Gillette has axed CEO Michael Hawley.
Mr Hawley’s resignation comes at short notice, but is no surprise. Gillette has been struggling in the face of stiff competition from copycat products and the poor performance of subsidiaries and the CEO naturally takes the blame. But Gillette is not the only company to suffer. Revlon has also hit the hard times and this week announced a new efficiency drive to cut costs.
The poor performance of these two personal care manufacturers highlights that established positions are no guarantee of success in mature markets. There is hope, but it requires forward thinking. Key growth opportunities lie in new channels, namely the Internet, beauty salons and the newly emerging retailers. Whilst personal care pureplays have not yet found a successful formula, the growth of online retailing will hold benefits for manufacturers, especially when they operate through retailers’ own sites. The salon channel and retailers like Sephora are also seeing high growth that manufacturers can target.
New consumer groups also offer an excellent opportunity for Gillette and Revlon to pull themselves out of the doldrums. Consumers are increasingly seeking stress relief and emotional benefits from their purchases, buying indulgence goods like aromatherapies. Also, men have broadened their interest in grooming to include manicures, pedicures and skincare – much more than the occasional splash of aftershave and moisturizer.
To enter these new channels Gillette and Revlon will have to refocus. It could be a painful process and shareholders may be unwilling to accept major investments. But the opportunities are waiting for forward thinkers. If these manufacturers don’t move quickly their competitors certainly will.
