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Harry’s | Giving Men’s Grooming a Clean Shave

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"Quality craftsmanship, simple design, modern convenience and most importantly for guys who know they shouldn't have to overpay for a great shave."

Leave the office. Take the subway. Go to the pharmacy. Find the personal care aisle. Ask a sales associate to unlock the razor cabinet. Pick and choose razor and blades. Pay for them. Regardless of where you are or how many of these steps you take to buy your razor, it’s always a hassle. In a world filled with over-priced, over-marketed, low-quality razors Harry’s makes “groom” for a better, convenient, and more efficient way.

Who? // Launched in 2013, Harry’s was founded by Warby Parker co-founder Jeff Raider and Andy Katz-Mayfield as a vertically integrated, e-commerce company selling a fairly-priced, high quality razor for men. Just over two years later, Harry’s has taken on the “the big boys of shaving”, Shick and Gillette, raising over $280 million in funding and reaching a $750 million valuation—a success that has been attributed to the remarkable synchronization of its business and operating models.

Business Model: Direct-to-Consumer + Ready-to-Shave // Harry’s core competency lies in offering sleekly-designed, optimal quality razors, blades, and grooming product to today’s sophisticated man. In a space dominated by a handful of players pushing artificially priced products (with no respect to the quality of the product), Harry’s bring the experience online to help remove the friction and high costs from distribution, give the product a sexier name and look through smarter design. Harry’s value proposition spans across four different dimensions:

harrys-xlA. Pricing: thanks to its vertically integrated approach, Harry’s offers products at half the prices of its competitors (2 razors at $10 and $20, $2 blades, $6-$8 face products, and $25 kits)

B. Design: minimalistically designed razors blending “timeless simplicity and modern ergonomics”, which are aptly labeled with “old-school” and sophisticated names as Winston and Truman, cleanly concocted face creams and moisturizers, and chic grooming kitsScreen Shot 2015-12-09 at 11.24.12 PM

C. Accessibility: launched exclusively as an e-commerce merchant with seamless distribution capabilities providing affordable “Shaving Plans” with free trials, automatic refills, and easy modifications / cancellations

D. Experience: unlike its competitors, Harry’s is an aspirational luxury and lifestyle brand—as evidenced by the opening of its 1920s-themed and elegant barbershop “Harry’s Corner Shop” in Soho to bridge the gap between its gentlemanly customer’s online and offline behavior

cornerAs a complement to Raider’s Warby Parker and commitment to give back, Harry’s aims to “give a shave” about getting people ready for their lives and careers through its “1+1” program where it donates 1% of sales to City Year’s New York chapter and 1% of its time to work with City Year.

Operating Model: Iron Law of Distribution, No Problem // Harry’s is the only razor blade company that owns the the entire process from manufacturing of the razors to engagement on the consumer level through direct sales. 

Prior to launch, Harry’s co-founders globe-trotted to source the best manufacturers until in early 2014 they came across 90-year-old German factory, an experienced and flexible manufacturer of double-edged and five-edged blades, that have become the staple of Harry’s. With the purchase of Feintechnik, Harry’s now has the ability to control the design and manufacturing of its products, and sell directly to consumers. Razor blades are hard to make and easy to mess up but by having direct control of the process, Harry’s is able to change the molecular composition of the steel and then factorygrind it so that it’s very sharp at its tip and strong at the base. At the same time, Harry’s can take feedback to the customer and invest back into the manufacturing process to ensure a high quality product every time. Harry’s has begun to track customer purchasing habits in order to allow them to email those customers when they think it’s time for them to buy new blades. As its customer base expands and it gathers more data on their style and tastes, the company will look to expand this kind of functionality to bring more Amazon-style personalization to its shopping experience.

By eliminating unnecessary costs and disintermediating the supply chain of razor production, Harry’s is able to allocate its capital more efficiently towards research and development of new products and customer engagement through its online portal and brick and mortar corner shop. By doing so, Harry’s is able to remain competitive, accessible, top-of-mind and create value to its gentlemen.

Trimming the Path Forward // Since its launch over two years ago, Harry’s has successfully aligned its business and operating models and yielded 500% growth in its revenue base. The company is not only seeking to strengthen the quality and delivery of its core products, the razors, but also to expand the offering to women’s grooming and dental hygiene products. Unlike Warby Parker, Harry’s is not planning on going down the brick and mortar store concept just yet, but they’re clearly trimming a trailblazing path across an industry that’s been due for a clean shaving. 

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Sources:

  1. https://www.harrys.com
  2. http://techcrunch.com/2015/07/07/harrys-raises-75-6-million-in-series-c-valued-at-750-million-post-money/
  3. http://techcrunch.com/2014/01/22/10-month-old-harrys-lands-122-5m-buys-93-year-old-factory-to-go-toe-to-toe-with-gillette-and-schick/
  4. http://www.forbes.com/sites/forbestreptalks/2015/09/23/how-harrys-is-taking-on-the-big-boys-of-shaving/4/
  5. http://techcrunch.com/2014/01/22/10-month-old-harrys-lands-122-5m-buys-93-year-old-factory-to-go-toe-to-toe-with-gillette-and-schick/
  6. http://www.forbes.com/sites/stevenbertoni/2015/07/07/razor-wars-harrys-raises-75-million-to-fight-gillette-and-dollar-shave-club/2/

 

19 thoughts on “Harry’s | Giving Men’s Grooming a Clean Shave

  1. Really interesting Gabo. Thanks for sharing. I had heard of Harry’s before reading your post, but never would have guessed that they did their own manufacturing. Rather than simply a cost-advantage, it seems like being a manufacturer provides a significant benefit for innovation–Harry’s can quickly incorporate feedback from customers into product designs and the manufacturing process/materials.

    I also thought the question of brick-and-mortar was interesting in this context. I recently read another post about GNC (the supplement company) from another student that is severely suffering because their brick-and-mortar model, that is supposed to provide education to customers, is being upended by bodybuilding.com which educates customers virtually. That leads me to wonder, what value does a brick-and-mortar presence bring to Harry’s? It it a way for new customers to get introduced to the brand?

    1. Thanks for reading, Ryan! You are absolutely right – by having control of the manufacturing process they have the opportunity to innovate without restrictions. You can definitely see the move towards vertical integration across many industries nowadays, especially within the retail space (i.e. Warby Parker, Suitsupply, Bonobos), and it makes me wonder – why haven’t companies done this before?

      In terms of your brick-and-mortar question, I think you’re spot on with your question. Given that Harry’s is a primarily a razor brand now, I believe having freestanding stores does not make sense at this time. A razor is not something you “try on” as you do a pair of glasses or a piece of clothing but something you need to experience, which is why I think the opening of their “Corner Shop” was genius. I think they should aim to open more of these locations in selected cities across the country and in other countries as they expand their global footprint. The purpose of this particular form of brick-and-mortar is certainly not only to attract new customers but also for the current online customer to have an offline experience in which they can get immersed into the brand. As Harry’s diversifies its product offering (particularly if they make a move into women’s beauty) in the medium- to long-term it might make sense to extend its point of sale to brick-and-mortar, although to be successful and continuously aligned with their brand I think they will need to be very selective on the number and location of the stores and the curation of their products.

  2. Gabo! Love that you chose Harry’s. As you mention in your post (and Ryan in his previous comment) the vertical integration in manufacturing really is key to Harry’s business model. While I was working there, one of the key things I did was work with the factory to deal with capacity constraints. For any small business getting a major factory to prioritize your line over other more established customers is extremely tough, so having your own manufacturing facilities really gave us a leg up. The razor blade industry is actually even more consolidated than other industries manufacturing wise and there are really only five manufacturers in the world who can produce quality blades, even more of a reason that Harry’s had to own their own. Great post!

    1. Thanks for reading, Nina! I hadn’t thought about the fact that outsourcing your manufacturing to third parties brings the disadvantage of competing with other brands for prioritization and space in their facilities, so you’re absolutely right that as a small brand with little leverage going for vertical integration makes sense. This of course being on top of the end-to-end (design to sale) control vertical integration provides. The business and operating models and brand strategy Harry’s has adopted certainly make it a fascinating place to work for!

      1. Great post Gabo! Question for both Nina and you. Do you think there are other consumer products categories that would benefit from a similar disruptive model? Is there opportunity to enter new categories by integrating end-to-end and therefore offering a better product at a better price?

  3. This is a very cool post as I’ve been to a Harry’s shop before in NYC but never realized that it’s the ONLY vertically integrated shaving company. Their operations and integration remind me of Starbucks. But I think Harry’s does a better job with the pricing and still provide a unique customer experience.

    1. Thanks for reading, Bing!

  4. The only thing I hate more than shaving is buying razor blades at the grocery store. I had no idea that this existed in a vertically integrated fashion. I am incredibly impressed that the founders had the foresight to do that. The only direct competitor I see in this space is the dollar shave club which has marketed themselves on being inexpensive but also manly. But if I think about it, it seems that harry’s has a bit more high end feeling with its kit and personality, which is more appealing to me. I will have to check it out!

    1. Thanks for reading, Matt! Yeah, I’m with you there on the hassle. You should definitely check them out!

  5. Very cool.. I didn’t know the tie to Warby Parker…makes so much sense! Thank you for the post…

    1. Thank you for reading!

  6. As someone who has tried out nearly every shaving company (Gillette, Art of Shaving, Dollar Shave Club, Harry’s), I appreciate that you took time to discuss how Harry’s is the only one that’s vertically integrated. The value in price to the consumer is undeniable with Harry’s and Dollar Shave, but I’m cautious about these companies because of the blade design patents that Gillette has secured over time. For example, Gillette’s line of razors use multiple (3-5) blades lined side by side, each one nearly parallel to the face when shaving. Harry’s, on the other hand, has blades that are more perpendicular to the face, causing far more irritation when shaving. I wonder how much this will matter to consumers over time, and if they’ll be able to take significant market share from Gillette despite having less-than-stellar reviews from those who have tried out multiple brands and styles of razors. I also would not be surprised if Gillette acquires Harry’s as a preemptive measure.

    1. Point well taken, Akash. From my understanding, it seems the big boys like Gillette and Shick have patented the design of their razors, which puts a lot of limits to the design Harry’s can develop for their own razors. I would think that as they keep growing and receiving customer feedback (which their vertically integrated model allows for) they’ll be able to manufacture blades that are less uncomfortable. With respect to an acquisition by Gillette, it wouldn’t be surprising to me either although I would think that Harry’s has established such a strong, niche, and quirky brand that they would be hesitant to sell out.

      Thanks for reading!

  7. Cool post. Love this company. I just googled Gillette and the most prominently sponsored advertisement is the Gillette shave club! I wonder how Harry’s is/will respond to acquisition attempts in the coming years. I also wonder when/how Harry’s moves horizontally into knew categories given their strong brand reputation and foothold in consumers’ wallets.

    1. Thanks for reading, Patrick! Echoing my response to Akash above, I wouldn’t be surprised if companies like Gillette attempt to acquire Harry’s. However, I would think that given the image and unique brand Harry’s has built as a direct-to-consumer company, it would be difficult for management to give the company away and essentially sell out. When it comes to horizontal expansion, they definitely have to be careful not to deviate too much from their core competencies and DNA, especially if they decide to move into women’s products (simply because from my perspective the branding have been very male-focused). I guess we will have to see.

  8. Great post. I think Harry’s is incredibly interesting, even more so than Dollar Shave Club given what you described about vertical integration. I always thought part of the innovation here was the ability to disrupt large brands via low-cost viral marketing (in addition to direct-to-consumer sales). It would be really interesting to know how much Harry’s manufacturing costs on a unit basis differ from those of established players like Gillette given the difference in scale. Clearly there is money to be saved for the consumer by cutting out the distribution margin, but I wonder how much of this business model is about undercutting the massive markup that exists in this highly consolidated industry vs. the possibility of truly creating a lower-cost manufacturing operation.

  9. Great post, Gabo. And beautiful layout. I especially appreciated that you included thoughts about plans for the business moving forward. I would be interested to hear how they plan to expand to other hygiene/care sectors and will be curious to see how they navigate a more medical field such as dental hygiene products where consumers might feel more loyalty to specific toothpaste formulas, etc.

  10. I love this post – and I love Harry’s! Thanks for spotlighting it.

  11. This was a really great post, and I really enjoyed reading about Harry’s!! I’ve never been to a store but reading this definitely makes me want to go to one!

    I have to wonder though, with the Warby Parkers and Harry’s of the world, what are the potential downsides to their model? There’s been a lot of hype, and I definitely love Warby Parker personally, but I wonder if in the long term they can maintain their model as they scale to the level of a market leader in terms of market share. Because at some point, it makes sense for certain parts of the supply chain to be run by specialists, especially at a larger scale, right? Or maybe it doesn’t and they can maintain their vertically integrated model!!

    Definitely excited to watch and see what happens!!

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