A holiday is always a good time to try something different and this year on my European break I grew a beard. I had a bruise on my chin that I wanted to cover (a bump, not a punch) which it did very quickly. But then I started to notice the other men who had beards - I hadn't realised there were so many. In fact a goodly portion of middle aged males drape fur on their lips and chins.
The immediate question of course was: what does that do to marketing? All around us we have advertising for new exotic razor blades, innovative electric shavers, gifts from the Shaver Shop. Can this hairy trend be harming these businesses? This seemed a good time to find out, with Father's Day coming this weekend.
The prominent company in this market is Procter and Gamble which owns Gillette on the razor and soap side, and Braun on the electric shaver and trimmer side.
The problem is, both these businesses are suffering from too much hair. Even when he is not fully bearded, you rarely seem to see a handsome tv hero without a five-day stubble on his face. (How do they always manage to keep it at that same stubble length? Do they cut it with nail scissors?)
Last month P&G complained that its grooming division sales had dropped by 18 per cent, and profits by 32 per cent in the fiscal quarter. That's painful for a business that has enjoyed over a century of pretty steady growth. The reason for the decline was easy to pinpoint. As a P&G spokeswoman stated, "The number of times some men are shaving is decreasing."
The same report admitted it was the worse outcome for any of P&G's myriad divisions. The grooming segment's quarterly organic net sales and volume each declined by 7per cent . Sales in developed markets dropped by a high-single-digit percentage, and by a mid-single-digit percentage in developing markets.
The grooming segment made up about 10 per cent of P&G's annual sales in fiscal 2015, but 20 per cent of its profits, reflecting the high margins on razors and blades. Five years ago a British Office of Fair Trading investigation revealed that the five-bladed Fusion shave blades which can cost around $5 each, are manufactured for 10 cents. So yes, that's a healthy mark-up.
One bright light for the razor gang, though, is also fashion related. Men are shaving other parts of their bodies, more. Think of all the men who have swapped their natural monk's tonsure for a totally bald head a la Yul Brynner. Not to mention all the chest and arm hair that must be removed in order to show off the large, expensive tattoos.
However the folks from P&G have a few good days ahead. IBISWorld researchers have reported rises in the amounts spent for Father's Day. While still only half of what is spent for Mother's Day, now 35 per cent of gifts come under the category of "personal care". Which must contain a good few boxes of razors, blades and trimmers.
ray@ebeatty.com
