Friday 22 July 2016 2:59 pm

Unilever's razor sharp move in buying Dollar Shave Club is a major shift in how brands sell to customers

Unilever wowed the markets on Wednesday when it unveiled a surprise acquisition of razor subscription brand Dollar Shave Club (DSC) for a reported $1bn. 

DSC's buyout by the consumer goods giant not only demonstrates the huge success the brand has achieved since launching in 2011 (and then going viral with a video marketing campaign in 2012), but also the credibility of its innovative business model.

Dollar Shave Club is a subscription service in which customers choose one of three razors and are then posted replacement cartridges for a few dollars per month.

Its product offering has expanded in the past few years to include men's personal wash and skincare products, hair styling products and "One Wipe Charlies" daily wipes.

Read more: Why design is finally having its day

And the company, which has 3.2m members, reported turnover of $152m in 2015 and is on track to exceed $200m this year.

Forget store shelves – sell to consumers directly

What Unilever has bought via this deal is a proven route to market, where consumers are sold to directly, away from the restrictions and codes of the traditional retail environment.

The move will open up huge opportunities for its wider brand portfolio. If Unilever decides to adopt the direct sales approach across its other products (which is now highly expected), we will see a huge difference in how brands interact with and reach their audiences.

It’s partly about time. The way people shop, communicate with brands and respond to marketing is changing rapidly as new technology emerges and people adopt increasingly fast and fluid lifestyles – only brands that future-proof themselves now will continue to thrive. 

Read more: Brands and agencies should market themselves better to their own staff

It’s only right that the brands react to these changes and pursue a route to market that enables them to have direct and even personalised interaction with their customers.

And it’s not only the sales method that will be affected. As touchpoints and channels continue to diversify and evolve, brands need to look at their design and packaging to ensure that they are no longer crafting products that only stand out on the shelf or online.

Disruptive brands

For years brands have invested energy and money into enticing and attracting shoppers with a charismatic on-shelf presence.

But with emerging brands such as Graze disrupting the channel and making a hero of its packaging, the message is beginning to get through.

Ultimately, this Unilever deal with DSC marks a watershed moment for the industry, in which a challenger brand has been given the opportunity to educate and guide an industry stalwart through the maze of modern customer relations.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.