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May 3, 2004 - Strategy Magazine
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Razor Wars
It's a $270-million cutthroat battle: Can anyone catch category leader Gillette?

by Susan Bourette
page 2

The razor giants are squaring off in an increasingly cutthroat war - a growing battle for Canada's whiskers valued at $270 million. The question is: can Gillette maintain its edge?

Certainly Gillette believes it can, brandishing its brand with a flick to the past and plenty of tub-thumping attitude: "Gillette. The best a man can get," the ads proclaim from the TV screen. Meanwhile, click to another channel and the battle cry is just as pitched: "The power of 4," a voice declares while Quattro, Schick's newest weapon in its arsenal of high-tech razors, flashes across the screen.

What's going on? A scuffle the razor category hasn't seen in years. But few believe that Gillette will soon be toppled from its perch as category king. Indeed, with a 76% share of the Canadian razor market - measured in terms of dollar value - the company's juggernaut is staggering.

Still, there's been good news for the second-rung competitor, too. According to ACNielsen's most recent figures, Schick has been quietly building its market share, climbing four points to 14% in the past five years. Players such as Bic and Revlon, and a host of generic manufacturers share the remainder of the market.

If Schick gets its way, it will continue to chip away at Gillette's market share. "We've become a formidable competitor over the past few years," explains James McIntosh, marketing manager for Schick Canada in Toronto. "Our target is to keep growing. We envision a day when we could outpace Gillette."

For its part, Gillette says it welcomes the newly heightened competition.

"We think competition is good for the entire category," says Iain Chalmers, marketing director for Toronto-based Gillette Canada. "That competition will help grow the entire market."

The battle lines were re-drawn in January 2003 when Energizer purchased Pfizer's Schick-Wilkinson Sword razor business, bringing a new buzz to the competition. Energizer - confident it could build market share in Pfizer's once underperforming razor business - set off a new wave of technological innovation, an area once dominated by Gillette.

"Certainly that was the turning point," explains Dino Galati, senior analyst at Dominion Bond Rating Service in Toronto. "Gillette has been the real innovator over the years. And here comes Schick, just bought by Energizer, and almost immediately, we see them creating a new razor. From that point, the battle was on."

The category has undoubtedly come a long way from when men shaved with flint blades as far back as 30,000 BC. In fact, it has always been driven by technological innovation, according to the experts.

Over the past two-and-a-half years, the two major companies have been locked in a tooth-and-nail fight to see just how many blades can be crammed into a disposable razor. Gillette's flagship product, the three-bladed Mach 3, has been scraping for turf against Schick's latest salvo, the four-bladed Quattro. This month, Gillette will unleash its first battery-operated shaver in Canada. The price tag? Somewhere between $19 and $22 - a steep jump from today's razor prices that run at the upper end to $16.

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