Be­hind the Brand


Fast Company - - Contents - BY BURT HELM

Harry’s women-fo­cused shav­ing line is kick­ing off its ef­forts to be­come the new Proc­ter & Gam­ble.

As a co­founder of Warby Parker and, more re­cently, co­founder and CO-CEO of Harry’s, Jeff Raider has starred in his own TV com­mer­cials, de­liv­ered key­note speeches at tech con­fer­ences, and per­suaded in­vestors to hand his com­pa­nies hun­dreds of mil­lions of dol­lars. De­pend­ing on the au­di­ence, he can wax lyri­cal, in­spi­ra­tional, hy­po­thet­i­cal. But only re­cently did the

38-year-old face his R&D team, press a sticky strip of pa­per to his arm, and wax lit­eral. “Harry’s prod­ucts aren’t tested on an­i­mals,” he says, “only founders.”

This month, Harry’s is in­tro­duc­ing a line of hair­re­mov­ing wax strips, along with ra­zors, gels, and lo­tions— all for women. Sold un­der the new Flamingo brand, the line fea­tures min­i­mal­ist, so­phis­ti­cated de­sign and

Harry’s vet­er­ans Al­lie Mel­nick, left, and Brit­ta­nia Boey over­saw the launch of the com­pany’s new Flamingo women’s brand.

pack­ag­ing (first rule: no pink) and talks in a cheer­ful, no-non­sense way. “[We want to] be hon­est about hair re­moval,” says Al­lie Mel­nick, Harry’s long­time head of brand strat­egy and now gen­eral man­ager of Flamingo, who over­saw its cre­ation with re­search and de­vel­op­ment and de­sign head Brit­ta­nia Boey.

Flamingo is the first bet to come out of Harry’s Labs, an au­da­cious ini­tia­tive that the com­pany an­nounced in Fe­bru­ary with the news of its lat­est, $112 mil­lion in­vest­ment round. The plan is to cul­ti­vate a port­fo­lio of brands, both in­ter­nally and in part­ner­ship with out­side en­trepreneurs, us­ing the di­rect-to-con­sumer play­book that Harry’s helped pi­o­neer: sell prod­ucts ex­clu­sively on branded web­sites; drive de­mand through clever PR and di­rect ad­ver­tis­ing; and then ex­pand to third-party web­sites and re­tail­ers such as Tar­get and Wal­mart, where Harry’s ra­zors are cur­rently sold. “If we can build a bunch of new brands, then we can cre­ate a next-gen­er­a­tion CPG com­pany,” says Raider. “That com­pany can touch mil­lions more house­holds.”

Harry’s needs this strat­egy to work. In the five years since launch­ing their ra­zor com­pany, Raider and his co­founder and CO-CEO,

Andy Katz-may­field, have taken on $375 mil­lion in ven­ture cap­i­tal and con­vinced in­vestors to value Harry’s at more than $1 bil­lion.

But the com­pany to­day doesn’t quite re­sem­ble a uni­corn. Harry’s ranks a dis­tant third in on­line “man­ual shave” sales, with 13% of the mar­ket (Dol­lar Shave Club and Gil­lette own 50% and 21% of on­line sales, re­spec­tively, ac­cord­ing to mar­ket-re­search provider Rakuten In­tel­li­gence). In tra­di­tional re­tail sales, Harry’s ra­zors and shav­ing ac­ces­sories rank fourth, with just a 5% mar­ket share, ac­cord­ing to IRI. Wal­mart’s em­brace of the brand—harry’s landed on shelves in 2,200 stores in May—should move that nee­dle. Al­ready Harry’s is see­ing re­sults from its tighter re­la­tion­ships with re­tail­ers: The com­pany’s share of the of­fline re­tail mar­ket for ra­zor han­dles (ex­clud­ing re­place­ment car­tridges) surged to 16% over this past sum­mer, ac­cord­ing to Nielsen.

Raider says that Harry’s U.S. busi­ness, which in­cludes the brand’s bar soap and body wash, is ex­pected to grow more than 50% this year and next, and reach more than $250 mil­lion this year. He ex­pects the en­tire com­pany, in­clud­ing Flamingo, to be prof­itable by the end of the year. Even so, if the founders plan to con­vince pub­lic mar­kets (or a po­ten­tial ac­quirer) that the com­pany is worth more than $1 bil­lion—the sum Unilever paid for Dol­lar Shave Club in 2016—they’ll have to show that Harry’s is des­tined for more than a life as a run­ner-up. Flamingo is a nat­u­ral first step for the com­pany’s ex­pan­sion into new ter­ri­tory. Harry’s al­ready owns a Ger­man ra­zor fac­tory: Why not of­fer its blades to the other half of the pop­u­la­tion? While the women’s hair-re­moval mar­ket is only about two-thirds the size of men’s, Harry’s has been field­ing in­quiries about branch­ing into women’s prod­ucts for years. “We’ve never spo­ken at a con­fer­ence and not had some­one raise their hand and say, ‘When is Harry’s for women com­ing? What about us?’ ” says Raider. More than a mil­lion women have al­ready pur­chased Harry’s blades, ac­cord­ing to the com­pany.

Mel­nick and Boey as­sem­bled a small team and be­gan ac­tively work­ing on a spin-off late last year. Af­ter re­view­ing ex­ist­ing prod­ucts and in­ter­view­ing women, Boey says they con­cluded that “hair re­moval [is] a trau­matic event for your skin”—a re­al­ity that most brands ig­nore. In par­tic­u­lar, they felt that Venus, the lead­ing women’s blade of­fered by Gil­lette, ap­proached women all wrong: “[To tell the con­sumer] that you’re a god­dess with silky, flow­ing hair, and you’re

com­ing out of a flower, it felt ar­ti­fi­cial.” The team also found that al­though 78% of women use mul­ti­ple hair-re­moval prod­ucts, in­clud­ing ra­zors, wax­ing kits, and epi­la­tors, no ra­zor brand of­fered more than one type of prod­uct.

To make Flamingo some­thing women would ac­tu­ally crave, the team took in­spi­ra­tion from in­te­rior de­sign. “Our start­ing brief was: Can we make some­thing top-shelf wor­thy, some­thing you want to [proudly] put in your bath­room?” says Mel­nick. Boey’s team gave the ra­zor han­dles heft, chose colors that com­ple­ment the fix­tures in high-end bath­rooms, and added me­tal ac­cents. Mel­nick says Flamingo also dif­fer­en­ti­ates it­self from com­peti­tors in how it talks to women. The wax­ing kits, which in­clude a 24-pack of body-size strips and a smaller box with strips for faces, come with in­struc­tions that are light­hearted and frank as they help users vi­o­lently rip hair from their skin. (“Bask in your brav­ery!” they cheer.)

Harry’s Labs is al­ready ex­plor­ing other cat­e­gories. Raider won’t go into specifics, but he has his eye on ev­ery­thing from cos­met­ics to clean­ing sup­plies to pet care—any­where, he says, there is an un­met con­sumer need. An early test case: Harry’s re­cent in­vest­ment in Hims, which sells hair loss and erec­tile dys­func­tion treat­ments to men. “There are a bunch of [con­sumer prod­uct] cat­e­gories that feel a lot like shav­ing did be­fore we launched Harry’s,” he says, “that are highly con­sol­i­dated, where one or two brands dom­i­nate. They’re not bad brands—they’re just not modern ones.”

Raider ar­gues that now is a per­fect time for a com­pany like Harry’s to in­vig­o­rate th­ese cat­e­gories. Pur­chas­ing habits are chang­ing. Young buy­ers want to look be­yond their par­ents’ brands. His com­pet­i­tive edge over stal­warts like Proc­ter & Gam­ble is a di­rect-to-con­sumer model that em­ploys highly tar­geted ad­ver­tis­ing—a rel­a­tively ef­fi­cient way to in­tro­duce con­sumers to new brands—and a sleek on­line shop­ping process. Harry’s also over­sees its own cus­tomer ser­vice oper­a­tion, which keeps it closely at­tuned to its cus­tomers.

There’s a clear op­por­tu­nity for a Harry’s-like in­sur­gent, says Don Stu­art, man­ag­ing part­ner of Cadent Con­sult­ing Group. Larger CPG com­pa­nies, he says, tend to pro­tect their ex­ist­ing busi­nesses at the ex­pense of agility and “are still very vul­ner­a­ble to a flank­ing ma­neu­ver.”

At the same time, the chal­lenges to di­rect-to-con­sumer brands are mul­ti­ply­ing. Th­ese glossy-look­ing star­tups don’t al­ways suc­ceed in the mar­kets they prom­ise to dis­rupt. Mar­ket­ing costs turn out to be much higher than ex­pected. Prof­its are elu­sive. Cus­tomers get bored and move on. “Con­sumers are uniquely will­ing to try new things to a de­gree that they never have be­fore,” says Ken Cas­sar, vice pres­i­dent of strat­egy and in­sights at Rakuten In­tel­li­gence. “But they are also quick to quit things they tried that didn’t work out for them.”

Af­ter spend­ing bil­lions in ven­ture cap­i­tal, many in­vestors and en­trepreneurs no longer crow that their di­rect-to-con­sumer busi­ness will ren­der tra­di­tional re­tail­ers ob­so­lete. In­stead, they call the model a handy, if not al­ways prof­itable, way to in­tro­duce new brands to con­sumers be­fore bring­ing prod­ucts to big-box store shelves—or sell­ing to a larger com­pany.

Raider claims his own goal is not to sell out—just to sell new things. “My am­bi­tion is to build busi­nesses as big or big­ger than Harry’s [is to­day],” he says. If Flamingo takes off, it will lift Harry’s prospects of be­com­ing the con­sumer prod­ucts com­pany of the fu­ture. If it doesn’t, it may end up a pretty or­na­ment on Harry’s bil­lion-dol­lar lawn.

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