MINNEAPOLIS -- When Target's sales of men's razors started to slip the Minneapolis-based retailer decided to join forces with the upstart online brands disrupting the industry.
Disposable razors, one of the biggest categories in Target's beauty and personal care aisles, led the retailer to work with two subscription-based online brands -- Harry's and Bevel -- brokering exclusive deals to be the only mass retailer to carry their products.
"It's been really working so far -- knock on wood," said John Butcher, Target's senior vice president of beauty merchandising.
Target's market share in men's shaving has jumped by double digits, as has its overall sales of men's razors, he said. About 50 percent of Target's razor handle sales and about 15 percent of its cartridges now come from Harry's.
And unlike what some expected, it hasn't necessarily come at the expense of the longtime king of the razor aisle -- Procter & Gamble's Gillette. Gillette's sales at Target have also been up, despite losing a bit of shelf space as Target cleaned up the product presentation, Butcher said.
"There were some skeptics out there," he said. "But the hypothesis was if we become a more meaningful destination for men's shave, then we get more people in the aisle. And that affords everybody in the aisle the opportunity to win more business at Target. That's exactly what's happening."
Butcher said the alliance with Harry's and Bevel is one of many ways Target is looking to beef up its offerings for men, who are increasingly shopping for themselves.
"Guys have been underserved," he said. "We feel like he's looking for newness and he's looking for solutions to his modern-day problems."
While it already sells a ton of men's underwear, Target also sees opportunity when it comes to clothing. So later this year, Target will begin selling a new in-house men's apparel brand.
A key ingredient to the partnership with Harry's has been the eye-catching endcap displays.
"The test at Target was 'can we fundamentally alter the retail experience for buying shaving and grooming products and stop people in their tracks for the first time in a long time,'" said Jeff Raider, co-chief executive officer of Harry's. "It's hard to do that in a small way. You've got to go big."
When it debuted in Target's 1,800 stores last August, Harry's displays included larger-than-life 4-foot-tall razors. Earlier this year, those were swapped out for a cutout of a guy in boxer shorts and tube socks standing in front of a mirror with a dog at his feet. It's been so popular that some customers have tried walking out of the store with it.
Amid the rapid innovation happening in the category, the $2.6 billion men's shaving industry has been picking up steam over the past several years and grew about 4.4 percent last year, according to Euromonitor.
While the pie has gotten bigger, Gillette has been losing ground. Its marketshare has dropped from 64 percent in 2013 to 54 percent in 2016. Dollar Shave Club, another direct-to-consumer company that sells online subscriptions and was sold to Unilever for $1 billion last year, now has about 8 percent of the market and has surpassed Bic, according to Euromonitor.
Meanwhile, Harry's, the No. 5 brand, more than doubled its share last year to 4 percent.
The disruption in Target's shaving aisle highlights the retailer's increased willingness to make room on its shelves for up-and-coming specialty brands in order to stay relevant, putting the big national brands on notice that they might lose some shelf space, said Carol Spieckerman, a retail consultant.
"Up to this point, there were certain categories that have been sacred spaces for national brands," said Spieckerman. "You could see this [in men's shaving] as the first of many more encroachments."
There's not much the big brands can do about it.
"A national brand can't afford to turn down Target's business," Spieckerman said. "They just have to get over it."
It's also pushed some companies to accelerate their innovation efforts. Gillette introduced its own direct-to-consumer subscription service a couple of years ago and has recently cut prices.
"There has always been competition in this category, and we are taking that seriously -- in store or with new competitors online," Gillette spokesman Barbara Diecker said in an email. "We continue to focus our efforts on growing in both the traditional and e-commerce spaces."
Business on 04/25/2017