‘Companies get addicted to the notion of subscriptions’: Dollar Shave Club CEO Michael Dubin
Dollar Shave Club CEO Michael Dubin has come a long way since he posted a quirky video that poked fun at the razor-buying experience eight years ago.
By offering cheaper razors to customers who agreed to sign up for regular replenishments, the Dollar Shave Club was one of the first direct-to-consumer startups that successfully scaled through a subscription model, hitting three million customers in 2016. It was also one of the first DTC brands to catch the attention of a corporation: That year, Dollar Shave Club sold to Unilever for $1 billion, marking one of the most successful exits for a VC-backed digital brand that had raised $163 million in funding.
Dubin and his company are now part of Unilever’s CPG machine, but Dubin makes the point that it retains its original quirk and separateness from the parent company. Such autonomy was “the design” of the relationship with Unilever when the deal was finalized and includes a Dollar Shave Club board, which brings a sense of independence Dubin says is critical to its evolution. That evolution is still being worked out between the two companies: While Dollar Shave Club posted double-digit growth last year, according to Unilever, year-over-year subscriber growth has slowed since the acquisition, with Dollar Shave Club currently counting four million subscribers.
Dollar Shave Club’s success is emblematic of the subscription category, which has grown in popularity since its launch in 2011. To grow, Dubin is bullish on its prospects to move beyond razors to a fully fledged men’s lifestyle brand.
Digiday spoke to Dubin about how he plans to keep the brand’s momentum.
The Dollar Shave Club was an early example of an online-first brand built on the subscription model. How does customer data influence the business?
We want to learn as much as we can about the customers so that we can provide customized products and great product recommendations. We’re building a member profile for each of our members. It involves asking questions about their age, grooming and personal care concerns. Do they have concerns about hair loss, aging – all things that help us serve up the right product recommendations for you and infuse our product development processes as well. The member profile is, over the next 12 months, going to become a huge part of our consumer-facing proposition.
Customers can also buy products on a one-off basis, too. What does that mean for companies like the Dollar Shave Club that want as many subscribers as possible?
I would not phrase the goal of maximizing subscriptions as the North Star — our mission is to help guys take care of their minds and bodies so they can be their best selves. A lot of companies get addicted to the notion of subscriptions because they love the notion of recurring revenue, but ultimately — and it sounds trite — you have to think, “Does the presence of a subscription enhance the consumer’s experience?” The obvious examples are streaming video: You don’t want to go online every month and sign up and buy a month’s Netflix subscription. You want it to be automatic. The same thing we believe is true for the products in the bathroom to help you look, smell and feel your best. There’s no reason, once you know what you like – and guys are very loyal – you should have to go back to the store and re-order those things. There are a lot of barriers that exist [to acquiring customers] – store shelves are extremely crowded, people in the stores don’t know who you are. [Products] should come automatically, so you’ll never run out.
Is the goal then to get a deeper relationship with your existing customers?
Bringing the product into the real world is a big part of our strategy moving forward. We want to deepen our relationships with existing members by giving them a place where they can discover new products. Retail [vending machines] is the first instance of those executions. We have three locations right now. We hope to expand to a national footprint over the next year or so.
How has Dollar Shave Club’s in-house content evolved with the brand?
We have original content on our website to drive engagement and help educate our guys on a variety of topics: social issues, grooming issues, personal care issues. We have Mel Magazine, our men’s lifestyle publication; it lives independently, it’s doing 2.5 million uniques a month, and we just launched our first print issue. That’s a men’s lifestyle platform that’s filling a void. The Dollar Shave Club is a product and content company.
How does the magazine differentiate from the website content?
We have Dollar Shave Club original content and then we have Mel, which [has] no Dollar Shave Club advertising – it has editorial independence. We’re playing the long game. We create great content day in, day out, and we’re starting to see incumbent content producers copying our content. Producing great content over time will yield us a loyal fan base and following.
Your magazine delves into social issues that apply to men – one headline, for example, tackles what to expect when seeing a therapist for the first time. Brands are increasingly wading into social issues. What’s your view on that?
I don’t have a problem with brands taking a stance on social issues. It’s a choice that brands make. Once you wade into that terrain, you can’t pull that back. Whether the brand likes it or not, the brand will be pulled into conversations on different topics and be asked where they stand. I think that could be a good thing.
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