Wall Street Journal writers Rob Copeland and Sharon Terlep reported earlier this month that, “Colgate-Palmolive Co. is turning to an online startup to help it sell products like toothpaste through a home-subscription service, the latest experiment by a big household-products maker to cut out traditional retailers as sales shift online.
“Colgate, which has been selling its namesake product since 1873, is close to a deal to acquire a minority stake in Hubble, people familiar with the matter say. The two-year-old New York company currently sells contact lenses in brightly colored boxes online.
“As part of the deal, Hubble would develop new online subscription avenues for some of Colgate’s products, the people said. The first one, focused on oral care including teeth whitening, is expected to start as soon as this year, while others in areas like pet food remain under consideration, the people said.”
The Journal writers noted that, “The better-late-than-never move brings Colgate, maker of products from Tom’s toothpaste to SoftSoap, into an arena vexing the biggest makers of household goods.
“Subscription-service startups have yet to deliver profits for the most part, but have succeeded in wooing shoppers en masse from industry stalwarts, forcing them to respond. In toothpaste alone, there are several upstarts like Quip and Goby selling monthly subscriptions for toothbrushes or paste.
“Defections to razor subscription services Dollar Shave Club and Harry’s forced Procter & Gamble Co.’s Gillette to slash prices and shift focus toward new products. P&G executives are now exploring a range of alternatives to the traditional retailer model.”
The article added that, “Online sellers like Hubble eschew traditional advertising, instead pouring money into social-media marketing to sign up customers for recurring subscriptions. The model has become an alluring workaround for manufacturers struggling in the age of e-commerce, cutting out retailers.
“Under pressure from Amazon.com Inc., big retailers like Walmart Inc.have been pressuring consumer-product companies to lower prices and speed up delivery of products. Despite these tensions, the vast majority of household products are still sold through traditional brick-and-mortar stores.”
