$350 mln. in 6 Months — The Cost of the 2019 Gillette Advertising Fiasco?

Necessary Caveats

As with any other analysis based on observational data and not on data from a randomized controlled experiment, I need to preface the rest of the article by saying that no matter what the numbers show, the causes for any changes (or lack thereof) is likely not any singular event. There are most certainly countless factors influencing the change in market share and net sales, each with a different weight and direction of effect. Some of these are mentioned in the report, others are not, yet countless others are not even measured by anyone. In short — correlation does not necessitate causation.

Gillette’s Market Share Plummets

The blades and razors category, of which Gillette is a primary component plummets in market share to its lowest point since the company was acquired by P&G in 2005:

Grooming Net Sales Take a Hit

Net sales for the grooming segment of P&G fell from $6,551 mln. in fiscal 2018 to $6,199 mln. in fiscal 2019. That is a decline of 352 million US dollars. That’s a relative year over year decline of 6.5%. Given that the ad only happened mid-FY2019, it can be speculated that if the trend remains the results in FY2020 might be even worse.

Did the Toxic Masculinity Blunder Cost Gillette US$350 in Sales in Just 6 Months?

And did it cause them to lose nearly 8% of their relative market share (5 percent points of market share) in the blades and razors market over the same period? As already mentioned, it is near-impossible to say for sure with observational data alone, given the multitude of known and unknown factors influencing these numbers in both directions. One might say that it would be unfair to attribute the whole of these losses to the ad fiasco as it could have very well been the foreign exchange rates and other factors which contributed to most of it. However, one could also say that perhaps after seeing the early fallout of the ad campaign Gillette dialed up on their attempts to recover and thus the average impact we see is better than the actual.

Update 2020:

The 2020 P&G fiscal year report has been published now. In it we see that the market share remains depressed versus the pre-ad fiasco levels and is still at just above 60%. We also read that in 2020 fiscal year “Grooming net sales decreased single digits” for a second year in a row. More specifically, net sales are down 2%, and net earnings are down 13%, accompanied by a 1% decrease in volume. While some of these continuing declines might be attributable to the destructive ad campaign, it is probably a far reach to attribute the drop to it. However, if that is the case, and not accounting for counterbalancing acts, that would increase the losses suffered to around a billion US dollars.

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Georgi Georgiev

Georgi Georgiev

Applied statistician and optimizer by calling. Author of “Statistical Methods in Online A/B Testing”. Founder of Analytics-Toolkit.com and GIGAcalculator.com.