. In addition, Dubin said, he knows that there are some customers who will define convenience as being able to go to the store and pick up what they want, and want to be able to feel and smell products. Which means that he is developing relationships with supermarkets and drug stores that will give Dollar Shave Club a presence in such venues, though he’d like it to be differentiated instead of just being me-too items on shelves. One example he cited - a relationship with Neighborhood Goods, a new-style, brand-driven department store concept opened in Texas that offers a regular series of events that attract shoppers and create a larger framework in which brands can thrive.

(What Dubin described actually sounds similar to the relationship forged by Target with Harry’s, which has taken a similarly disruptive approach to the category.)

Dubin also said he could conceive of a Dollar Shave Club store in which, in addition to buying its products, one also could get a foot massage or a haircut.

What was most interesting to me about Dubin’s comments was that they revolved around the central theme of consumer engagement - it matters less to him how and where people acquire his products than that they have a persistent, consistent and evolving relationship with his brand.

I think that is an important lesson for retailers and suppliers - one can be venue agnostic, one can be format agnostic, but one cannot afford to be consumer agnostic.

We’ll have more from Retail Tomorrow in coming days…
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