D2C Strategies in the Personal Care Market, 2021

October 8, 2021  •  David Pring-Mill

The enormous D2C opportunity can’t be fully grasped or appreciated without looking at personal care categories.

These products are natural contenders for this digital strategy because they are fast-moving goods that can often be shipped without complication. Executives and marketers are working to identify the ideal intervals, contents, bundles, etc. that will satisfy this recurring need as well as the personal preferences that define personal care.

Articles about the broader trend of D2C often end up listing off brands in personal care, without necessarily intending to focus on that market — brands like Dollar Shave Club and Harry’s tend to come up. There are also high-growth, female-oriented brands, such as The Honest Company, which plays into ethical consumerism as well as celebrity influence (Jessica Alba is the co-founder). One product bundle, consisting of a mask, cream, serum, balms, and mist, is positioned as “Jessica’s daily skincare routine.”

Personal care startup valuations and M&A activities also readily command attention.

Dollar Shave Club received backing from prominent venture capitalists and was acquired by Unilever, reportedly for $1 billion.

In 2019, Edgewell Personal Care Co. announced that it would acquire Harry’s, a somewhat similar disruptor, in a $1.37 billion cash-and-stock deal. According to financial analysis, Unilever paid five times annual sales for Dollar Shave Club, whereas Edgewell paid four times the revenue of Harry’s, which was expected to result in a combined company with gross debt of 5.2x EBITDA.

However, the FTC filed suit to block the merger on the grounds that “the loss of Harry’s as an independent competitor would remove a critical disruptive rival that has driven down prices and spurred innovation in an industry that was previously dominated by two main suppliers, one of whom is the acquirer.”

The companies had anticipated this possibility, based on signals. Harry’s subsequently reverted to its standalone, pre-Edgewell vision, newly informed by their “look inside the belly of the beast, so to speak” and understanding of “what really went on in big CPG,” according to Harry’s co-CEO Andy Katz-Mayfield. They then raised $155 million in new funding to expand in CPG categories, and it’s been suggested that their organizational culture will lend itself to incubating new ideas.

Toilet paper hoarding and other forms of panic buying, at various points in 2020 especially, again thrust personal care categories into mainstream attention and drove searches on digital channels.

These pandemic-driven developments led to product scarcity and empty shelves, declarations of legal repercussions that sometimes lacked follow-through, debates over price gouging laws, and modified digital advertising policies. In some areas, this process has already repeated, as spikes in case numbers cause governments to reinstitute restrictions and inflation becomes manifested in consumer goods price tags. Supply chain issues have also resulted in patchy availability of some products, which may lead to bulk buying.

As the world continues to reel from COVID-19 and looks hopefully towards vaccinations as a method of restoration, commerce has been profoundly changed, and some of those changes will likely be permanent. 2020 brought about a 32.4% increase in U.S. ecommerce sales, according to the U.S. Department of Commerce.

During this time of crisis and change, the personal care category, along with other consumer categories, can and must rethink its key business strategies. Some leading brands are also fundamentally rethinking the products in their portfolios. In some instances, their hope is that product re-engineering can potentially lead to a consumer behavioral re-engineering of sorts, enabling the re-engineering of business models, away from disrupted retail environments and towards data-generating ecommerce relationships.

However, expectations regarding customer lifetime value may not be borne out, and the intended differentiation may not be recognized by consumers. There are many risks alongside the ecommerce growth opportunities.

Key Benefits of this Report

This is a thoroughly-researched, carefully-organized report about the direct-to-consumer strategies being used by emerging personal care brands. It is about 30,000 words, structured around areas of strategic and operational relevance.

For the time-constrained executive, founder, or businessperson, the most salient and actionable points are highlighted in an executive summary.

This report will provide comprehensive answers to the following key questions:

  • How are D2C personal care brands communicating their value digitally?
  • What is the viability of subscriptions in D2C personal care?
  • What are the key levers for digital growth?
  • How are D2C personal care brands targeting potential consumer segments?
  • What are specific, high-ROI digital marketing strategies for D2C personal care brands?
  • What are the emerging trends in D2C personal care?
  • What are other challenges in D2C personal care and the most effective strategies for overcoming them?
  • How do D2C personal care brands view brick-and-mortar?
  • What are some of the sustainability and social issues that D2C personal care brands could investigate and remedy?

Target Audience

  • D2C personal care brands
  • CPG brands evaluating their ecommerce/D2C options
  • pharmacy retailers seeking insights on category transformations
  • investors and investment banks

Companies Mentioned in this Report

This report aggregates strategic insights from established and disruptive personal care brands with D2C channels. Companies mentioned in this report include:

  • Dollar Shave Club (Unilever)
  • Harry’s
  • Hims & Hers Health
  • Public Goods
  • Hero Cosmetics
  • Snow Teeth Whitening/Snow Cosmetics
  • Hydroxatone
  • Keranique
  • Schmidt’s Naturals (Unilever)
  • Gillette (Procter & Gamble)
  • Colgate-Palmolive
  • Tiege Hanley
  • Hawthorne
  • Manscaped
  • Prose
  • Edgewell Personal Care Co.
  • Invincible Brands Holding (Henkel)
  • Bragg Live Food Products
  • Amazon
  • Walmart
  • Target
  • Anthropologie
  • Sephora
  • Kickstarter
  • Facebook

Methodology

Policy2050 excels at identifying the strategies and patterns within complex data that is gathered through exhaustive secondary and primary research. This process includes publicly available sources, such as annual reports, academic journals, consumer surveys, trade publications, industry symposia, and podcasts, along with interviews and inputs from a wide network of market experts and internal knowledge. Strategic perspectives are leveraged from across the value chain and from relevant tech vendors causing disruptions or reconfigurations in markets.

Information is filtered and validated through this lens of expertise and scrutiny, or contextualized to expose differences in results and industry disagreements. Perceptions of current trends, as reflected in reporting, often translate into actions and investments with consequences. The many hyperlinks included throughout this report help to ensure that important figures, strategic statements, and other market characterizations are easily and fully traceable.

All of this analysis is delivered within an actionable framework that outlines best practices, proposes innovations or adaptations, and extracts insights from case studies. Infographics and imagery are used to express key concepts and enliven this comprehensive overview where appropriate.

Media Kit

The compressed file above contains a copy of the press release alongside infographics, which can be freely used by the news media with attribution. The online press release is visible here.

Inquiries can be directed to david.pringmill@policy2050.com.

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