The Razor Blade’s Creative Destruction

Gillette controls 60 percent of the retail market for men’s shaving gear. Online, its share is 20 percent.

Where are we going? To creative destruction that is not cutting edge.

The Men’s Shaving Gear Market

During the 12 months preceding May 2015, the men’s online shaving gear market doubled. Totaling eight percent of a $3 billion market, online sales of men’s shaving products is shrinking Gillette’s market dominance. In stores, selling razors and blades is all about shelf space, attractive packaging and a locked display case to thwart shoplifters. Online, the sales pitch is value and simplicity. Using a subscription model, they say you can effortlessly get your blades regularly.

Online Shopping

A January 2015 survey of our shopping habits reveals what you would expect. Our online shopping is soaring. Between  2013 and 2014, U.S. shoppers who reported doing the majority of their purchases online increased from 36 percent to 61 percent.

XKCD does show us the downside:

Our Bottom Line: Creative Destruction

Explaining “creative destruction,” economist Joseph Schumpeter (1883-1950) said that economic growth depends on the pain of old industries dying and new ones taking their place. Now though we have creative destruction changing how we shop. Whether looking at Parcel’s evening delivery, Amazon’s hour delivery, or robots in the warehouse, we can find supply chain innovation eliminating old businesses and creating new ones.

Perhaps for razor blades, cutting edge design is not the way to avoid creative destruction.