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Shaving Price Points

Product cycles and the economy are having an impact on the razor category, putting pressure on prices that enjoyed greater elasticity earlier in the decade. These circumstances are prompting consumers to give lower-price alternatives a closer look. Retailers agree that the big product introductions, including Mach 3 and Fusion from Procter & Gamble's Gillette division and Quattro from Schick, were

Product cycles and the economy are having an impact on the razor category, putting pressure on prices that enjoyed greater elasticity earlier in the decade.

These circumstances are prompting consumers to give lower-price alternatives a closer look.

Retailers agree that the big product introductions, including Mach 3 and Fusion from Procter & Gamble's Gillette division and Quattro from Schick, were instrumental in driving the men's grooming business by creating excitement and awareness through major marketing campaigns. Now, said Al Jones, senior vice president of procurement and marketing for Imperial Distributors, Auburn, Mass., Fusion advertising seems to be focused on Mach 3 and rationalizing new blade prices to consumers, an approach that he questions.

“The growth with razors was Gillette coming up with new technology every few years and getting the advertising out there, but now we see campaigns where one P&G brand is advertising against another P&G brand trying to get [consumers] to trade up. It's a pretty strange situation. Then, recently, we had the campaign out there trying to downplay the cost of new systems.”

In mid-November, Gillette announced an advertising campaign designed to convince consumers that Fusion blades are affordable at a price of about $1 per week.

However, no matter how it is spun, razor sales have flattened.

According to market research firm Euromonitor International, shaving products sales gained 18.3% in the United States from 2002 to 2007, to reach sales of about $2.38 billion. Now Euromonitor is projecting gains of just 0.6% from 2007 to 2012.

A category manager with a Southeastern food retailer said that at least some of the markets the company serves have recently experienced a shift to value-priced products in the disposable market, “as well as smaller counts of blades. I believe that the majority of our shoppers are looking to save where they can.”

Kimberly Fultz, category manager, health, beauty and wellness, K-VA-T Food Stores, Abingdon, Va., said the company's shrink-oriented decision to move shaving systems and their replacement blades behind the counter had caused consumers to reevaluate disposables and private label. “The higher-priced three- and four-blade disposables are the fastest-growing, and more so on the men's items vs. the women's. In our case, the customers seem willing to trade down to the lower-priced disposables. Customers have also readily accepted our private label, and it continues to grow in share.”

TAGS: Marketing