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Gillette is the core brand within Procter & Gamble's grooming business unit. It has long reigned as the world's biggest shaving and razor business, with an estimated 65% share of the global market, and a dominant position in both the men's and women's segments. Yet the brand has been under intense pressure since the end of the 1990s, first from difficult economic conditions, later as a result of increased competition from arch-rival Schick Wilkinson Sword (now owned by Edgewell Personal Care). The Gillette Company was acquired by P&G in 2005, along with subsidiary brands such as Braun shavers, and performance has stabilised, with sub-brands such as Gillette Fusion and Venus for women established as billion-dollar brands in their own right. However, the company continues to feel pressure from lower-priced rivals, especially Dollar Shave Club and Harry's, and from a changing market where daily facial shaving is considered less important than it once was. At the same time there is a growing demand among men for body shaving products, an area where Gillette remains comparatively weak.
Click here for a listing of Gillette Agency Account Assignments from Adbrands.net.
Interbrand's Best Global Brands survey ranked Gillette as the world's #24 brand in 2016, with an estimated brand value of $19.95bn. Millward Brown's Brandz survey ranked Gillette as the world's #67 brand overall (but #3 in personal care behind L'Oreal and Colgate), with an estimated value of $16.3bn. Both surveys use different measurement criteria.
See Personal Care Sector index for other companies.
Gillette celebrated its centenary in 2001, but its performance that year gave less cause for celebration. Since the 1990s, what was then the Gillette Company had faced fierce competition in each of its core markets from lower-priced competitors. In 1998, Gillette began a huge restructuring programme, making 11% of its workforce redundant and closing 14 factories. However, further turmoil in international economies continued to hit performance in 1999 and 2000, and the group was forced to issue a series of profit warnings, and make further cuts in jobs and slow-moving product lines. That eventually led to its acquisition by P&G in 2005. Restructuring under P&G and an improved economy restored the company to growth, but competition has remained intense. After all, there is a limit to just how many "improvements" a product as simple as a wet-shave razor can withstand.
The commercials for Gillette's core product range had traditionally promised to deliver "the best a man can get". But the best doesn't come cheap. During the 1990s the company spent ten years and $750m of research to develop its Mach 3 razor, launched in 2000 with a media spend of almost $250m. Was it worth it? Soon afterwards, competitor American Safety Razor (ASR) launched a rival own-label triple blade which attached to Gillette's handles and cost less. In 2003, Gillette filed a lawsuit against rival Schick to prevent the distribution of the four-bladed Schick Quattro razor which, according to Gillette, infringed its design patents. However the injunction was ultimately dismissed. It's a consistent problem. After all, arguably none of Gillette's products require rocket science in their construction. Instead the company must rely on its long-established reputation, and the skill of its marketing to maintain its status in a more turbulent environment.
Yet even those core brand values are under threat. In 2003 a German court was asked to consider a cheeky claim from rival Wilkinson Sword, the European arm of Schick, that Gillette is no longer "the best a man can get", and that therefore the company was misleading consumers with its advertising. The case was eventually dismissed and the judge ruled that the two blades were of "equal" quality. Schick has maintained the pressure on Gillette ever since, challenging a number of advertising claims made on behalf of the Mach 3 Power and Turbo razors. In 2005, for example, Gillette was forced to drop claims that these products raised facial hair away from the skin prior to cutting.
But if anything, these irritations have served to make Gillette stronger. It remains the dominant force in wet-shaving despite pressure from the revitalised Schick. Traditionally, there are three legs to the Gillette business model. The main goal is to sell customers a non-disposable razor, and then reap further revenues over time from the sale of replacement blade cartridges. Alternative sales are generated by sale of disposable razors to customers who don't wish to buy a refillable model. Overall, Gillette commands around two-thirds of the global shaving products market, some five times bigger than Schick. Euromonitor & Sanford Bernstein estimated combined sales across the Gillette range of almost $9.3bn in 2013.
The portfolio is now focused on three main families of non-disposable razors: Mach 3 and Fusion for men, and Venus for women, each of which offer several variants with different additional benefits. Disposable razors include the top-selling Custom Plus, premium Sensor 3, Good News and the Daisy for women. The key to growth is to encourage customers to trade up from their existing product to one that is better (and more expensive). This has led to a consistent game of one-upmanship between Gillette and rival Schick. The Mach 3 range was improved in 2002 with the launch of the Mach 3 Turbo razor. Responding to the threat from Schick's four-bladed Quattro, Gillette launched battery-powered vibrating M3Power, the first powered wet shave razor, in early 2004.
Its most ambitious launch, however, was the Gillette Fusion razor for men, featuring no less than five blades, as well as an extra single-blade precision trimmer for sideburns. The battery-operated Fusion Power version also carries an onboard microchip to optimize performance by regulating voltage and frequency. Meanwhile, Venus Embrace, launched in 2008, was the company's first five-bladed razor for women. Gillette's most recent innovation is ProGlide, launched in 2010. Priced another 10% to 15% above the ordinary Fusion, it offers several additional benefits including an even thinner blade, which promises less drag for an even (even) smoother shave as well as micro-stabilisers to steady the cutting edge. The ProGlide Styler, introduced in 2011, also has a separate trimming edge. Latest addition to the portfolio is a pivoting blade head, designed to angle the razor more efficiently to the contours of the face. The premium Fusion ProGlide Flexball launched in 2014 in both manual and battery-operated versions.
In 2009, P&G expanded its footprint a little further by moving directly into the retail market, acquiring The Art of Shaving, an upscale seller of shaving products with around 36 stores spread across 15 US states, located mostly in shopping malls. With the middle and upper parts of the market firmly under control, Gillette's biggest challenge since 2011 has tended to come from the value end of the market; not just low-priced products from Schick Wilkinson Sword, but also new entrants such as Dollar Shave Club (DSC) in the US. In response, P&G launched its own subscription-based Gillette Shave Club, offering direct deliveries of cartridges and handles, as well as a rewards programme. The acquisition of DSC by Unilever created new challenges, forcing P&G to announce a renewed push into lower-priced products as well as price cuts on its high-end razors. A move by Schick into Shave Club territory in 2017 led to an overhaul of the Gillette service in the US, and its evolution into Gillette On Demand allowing subscribers to order deliveries by text message.
Globally Gillette still has around 65% share of the male razors and blades sector, well ahead of Schick Wilkinson Sword (12.5%) and Bic (5.2%). Among US men, Mach 3 and Fusion are now the #1 and #2 wet shave brands in terms of blade sales. However, the brand's dominance of the sector has tumbled. In 2011, Gillette had almost 81% share of the US male replacement blades market by sales, and as much of 90% of the market by profits. Rival Schick had just under 17% (SymphonyIRI figures). Figures from Euromonitor suggested that US share had plunged to 59% by 2015 and then 54% in 2016. (P&G said its internal studies showed less of a decline). Schick has around 15% (down from 19% in 2011). Meanwhile the combined share of DSC and smaller rival Harry's had grown to 7.2% in 2015 and then 12.2% for 2016. Venus has more than 32% share of the worldwide female wet-shave market, but actually ranks behind Schick's best-selling self-lathering electric shaver Intuition in overall popularity.
Endorsement partners have included the New York Giants quarterback Eli Manning and comedian Isiah "Kelly From The Bronx". Another challenge has been a move away from facial shaving altogether, especially in Europe, where moustaches and beards became widely fashionable in the 2010s. This coincided with a global move (most pronounced in the US) towards body-shaving.
The group has become a big spender on sponsorship endorsements. In 2003 Gillette signed a $20m annual marketing deal in the US with Nascar and six top drivers - the Gillette Young Guns - to promote the brand to stock car fans. The following year, British soccer superstar David Beckham was signed to a three-year endorsement deal. That contract was originally said to be worth £40m, making it the most lucrative such deal in UK sporting history, but the figure was later reported to be greatly exaggerated. Beckham's contract came to an end in 2006, and he was subsequently replaced as Gillette's sporting brand ambassador by a global triumvirate comprising golfer Tiger Woods, tennis player Roger Federer and footballer Thierry Henry- the Gillette Champions - who were supported by one additional local athlete in each large market around the world. However, Gillette dropped Woods at the end of 2009 as a result of his marital scandal, and it distanced itself from Thierry Henry after a disappointing performance by the French national team in the 2010 World Cup. The Gillette Champions global concept was later dropped in favour of looser local endorsement partnerships. In the US, for the main men's shaving business, the company signed up a group of six rising football, baseball and NASCAR racing stars, under the Young Guns 2011 banner. In 2012, Gillette partnered with YouTube to launch Gillette Football Club, offering global coverage of football highlights from the world's top clubs and leagues. Federer remains a partner in 2017, alongside footballers Neymar Jr, Leo Messi and Antoine Griezemann.
The brand's most recent non-sports oriented campaign features three "masters of style", actors Adrien Brody and Gael Garcia Bernal and rap star Andre 3000. Meanwhile, for Gillette Venus, a deal was struck in early 2011 with singer and actress Jennifer Lopez to become the product's global brand ambassador. In 2012, Gillette began sponsoring Movember, the global charitable initiative to grow a moustache in the month of November to raise awareness of prostate cancer and other men's health issues. These sponsorship arrangements are not just limited to sports: in 2015, the brand tied up with Disney/Marvel's Avengers: Age of Ultron movie for a joint promotion, and a year later with Star Wars: Rogue One. In 2017 it even moved into eSports, in a deal with sports videogamer xPeke.
The Gillette brand is still limited to wet-shave products, and the blades and razors are supported by a range of shaving creams and other grooming products under the Gillette Series banner. During 2008, the group introduced a new line of body wash and hair care products under the Gillette brand, several of which are also themed to the Fusion or Pro sub-brands. Deodorants and other grooming products followed during 2009. As a result, the entire Gillette grooming products collection now runs to more than 60 separate products, even without blades and razors. However the lead brand in P&G's male deodorant and wash portfolio is now undoubtedly Old Spice (see P&G Beauty for more).
Braun, on the other hand, is used as the umbrella for traditional mains and battery-powered shavers and associated products. P&G claimed 25% share of the male shavers market worldwide in 2017, and over 50% of female epilators. Sales were around $500m. The Braun Synchro is the world's best-selling shaver; the Braun Silk-Epil is the best-selling electric epilator for women. Braun has its own collection of brand ambassadors including celebrity football manager Jose Mourinho, who became its first global ambassador in 2011. Since acquisition by P&G, Braun has exited other segments such as household appliances and thermometer and blood pressure devices. The household appliances division was sold in 2012 to DeLonghi of Italy, which uses the Braun name under license.
Oral-B, the toothbrush business previously owned by The Gillette Company is now part of the P&G Health Care business unit. Duracell became part of P&G Fabric & Home Care until its sale to Berkshire Hathaway in 2016. Gillette's portfolio of other deodorants and toiletries, including Right Guard, Satin Care, Soft & Dri and Dry Idea, were sold to Dial Corporation - now Henkel USA - in 2006.
Following several years of belt-tightening, and a renewed emphasis on core products, The Gillette Company's sales continued to improve in 2003 and 2004. Sales for 2004, its final full year as an independent company, rose 13% to $10.5bn. Net income was up by 22% to $1.7bn.
Following acquisition by P&G, Gillette and Braun formed the core of a new Grooming unit within P&G Beauty. That business reported sales of $8.0bn in fiscal 2011, up 5%, and net earnings of $1.6bn. It was the only one of P&G's reporting units to deliver an increase in net earnings for the year. There was another modest improvement in 2012, but for fiscal 2013, divisional revenues slipped by 4% to $8.04bn. Net earnings rose 2% to $1.84bn. For the year to June 2014, revenues from grooming were flat at $8.00bn, while operating income rose 6% to $1.95bn.
For the year ending 2015, volumes slipped by a further 3% but those losses were offset by higher pricing. At constant exchange rates, revenues were up 1%, but the currency effect reduced reported revenues to $7.44bn, with operating earnings of $1.79bn. The division accounted for 10% of group revenues, but 16% of net earnings, the only reporting business where the proportion of revenues was significantly higher than the proportion of group profit. P&G said that shave care products alone accounted for sales of around $6.9bn, with electronic hair removal products accounting for the remaining $500m.
For the year to 2016, revenues from grooming continued to decline, falling to $6.82bn, with net operating earnings of $1.55bn. The group reported a year-on-year net sales decline of 8%, comprising losses of 9% from foreign exchange, 2% from volumes, another 2% from product mix reductions, offset by a 5% gain from price increases. Shave care alone accounted for around sales of around $5.9bn in ye 2016.
Grooming suffered the biggest fall of any P&G division for ye 2017, down 3% to $6.64bn. Net earnings slipped 1% to $1.54bn. The rate of decline eased in ye 2018, but revenues continued to slide to $6.55bn, while net earnings slumped to $1.43bn.
Grooming was the weakest performer again in P&G's results for ye 2019. Revenues fell back by another 5% to $6.2bn, and the group pushed through a whopping $8.3bn impairment charge against the business. Net earnings from continuing operations, excluding that charge, were $1.5bn.
In the closing years of the 19th century, a salesman named King Camp Gillette spent six years searching unsuccessfully for a backer for his idea for a disposable razor blade that would save its users the time and trouble of having their normal razors regularly stropped and sharpened. The main obstacle was to find a way of producing wafer-thin slivers of sharpened steel that were strong enough to cut hair but so cheap that they could be thrown away after use. Finally in 1901 Gillette came across inventor and engineer William Nickerson, who was able to design the necessary process. The American Safety Razor Company was founded the same year, becoming The Gillette Safety Razor Company a year later. It was another two years before the first razor reached the market, but the product was an immediate success. The company moved overseas quickly, establishing a London office and Paris factory in 1905. By 1923, almost a third of sales came from outside the US.
In 1918, a contract with the US Army led to the bulk sale of 3.5m razors and 36m blades to soldiers, and arguably killed off the traditional barber shop shave for good. Gillette always had an eye for unusual marketing opportunities. The company sold its razors through banks during the 1920s ("Save and Shave!"), and teamed up with Wrigley's Gum for joint promotions. It launched its celebrated Blue Blade in 1934. After Word War II, Gillette began to diversify, acquiring Toni hairstyling kits in 1948 and Papermate pens seven years later. The company launched its Foamy shaving cream in 1953. A series of other purchases followed, including Right Guard toiletries and Cricket lighters.
Braun electric appliances was Gillette's first international purchase. It had been founded in Germany in the 1920s to make radios and eventually record players. It diversified into other appliances after World War II but only established an international reputation with the introduction of low-cost electric shavers during the early 1960s. It was acquired by Gillette in 1967 for around $68m in cash and stock. This was followed by Liquid Paper (1979), and finally leading US toothbrush maker Oral-B in 1984. That company had been founded by a Californian dentist in 1950 to make specialist manual toothbrushes, but it provided Gillette with a useful springboard to establish a US base for a Braun design for an electrically powered toothbrush.
Gillette fought off two takeover bids in the late 1980s, including one from Revlon, and refined its strategy of being the market leader in each segment it occupied. Further acquisitions included Waterman (1987), Parker Pens (1993) and ThermoScan thermometers (1995). In 1996, Gillette paid $7.1bn to acquire Duracell, the world leader in alkaline batteries. That brand was launched in the 1960s by the PR Mallory Company, which mainly specialised in what were then called mercury cell batteries, which were more reliable than traditional zinc carbon batteries, but were mainly produced for industrial and military use. It was something a pioneer in battery design, responsible for developing the modern AA and AAA battery formats during the 1950s. The Duracell brand was introduced in 1964, but the costs of producing alkaline batteries remained high and the company remained under intense pressure from better established producers. In the 1970s the business passed back and forwards between several buyers, becoming a unit of Kraft Foods during the 1970s. Mallory adopted Duracell as its corporate title in 1985, and was sold to buyout specialists Kohlberg Kravis Roberts in 1988. They floated it in 1991, before selling out to Gillette five years later, to bolster the company's own rechargeable battery technology.
Gillette was by this time heavily involved in complicated technological design and development. Throughout the 1960s and 1970s, it had been famed for its breakthroughs in shaving technology. The company invented the first system razor, the Techmatic, in 1967, so that users no longer needed to handle the actual razor blade. The GII, launched in 1971, introduced twin-blade shaving, followed by the Contour in 1984, the Sensor in 1991, which was the first razor to feature spring-mounted blades, and the Sensor Excel in 1994. However the company was becoming increasingly bogged down in product development. The Sensor was first developed in the UK in 1979, but Gillette spent more than 10 years and $150m on research before launching it commercially. The Mach 3 project was even more expensive. By the 1990s, as growth slowed, Gillette's critics were beginning to argue that these years of painstaking research simply allowed innovative competitors to leap in and grab niches in the market. After 18 months of profit warnings and disappointing performance, Gillette's chairman and chief executive Michael Hawley was ousted by the board in October 2000. A few weeks later the company launched Venus, its new shaver for women. It had already invested $300m in developing the product, and went on to spend another $150m on marketing.
In early 2001 the group sold off its entire stationery products division to Newell Rubbermaid, including the Paper Mate, Parker and Waterman pen brands and Liquid Paper correction fluid, following a catastrophic fall in profitability. Gillette finally found a replacement for Hawley in February 2001. James Kilts, former chief executive of Nabisco Holdings was appointed, the first time an outsider had been chosen to lead the company. He quickly began a further restructuring of the group designed to improve its competitive position. Having restored the company to growth he renewed his reputation for negotiating a good deal by agreeing to sell Gillette to Procter & Gamble for a handsome $54m, more than five times annual sales.
Last full revision 22nd August 2017
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