5 August 2019 Courier Aug/Sept 2019

Blade runner: design in the world of Harry’s

When an old-world company bought shaving startup Harry’s there was an important condition – design would become central to all of their shared future success.

Ten years ago, the male grooming market was ripe for disruption. Having followed a Victorian formula for much of the 20th century, presenting shaving as a daily ritual to be faced with manly forbearance, the rise of the ‘metrosexual’ in the 1990s saw a wholesale import of feminine care rituals (barely updated with blue branding). Gillette, Wilkinson Sword and Schick so thoroughly dominated the market they became used to money growing – if not quite on trees – then at least on chins.

But the comfy oligopolies haven’t performed as well in the digital age. Male grooming has been cut down to size by innovative direct-to-consumer brands such as Harry’s. While razors cost pennies to manufacture, they traditionally retail for such an inflated price that most shops tag them for security. Harry’s offered a simple subscription model that closed this gap, meaning the customer could reduce his spend to a couple of dollars a month. This was achieved by rethinking the entire supply chain that saw Harry’s buying a family-run, century-old razor manufacturer in rural Germany. Soon, Harry’s attracted the attention of the big boys. Earlier this year, Edgewell Personal Care – which owns brands such as Wilkinson Sword, Schick, Banana Boat and Hawaiian Tropic – bought Harry’s for $1.37bn.

So far, so familiar: a disruptive brand born online sells to an old-world holding group for an eye-watering sum. (Even Harry’s main competitors, Dollar Shave Club, sold to Unilever back in 2016 for around $1bn.) But there’s a key difference that makes this buyout unlike most others. Mainly, it’s not being presented as a ‘buyout’ at all, but as a merger between brands that have equal amounts to gain from the process – with design considered central to all of their shared future success.

The founders of Harry’s, Andy Katz-Mayfield and Jeff Raider (of Warby Parker fame), will become co-presidents of Edgewell’s American operations as part of the deal, overseeing brand strategy in the region and shaking up the entire group portfolio in the process. Rather than being treated as a cherry on the cake, design was a deciding factor, putting Harry’s vice president of design Scott Newlin and his team at the centre of the growth strategy not just for Harry’s but for the likes of Wilkinson Sword as well as Schick.

‘Design is a strength of Harry’s, and it’s among the reasons why we’re excited about combining our companies,’ says Rod Little, CEO of Edgewell. ‘As we plan out the future of our combined companies, it’s imperative that design continues to play an important role – not just for the Harry’s brand, but across our entire portfolio.’

The deal isn’t set to conclude until March 2020 and plenty could change before then, but there’s clearly an appetite from both sides to build a partnership of equals. Design principles, it seems, have overturned the traditional buyout process, putting David and Goliath on level pegging.

Increasingly it makes good business sense, too. A new study from McKinsey analyses 2m data points and 100,000 ‘design actions’ across 300 public companies. These design actions can mean anything from putting a design leader on the executive board to linking CEO bonuses to design objectives, but McKinsey condenses them into four overarching themes: tracking the impact of design as a metric; putting the user first by talking to them directly; embedding designers in cross-functional teams; and encouraging early stage prototyping. Businesses that execute these actions best enjoyed 32% more revenue and 56% more total returns to shareholders than those that did not.

Newlin is just 36 but his remit already extends far beyond product and branding. He leads a team combining industrial, graphic, print and interior design that works across all aspects of the business. His team is, he says, a ‘studio’ within the company, creating a client-agency relationship rather than an in-house department beholden to every corporate whim.

‘In-house design can become a little stale. On the flip-side, external agency projects can lack a depth of engagement,’ he says. ‘We wanted to smash that divide and create something that combines the best of both: the ownership of in-house with the fresh thinking of an agency. We always aim to deliver on business goals, but we are also there to break the brief and push barriers a bit’.

Using his experience at firms such as IDEO (labelled ‘the geekiest design studio ever’ in one article) and the industrial designer Karim Rashid, Newlin’s multidisciplinary approach challenges industry conventions in the very structure of the studio, as well as through product design and manufacture. He has designed everything from furniture and TVs to soap dispensers and dustbins, while at Harry’s he’s responsible for anything physical that the brand puts out – the razor components and the packaging, for example, plus all of the offices, pop-ups and in-store displays.

The vertical setup at Harry’s gives Newlin’s team strong control over the supply chain. ‘Good communication is the key here,’ he explains. ‘It’s the only way to ensure that our original vision actually gets translated into reality. It’s a bit like chucking an interesting idea over the wall and it coming back that little bit less interesting.’

Owning a manufacturer introduces extreme control from the outset, and this tracks all the way through to point of sale, where the direct-to-consumer relationship creates an outsourced R&D department of sorts. ‘I’m constantly in touch with our customer experience team and we use that feedback to iterate and evolve our thinking. You wouldn’t get that level of directness if you were selling through an intermediary.’

It’s always been hard to put a price on good design. Whereas many business objectives can be tracked with concrete KPIs and quarterly targets, design is a little more elusive. Its impact on a brand is beyond doubt, but its contribution to the bottom line can be hard to quantify.

‘Personally, I feel like I’m living through a great era for design,’ says Newlin, who sees the likes of Jony Ives as having pioneered the connection between good design and good business. ‘This new generation of disruptive companies that we’re part of are all totally different, but the thing that ties us together is that we really put a premium on good design. We have different business plans, we have different products, we have different channels with which we reach customers – but the core idea of making beautiful products with great branding and slick communication at every level unites us. Good design is now core to the way modern businesses function and act, it’s no longer on the surface of things.’

Harry’s has always thought of design slightly differently to most companies.
The company didn’t just set out to overhaul the hardware hidden in our bathroom cabinets, Newlin says, but to redesign ‘the entire human moment’ of standing at the sink: ‘Getting ready for work in the morning or for an event in the evening is such a key part of the day.

Yet for men it was being treated as a chore. We wanted to elevate that moment to a form of self-care… It’s not just about making a product look pretty. Design sits at the core of our entire operation. My team touches every part of the process.’

Still, disruptive design-led brands haven’t always kept their lustre during the buyout process. Innocent Smoothies made their name in the early 2000s with smart branding and a playful tone, but when Coca-Cola took a 90% stake in 2013 the brand lost its challenger position: although committed to the same organic and ethical credentials, its innovative and fresh approach seemed to fizzle out.

Unilever has also gone on a spending spree of challenger brands of late, buying the likes of Pukka teas and Ecover cleaning products, but both brands have experienced a backlash against a perceived clash in company ethos.

Newlin is the first to acknowledge the risk of losing your edge by becoming part of a hulking corporate ecosystem. ‘It does sometimes feel like it’s the guys who get bought who are the ones that end up disappearing.’

With the merger still underway, Newlin is coy about committing to a future vision for the likes of Wilkinson Sword were his team to be let loose on the Edgewell portfolio. After all, it’s notoriously tricky to change company culture, and transformational design of the type championed by Harry’s has to be implemented on all levels of a business.

Whether this new world approach can be successfully transferred to old world companies remains to be seen, but the fact that Newlin already leads a studio geared towards clients rather than a single monolithic mothership is an important step in the right direction. Disruptive design could, finally, be about to clean-up the grooming market. Companies in other sectors would be well advised to pay attention.