Unilever has agreed to buy Dollar Shave Club for $1 billion, giving the CPG giant a major edge over competitor Procter & Gamble.
In recent months, P&G-owned Gillette has faced an uphill battle to compete with the subscription shaving retailer. Dollar Shave Club generated three times more monthly searches than Gillette in the second half of 2014, according to L2’s Digital IQ Index: Personal Care. And as Gillette’s site traffic declined by 65%, that of Dollar Shave Club rose by nearly as much.
While the company has not yet been profitable, CEO Michael Dubin said that could be changing this year. He estimated $240 million in revenue, due to other bathroom products as well as its namesake razors.
By upending the traditional CPG retail process and pursuing strategic investments in digital, Dollar Shave Club was able to edge ahead of its competitors. However, the brand’s aggressive tactics might not work for all subscription startups.
“I don’t think this is a testament on ‘e-commerce is back,'” Forrester Research analyst Sucharita Mulpuru told Bloomberg. “What Dollar Shave built is really unique.”