My longtime friend Larry Ingrassia dropped by Edelman yesterday with a copy of his new book, “Billion Dollar Brand Club.” Ingrassia worked at The Wall Street Journal for years, then became business editor of The New York Times before going on to the Los Angeles Times. He is a complete journalist, fair and substantive, who has taken the time to report in-depth on the remarkable disruption wreaked by start-ups such as Dollar Shave Club, Warby Parker and The Farmer’s Dog pet food.
Ingrassia starts with Dollar Shave Club and the irrepressible Michael Dubin. It turns out that Dubin is a friend of Ingrassia’s daughter, which is how Ingrassia first heard early on about Dubin's audacious plans. He was over for dinner at the Ingrassia residence telling the family about his plans to disrupt the razor market, dominated by Gillette, which held 70 percent of the market share. The big break for Dubin came in the now-famous YouTube video “Our Blades Are F*ing Great.” It generated buzz and, most importantly, sales. The product was at best at parity with Gillette, but the price gap was immense. The company relied primarily on ads on Facebook; the most effective were photos taken by customers of newly delivered razors. The ads were targeted at “whales,” people who ordered shave cream and other related products. Earned media played a central role in Dubin’s rise, as the doughty challenger against the establishment, offering blades at one-third the cost of Gillette’s. Dubin sold for $1 billion to Unilever in 2016, just after Gillette was forced to cut prices by 15 percent.
ThirdLove, a customer maker of bras, underwear, loungewear and nightwear, had a different story. The PR push came ahead of the reality, with positive stories in Fast Company, Forbes and Inc., but sales stagnated. The stratagem that worked best was Try Before Buying, a 30-day risk-free trial. ThirdLove was promoted via ads on Facebook as the world’s most comfortable bra. The company also developed a Fit Finder app to facilitate sizing.
Then there is Glossier, a skincare and beauty products company, which targets millennials and Gen-Z. The Manhattan Soho store is a set, used as a photo opportunity. Ingrassia writes comically, “Buying something is almost beside the point. Everyone inside the store seems to be clicking photos with smartphones of salesclerks, of boyfriends dragged along, of pets as companions looking bewildered.” Instagram accounts of customers have huge followings, as does the official Glossier account (2 million). There is a store destination known as Experiential Boy Brow Room that is specifically for taking pictures. In the Los Angeles store, there is a replica of Antelope Canyon replete with desert noises. The head of marketing speaks about retail as making a real consumer connection between the company and the customer or the customer with other customers.
There is a central role for PR in enabling these direct-to-consumer challengers. There is an equally vital role for us in helping the establishment brands fight back the start-ups. An Accenture study says that 90 percent of the top 100 consumer brands have lost market share in the past decade. The game plan is act small, create a platform for connection with customers (listen to them), and have a sense of humor. The battle will not be won with advertising; the victor builds the best relationships. Ingrassia said that he recognizes in Edelman some of the characteristics of these companies, including an obsessive entrepreneur (my dad and now me), a deep connection to clients and constant reinvention of the offer. It has taken the Edelman team about 60 years longer than the start-ups to get to this scale; we are the tortoise who just keeps on the path to victory.
Richard Edelman is CEO.