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Gillette Seeks to Grow Online Market Share with Sales Initiatives

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Procter & Gamble’s fiscal 1Q16 grooming segment results

Procter & Gamble’s, or P&G’s (PG), grooming segment covers shaving products such as electronic hair removal products, female and male blades and razors, and pre- and post-shave care products. The grooming segment’s net revenue for fiscal 1Q16, which ended September 30, 2015, came in at $1.7 billion. The segment’s net sales were 14% lower than in fiscal 1Q15. The change in sales was primarily due to unprecedented foreign exchange impacts, which reduced the top line by 13%.

However, organic sales for the grooming segment were unchanged, as a result of higher pricing on blades and razors and the growth of Braun from innovation and increased trade support. To learn more about P&G’s 1Q16 results, please read Procter & Gamble: Grooming Sales Remain Unchanged for 1Q16.

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Gillette Shave Club

With the continued growth of competitors like Unilever (UL), Estée Lauder (EL), and Dollar Shave Club in men’s grooming products, P&G initiated the online Gillette Shave Club in order to increase its customer base and sales. P&G aims to build partnerships with both online and brick-and-mortar retailers, who will offer shoppers subscription tie-ins to the Gillette Shave Club.

Lawsuit seeks damages

Dollar Shave Club, which launched its subscription service in 2012, now controls 10% of the US market for men’s razor cartridges, according to the lawsuit. The lawsuit comes after 120-year-old Gillette was slow to respond to the rise of online rivals. Gillette, which controls more than 60% of the US retail (XRT) market, has 20% of the online shaving market.

Like its peers Kimberly-Clark Corporation (KMB) and Colgate-Palmolive (CL), P&G focuses on in-store innovation to attract consumers and meet retailers’ expectations. Gillette offers consumers advanced razors like Fusion ProGlide. The lawsuit seeks damages and an injunction to prevent Dollar Shave Club from selling any products infringing on Gillette’s patented technology.

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