Industry Insights

(1 Billion) Dollar Shave Club

disruption

For the past couple of years, Uber has been the “poster child” for digital disruption. In fact, the term “Uber” is now effectively a verb, and companies seem to live in constant fear of “Uberization.” Needless to say, the taxi company which owns zero taxis has changed the game on industry convergence and has raised the blood pressure of many executives in enterprises across all industries.

Razor sharp disruption

For the Consumer Products Industry, there has been one company that “threw a wrench” into the age-old razor business — a company that has once again returned to the forefront of enterprise and consumer hearts and minds as it dominated headlines this past week.

Somewhere in the midst of headlines dominated by Pokemon Go, you probably noticed some news surrounding the Dollar Shave Club — a company that was started by two men with an idea and, since 2012, has grown into a whopping $1 billion company, which Unilever was willing to pay this past week as it acquired the digital disruptor.

The company started to grow in 2012, when it posted a free ad on YouTube that went viral. Within 24 hours of posting the video, the new business had an excess of 12,000 orders, and the video went on to eclipsing more than 20 million views.  At this point, Dollar Shave Club received an influx of investment and began to offer products that complimented its razor offerings.

CPG heartburn

The rapid growth of the disruptor no doubt had a negative impact on traditional razor manufacturers, and the story of this company is what could potentially keep CPG executives up at night. As stated before, the company was started by two men who saw a need in the market, started a small business and created a video. Then, overnight, their company exploded.

In today’s age of rapid innovation and cloud technology, seemingly anyone with a dream and a computer can start a business like this.  With ever-dwindling barriers to entry, what are CPG brands to do to prepare themselves for a day when their companies may be directly affected by disruption?

If you haven’t heard it yet, Anthony Bigornia, Director of IBM Consumer Products Industry Solutions, shed some light on what CPG companies can do to better prepare themselves for unforeseen disruption.

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