Why Old Spice Guy Can Turn Sales for P&G Around
Take one part Twitter and a hefty dose of ads features a fine man with chiseled pecs and a six pack â€" showcased by a strategic towel â€" shake liberally and let the party, and the sales, begin. At least that's what parent company Procter & Gamble (PG) was hoping as it ramped up the viral volume to give Old Spice, preferred cologne of (older) dads and granddads, a makeover.
However, appealing to Gen Y and actually getting them to buy takes time, and it's not as quick as the 140-character-tweet speed. At all.
Despite the fact that Old Spice Man drew Twitter rapid-fire replies from the likes of celebrities such as Ashton Kutcher and Alyssa Milano (who filmed her own video clad in a towel) my BNET colleague Jim Edwards points out that sales of Old Spice's Red Zone After Hours Body Wash aren't in concert with the sudden rise in web chatter. In fact, for the year ending June 13, sales of the brand have dropped 7 percent. To be fair, this does not represent sales at Walmart (WMT), which could knock that loss down a few notches. Nor does it take into account that Mr. Spice has only been around since February.
No matter. Though P&G faces an uphill climb reinventing the brand for teens and 20-somethings who don't have the old man associations, it can be done -- and to greater effect than some other revivals of similar vintage.
When Coty bought Jovan (of Musk Oil fame), it tweaked the packaging but left well enough alone. The company eventually introduced several varieties of Musk for both men and women, but kept the price point in line with the buyers' threshold. It is after all, available in Walgreens (WAG) and CVS, like Old Spice. Yet unlike Old Spice Man, Jovan's overtly sexy messaging from the 70s remains ensconced in the past Coty's revenue continues to rise, aided in part by its diverse portfolio. The company is estimated to bring in about $5 billion this year with roughly 65 percent of that thanks to its fragrance business.
Likewise, Estee Lauder (EL) staged a revival of Youth Dew (originally introduced in 1953) in collaboration with that sexy sartorialist Tom Ford and quickly sold out of the initial launch.
If P&G wants to make Old Spice into a winner, it simply needs to stay the course. Going the social media route puts the brand in contention with teen fave Axe from Unilever (UN). Its parent company's touting Axe as the world's most popular male grooming brand and has developed a hefty presence on YouTube with over 4 million viewers -- since 2005. Old Spice Man's racked up over 4 million views in under 24 hours, and counting. That smells like success is just around the corner.
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