When Harry’s launched in 2012, co-founders Jeff Raider and Andy Katz-Mayfield were trying to connect the dots between quality razors, affordable prices and a brand that could connect with consumers.
“I can tell you exactly where it was’ it was a Rite Aid on 14th and Wilshire in Santa Monica, California. I had run out of razor blades and was wandering through the store, looking for somebody to unlock the case, because they were locked away,” said Katz-Mayfield, regarding the brand’s inspiration. on the Glossy Beauty Podcast. “They’re locked away because they’re so expensive and they get shoplifted all the time. It was this absurd experience. … I was looking at the shelf and the brands that were on the shelf, and they didn’t speak to me as a consumer. There was like a picture of a razor blade flying over the moon on one of the packages. Obviously, what the brand was trying to communicate was, ‘Oh, there’s all this space-age technology in this thing, and therefore you should pay $25 for a four-pack of razor blades.’ But I was like, ‘Should I really, though?'”
Katz-Mayfield Gchatted Raider, who had recently co-founded Warby Parker, another early DTC disruptor. The two met while in college as consulting interns at Bain & Company.
“We say he called me a lot, but actually, he Gchatted me. I was at work, and he said, ‘Hey, I had this really bad experience in a drugstore, being overcharged for razor blades by these brands that don’t really connect with me. Do you think you could take what you learned at Warby Parker, building [a] brand that people love, trying to do good in the world and for customers, and bring design and style to an industry that might have lacked it before, in razors and razor blades?’ I remember reading that and thinking, ‘Wow, this is an awesome opportunity,'” said Raider.
Though the brand is just nine years old, Raider and Katz-Mayfield have lived many lives with Harry’s. The brand has gone from a best-in-class startup to an acquisition target and the focus of the Federal Trade Commission, to now a different type of parent company that acquires and incubates its own brands. Those have included Lume and Cat Person.
“What Harry’s and Flamingo both did was they found an unmet consumer need, an opportunity to do something that was actually better for somebody. … It started with delivering really high-quality products at a great value, and then also speaking to people how they wanted to be spoken to in these categories,” said Raider. “We felt like we had the opportunity to build brands and unique products that differentially meet consumers’ needs and do it on DTC. That could actually be applied anywhere in CPG.”
Below are additional highlights from the conversation, which have been lightly edited for clarity.
An omnichannel mindset
Katz-Mayfield: “We still believe pretty deeply in the power of direct-to-consumer — certainly throughout a brand’s lifecycle, but in particular, in the early days. There’s like two things that are really important there. One is that when you’re when a brand is new or in its infancy, direct-to-consumer is an amazing environment to test, learn, iterate, try new things and fail fast — you know, quote-unquote, ‘product-market fit.’ It’s very hard to do that in retail. When you launch in retail, you can’t just swap things in and out. It has much higher stakes and is a more static environment. You get one time a year in which you’re able to refresh the assortment. As a direct-to-consumer brand, you can do that every single day, and test what works from a marketing standpoint and what types of consumers are buying. That’s really valuable. For brands that rush into a retail environment too quickly, there’s a real risk that you just haven’t figured that out first. The second [point] is that, as you are deploying performance marketing dollars into the world, you’re building awareness and a loyal customer base. [There’s] a bunch of awareness among people that maybe haven’t converted on your website, but over time — and we saw this with Harry’s, and we’ve seen this with other brands that we’ve brought from direct-to-consumer into retail — there’s all this pent-up demand that you’ve created effectively, that can then convert across 1,800 stores at Target or 3,500 stores at Walmart. The value of those two things — and it does take some time to do both of those things: to test, learn and iterate, and to build a business — lends us more to the belief that we’ve got to be patient and build things a little bit more gradually direct-to-consumer before we bring them into a retail environment. Because they’re gonna be that much more successful in a retail environment.”
After the FTC
Katz-Mayfield: “About five years into the journey, we got really excited about building a multi-brand, multi-category CPG company and leveraging everything we had learned within the Harry’s brand and shaving, and all of the infrastructure that we had built to support Harry’s. [That includes] the actual unsexy, backend stuff, IT systems, but also the capabilities around retail and omnichannel marketing. … We’d started down that journey and then Edgewell came along, and it was a unique company because they had a shaving business, and we thought that there was a lot of value in combining our shaving businesses. There was technology transfer, and there was an opportunity to position their brands and ours differently in the grand battle against the evil empire, who shall remain nameless. So we were like, ‘This is going be great for consumers, the best thing that could happen in the category.’ They had a portfolio of brands, including sun care and a few other categories we thought were interesting. They weren’t built for the modern era, but the idea of reimagining those brands was an interesting and exciting proposition for us. … It was an M&A transaction, for sure, and there was some liquidity for us and our shareholders, and all that. But it wasn’t a normal deal where I was like, ‘Alright, cool, we’re going do this for a couple of years and then peace out.’ It was a different way to achieve our vision. And so, when the process with the FTC did happen, it was obviously disappointing, because we had spent a lot of time and energy on it. … We were like, ‘OK we need to go back to sort of building this thing organically, both through incubation and M&A.’ In some ways, what I would say with the benefit of retrospect and hindsight is: We did get a look into the belly of the beast, when it comes to big consumer product companies — how they operate, how they’re wired — and retail. We’re like, ‘Man, the opportunity to disrupt across multiple categories here, and the differentiation around our approach and using direct-to-consumer, it’s pretty different.’ And so, we had that much more confidence and excitement around doing it on our own.”
The road from disruptor to conglomerate
Raider: “If you think about where other CPG companies have focused, they’ve said, ‘We’re gonna win in deodorant, and we’re gonna win there because we can make deodorant more cheaply than everybody else, and we can dominate the shelf at retail. That’s not why Harry’s is successful; we weren’t making products more cheaply. And we had a presence at retail, but it’s because customers wanted us there. We weren’t trying to dominate a retail shelf. When we looked at our approach, we said, ‘That’s actually freeing for us.’ We can take these capabilities — build unique brands, try to really solve consumer problems, have the brands have a purpose and mission — and we can apply them to any category. We just need to find opportunities.”