Shave money: Unilever doesn't buy a market, it buys skills

[jrineakter]

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Column – “With the acquisition of Dollar Shave Club, Unilever is taking on razor giants Gillette and Wilkinson” (NRC, Thursday 21 July). “Unilever is plunging into the American men’s razor market… the company is taking on shaving giants such as Gillette of Procter & Gamble and Schick of Edgewell” (Volkskrant).


It is an obvious conclusion. On the easy side. A giant like Unilever buys a startup like Dollar Shave Club (customer takes a subscription to razor blades, a dollar every month). Unilever is prepared to pay an estimated five times the turnover of 200 million for this, a little under 1 billion dollars. Unilever buys a bite out of the razor blade market, we say.

Another approach, entirely on my own account. Saying the following long sentence in one breath. Unilever is not buying a market, but buying something they should have done algeria telegram number list themselves and now that they find out that something is changing in this world it is too late to make it themselves and so they pay a lot of money for an idea, a concept, a way of working, a market approach (and no, not a market), a group of people who together can do something that Unilever will desperately need in the coming decades to be able to continue successfully.

A purchase of skills
This is not a purchase of a market, this is a purchase of skills.

Every man buys a razor with some regularity. So it makes sense to take out a razor subscription. Replace razor with hand cream, wax, gel, toothpaste, perfume, and it works too.

One step further.

A family of any size buys a jar of peanut butter on a regular basis. So it makes sense to take out a subscription for jars of peanut butter.

A family of any size buys a pack of washing powder with some regularity. So it makes sense to take out a subscription for packs of washing powder.

Unilever is buying the ability to approach consumers directly with a subscription model. Watch the 23 million+ YouTube video of Mike, founder of the Dollar Shave Club. In it, he explains in a minute and a half why you pay way too much for branded razors. Because of the twenty dollars you pay, nineteen go to Roger Federer. That's why.

Unilever is buying the ability to speak the consumer's language. Shave time, shave money .

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Drawing: Sterre Steins Bisschop

Life in the brewery
Unilever is buying the ability to reach consumers directly in the online game. “No, we are not going to compete with supermarkets and drugstores,” a Unilever spokesperson mutters. Of course that is nonsense. And it also starts from the wrong premise that this should not be allowed. Everyone is going to compete with everyone else and no one needs to be ashamed of it. Channel conflicts are hopelessly old-fashioned conflicts. The singular of distribution chain is distribution shed. Sheet stands for 'noise'. And that is exactly what is going on. Young people make noise more easily than older people, but no one denies older people the right to make noise too. And noise does not always have to have a negative connotation. Noise also means: life in the brewery.

Now suppose that someone at Unilever had decided ten years ago to take twenty very smart freelancers out of the market and ask them to develop and market a direct-to-consumer subscription model for them. A team of twenty freelancers costs – let’s say – almost four million euros per year. Ten years of this team would have cost about forty million. And then Unilever would have had something to show for it.