Scott Galloway on Honest Company and Unilever (video)

Scott Galloway on Honest Company and Unilever:

CPG giants Unilever and Procter & Gamble are taking different approaches to fighting competition from innovative startups in the category. Procter & Gamble has invested in its own Gillette Shave Club to rival Harry’s and other razor subscription services, while Unilever is going the acquisition route. It purchased Dollar Shave Club in July and reports surfaced that it was in talks to buy The Honest Co. – which offers subscription diapers and organic personal care products - for $1 billion. Scott Galloway has some advice for all parties involved. Video above published September 20, 2016, by L2inc.com. Scott Galloway is a NYU Stern Marketing Professor and founder of L2inc.

Note: "CPG" is Consumer Packaged Goods.

Domains of the brands referenced above:

• unilever.com
• pg.com
• gillette.com
• harrys.com
• dollarshaveclub.com
• honest.com

Transcript viaYouTube.com:
0:00  So the celebrity deathmatch of this week Apple vs Samsung? No. There's a bigger
0:10  fight shaping up and that's between Unilever and Procter & Gamble what
0:14  brought this on the category has enormous margins and it's still growing
0:18  but not for the big players 90 of the 100 biggest cpg brands in the US lost share last
0:24  year and two-thirds decline in revenue why largely because of the death of the
0:29  industrial advertising complex these companies are great advertisers and
0:32  advertising has become the valarium steel that is losing its edge it's
0:37  getting dollar and dollar in addition the firms are largely dependent upon
0:40  distribution that is in structural decline specifically brick-and-mortar
0:44  grocery distribution and their investors have become addicted to their profits
0:49  similar to a heroin addict so they're likely to tell them to ya go innovate
0:53  but don't give out my profits bc is an entrepreneur smell blood in the water
0:57  these unbelievably rich margins and there's now dozens of startups armed
1:02  with cheap capital and no legacy reflex reaction toward broadcast media or
1:06  traditional channels so two very different reactions PNG is aggressively
1:11  invested in there too let's shave club
1:13  however unilever is taking a different tack and going for the chin and ass the
1:17  baby ass for some sort of analogy and I just can't figure it out with
1:21  acquisitions that directly take on the core of PNG's business specifically
1:25  diapers and razors so on friday was leaked the unilever was in talks with
1:30  the honest company to acquire them for a billion dollars fast on the heels of
1:34  their billion dollar acquisition of dollars shave club by the way it was
1:37  probably leaked by Unilever who wanted to see if the financial markets threw up
1:40  on it before they proceeded both startups are masters of the medium and
1:44  catalyze more traffic and searches in the Cincinnati and London _____ and
1:48  more depth with social platforms and more aggressive with online advertising
1:53  granted it's easier to be innovative when your investors are rooting for you
1:57  to grow and spend more money versus unilever and PNG investors who are
2:01  rooting on them to grow as long as they stay profitable so some unsolicited
2:05  advice to the various parties here first off disclosure we work with both procter
2:10  & gamble and Unilever like them
2:12  with a lot and our backers of the same backers of the honest company's you're
2:15  about to see me kiss everybody's ass every day that goes on the price is
2:20  going to get better
2:21  there is no other acquire the honest company threatened to go public that is
2:25  never going to happen the public markets have become more discerning in the
2:28  private markets let's flip back to the honest company another big piece of
2:31  advice to you sell you are being valued at three to four times revenue in an
2:36  infinite multiple on your even you are cpg company and you are never going to
2:42  get this price again in my view . advice for Procter & Gamble specifically the
2:46  folks at Gillette I think this warrants an adult conversation that if you don't
2:49  invest $MONEY to $MONEY billion dollars plus in your own subscription effort
2:53  specifically Gillette Shave Club you are going to lose share so how does this all
2:57  play out your diapers and your razors are about to become a lot less expensive
3:02  jessica alba and exact set both firms that get this stuff about to get a lot
3:07  richer and tens of thousands of people who manufacture and market razors and
3:12  diapers are going to make less money why the future involves higher stock prices
3:17  more billionaires but fewer middle-class households both firms will come under
3:22  pressure to reduce costs specifically people with technology however the
3:28  upside razors and diapers whenever and wherever you need them
3:33  yay
3:35  mmm


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Dating Apps, Winners, Losers, Traditional Advertising No Longer Works

Goliaths vs. Innovators

Video above: Scott Galloway, NYU Stern Marketing Professor. Video published July 28, 2016, by L2inc.com.

• Loser: Established CPG [ConsumerPackaged Goods] companies. Brands like L'Oréal Paris and Gillette are rapidly losing share to smaller, more agile rivals skilled at maximizing search visibility.
• Loser: Specialty Retail brands who email too much. Retailers sent 15% more emails in Q1 2016 than during the holiday season, but the resulting open rates proved that sometimes less is more.
• Winner or loser? Parents now spend less on food, transportation, and clothing than they did fifty years ago. However, childcare and education costs have soared.
• Who's winning in dating apps? Match Group, which owns 64% of the app ecosystem, including OKCupid and Tinder. 

Transcript:

A loser: established CPG [consumer-packaged goods] brands. 90 of the 100 largest CPG brands in the US lost share in the past year and two-thirds registered sales declines. The reason? Traditional advertising no longer works. Who's winning? Smaller brands with agile product innovation that digital - specifically search - rewards.

Two examples: NYX, who outperforms L'Oréal Paris 3 times in organic search visibility despite only bidding on 129 terms, versus 60,000 terms for L'Oréal Paris or Harry's, who in 5 short months jumped from number 9 in organic search visibility to number 3 as Gillette fell to second and Amazon secured the top spot.

So what's going on here? In sum, the diligence vehicles of Amazon reviews and Google search make it easier to connect you and the right product without having to default to the safety of a brand.

A loser: Specialty Retail brands who email too much. If your inbox feels overwhelmed, that's because it is. Retailers sent 15% more emails in Q1 2016 than during the overwhelming holiday season. But more isn't always better. With each additional email campaign, open rates declined by 15 basis points. Asking consumers explicitly and implicitly for additional information - such as you can customize the content and the email - is a winning strategy.

Everyone knows raising a child is expensive, but the complexion of that cost has changed dramatically in the past 50 years. I've told both my sons they need to start pulling their weight. Lorde wrote a Grammy-nominated song when she was 13. My kid at nine still lets the bath overflow - even when he's in it. Parents are spending less on food, transportation, and clothing but childcare and education costs have surged, accounting for a fifth of parental expenses - a big change from 1960, when they were just 2%.

The most affordable place in the US to raise a child? Morristown, Tennessee, where a family of 4 can meet their basic needs on $50,000 a year. That's half the required income necessary to raise a family in New York or Washington, DC.

Dating apps: winners or losers? By the way, my nickname around here is Swipe Left. It depends which one you're on and what you're looking for. Let''s look at some of the data.

• Tinder is the most popular and Happn has the most daily engagement.
• Christian Mingle has the highest proportion of women.
• Grindr has the lowest churn rate and eHarmony has the highest.

But who really wins? Match Group, which owns 64% of the dating app ecosystem.

I can save you some money. This is literally a fail-safe way to approach women. You walk up. Scott. Scorpio. Never fails.


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