Dollar Shaving Club and Social Enterprises: Can one learn from the other?
A changing dynamic in Consumer-facing businesses has meaningful implications for Social Enterprises
My earliest shaving experience was around the age of 13. After 10 minutes, reeling from from irritation everywhere, and minimal hair in the sink, I also felt slightly cheated by how much I had spent on the razor.
Across some consumer-facing industries, from shaving cream to mattresses to prescription glasses, a direct to consumer – plus (DTC+) model is leaving an indelible imprint in the Consumer Goods industry, delighting consumers and disappointing long-standing players with equal effect.
The conventional primary arenas where major Fast Moving Consumer Goods firms (FMCGs) meets the consumer involve grocery stores or wholesalers (however, online is playing an increasingly important role).
The DTC model is one that excludes third parties (e.g. grocery stores), directly connecting the manufacturer and the consumer (often, online).The ‘plus’ (+) often comes from being able to pass on savings to consumer, either by standardizing the product offering (by limiting customization opportunities) and / or possibly cutting profit margins
Of course, elements of the DTC+ model are not new in the field of Social Impact. For example, Bridge International Academies, by virtue of offering a standardized education curriculum, employs an element of the DTC+ model.
That said, there is an opportunity to evangelize this model across the sector, and share the benefits across low to middle class households in the developing world. Of course, DTC+ may not fit for every product (e.g. prescriptions), but there are probably many industries that can benefit from this approach, particularly in the context of Social Enterprises (e.g. electronics or agricultural inputs).