Dollar Shave Club Migrates from a Homegrown Platform and Cuts Tech Spend by 40%

An interview with Kyle Iwamoto, vice president of ecommerce at Dollar Shave Club by Matt Nelson, director of marketing at Shopify

We sat down with Kyle Iwamoto, vice president of ecommerce at Dollar Shave Club, to talk about Dollar Shave Club’s journey from a complex custom build to Shopify.

Kyle has worked in ecommerce for 12 years, having started as a buyer before moving to specialized roles in merchandising, customer experience, monetization, and member growth.

Now in his fifth year with Dollar Shave Club, Kyle oversees five crucial departments: paid media for customer acquisition, lifecycle marketing for retention and monetization, digital product for site features, site merchandising to boost conversion rates, and engineering to ensure it all runs.

He and his team focus on several KPIs, aiming to increase the average order value, enhance customer retention in the subscription model, encourage frequent shipments, retain customers, increase order value, and efficiently attract new customers with a positive lifetime value (LTV).

Since migrating from a complex homegrown platform to Shopify, Dollar Shave Club has:

The following content is based on our interview with Kyle, presented in his own words. It has been edited for clarity and length. To watch the full video interview, click here.

About Dollar Shave Club: A disruptor in the DTC subscription space

Our story is pretty well-known. Our founders Mark Levine and Michael Dubin started Dollar Shave Club in 2011 as a disruptor in the direct-to-consumer subscription space.

Before Dollar Shave Club, buying razors meant going to a drugstore, Walmart, or Target and paying high prices for items locked behind plexiglass cases. Dollar Shave Club changed the game by delivering high-quality razors directly to your doorstep at a fair price.

Thirteen years ago, there wasn't an existing digital platform to enable this service, so we had to build it from scratch. We were a tech brand as much as a consumer brand.

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The challenge: Dollar Shave Club spent 40% of their tech resource maintaining their platform

We initially built our own custom platform, which gave us great flexibility and customization in shaping our business model. But over time, other tech solutions like Shopify emerged, offering features and tools we could take advantage of.

To keep fulfilling our mission of delivering high-quality products at fair prices through a convenient delivery system, we had to rethink our approach.

With a focus on profitability and scale, we began exploring these newly available solutions, considering how we could integrate them into our operations.

The need to more intentionally invest company resources

A little-known fact is that we spent about 40% of our total tech resources just on maintaining our homegrown platform.

With that 40%, we thought to ourselves, what else could we unlock? What else could we do with that 40% instead of simply maintaining our platform? What else could we build? What else could we leverage? How could we drive more results in those primary KPIs?

Sometimes, there’s a misconception that building something in-house means it’s free in the long run. But developing it diverts resources from other important projects, and maintaining it isn't free either, as it requires limited company resources.

While you’re scaling a business, it’s essential to focus on activities that truly differentiate the brand and delight customers. So when we talked about that famous 40%, we had to think carefully about the best way to use our resources.

Internally, we wanted to better plan our roadmaps to ensure that our resources were used as efficiently as possible.

Keeping the team on board with migration

Some team members were eager for change years ago, while others found it challenging to embrace the idea of transitioning. We had a range of reactions––from those enthusiastic about adopting something new to those who felt a strong emotional attachment to our original homegrown platform, and many others with feelings somewhere in-between.

You can probably imagine that many business partners and individuals who were focused on achieving our KPIs were eager for a new solution. They wanted more speed, the ability to make quick changes, and enhanced capabilities.

But it was difficult for some team members to let go of a project they had invested so much in and that had their personal mark. To reconcile these differing perspectives, it was crucial for us to establish a clear and refreshed North Star.

Navigating change and prioritizing professional growth

For those who were initially hesitant, we focused on two main approaches. First, we addressed their concerns by acknowledging the significant, innovative work they had contributed.

At the same time, we emphasized the importance of working with a platform that is widely recognized across the industry. Having Shopify on your resume and having experience in the platform is really important for professional and career growth.

If we weren’t spending this 40% on just basic maintenance, what more could we achieve? We highlighted the potential for creating impactful projects that could drive significant business results rather than just keeping the lights on.

The solution: Dollar Shave Club future-proofed their business with Shopify

To be frank, we evaluated quite a few platforms. We prioritized the need to future-proof our choice to ensure it could support our long-term goals. Through that process, we selected Shopify along with third-party partners including Iamota.

Partnering with a platform dedicated to innovation

With Shopify, we understood there was a significant investment in driving ongoing development and enhancing the app ecosystem. We recognized that our business would grow and evolve over time. Although it’s impossible to predict the future with certainty, especially 5 to 10 years ahead, we felt confident that Shopify’s ecosystem would be able to support our changing needs through changing market trends, industry shifts, and evolving consumer behaviors.

Managing a subscriptions business

Specifically, within subscriptions, the consumer can feel hesitant because they worry they might forget that an item is coming. To make sure that you alleviate those concerns, giving the consumer a high level of control is critical. This was a huge priority for us when evaluating platforms.

Previously, our homegrown platform captured specific customer preferences, such as when they wanted their orders delivered, what items they wanted included, and if they wished to delay their orders.

Today we’re managing subscriptions through a third-party app, Ordergroove, that we have used through the Shopify app store, and it’s working very well for us. We are at parity with where we were previously on our homegrown platform. That’s important to us because the homegrown platform subscription functionality was extremely custom.

As we look to the future, we'll build more customer-centric features to help them control their subscription further.

The results: Dollar Shave Club’s early success with Shopify

Oh my gosh, how much time do we have to talk about the benefits?

With an increase of 40% in time and throughput, we refocused on the four crucial areas of my team. Specifically, we looked at ways to enhance the experience for new customers by making it more personalized, thoughtful, and relevant.

Ease, speed, and increased morale

One big benefit is on the marketing side: the ease with which our teams can test and learn. One side is the rapid pace at which they can spin up tests and ultimately get to some great conclusions to guide their work plans going forward.

On the other side of that, our tech team is able to move more swiftly, which is not only great for their impact on the business, but also drives higher morale.

Seeing the results of your work come to life in a fraction of the time that it did before is really rewarding.

Operational agility and efficiency

How does that look in reality? This sounds kind of silly, but with Shopify, we’ve been able to drive and spin up numerous landing pages instantly. Unfortunately, we couldn’t previously do that on our homegrown platform.

What Shopify lets us do is spin up all these different experiences to rapidly test, iterate, and drive additional performance as far as acquisition is concerned.

Additional sales channels

The other side of that coin is driving more sales channels. In the US, we’ve been able to start to scope out what it would look like to run an eBay and Amazon business through Shopify’s out-of-the box functionality.

Engaging new audiences with Shop app

One of the things that surprised me the most about Shopify after launching is that we were immediately on Shop app. With over 100 million active users in the United States, Canada, and Mexico, we were able to get in front of a very broad audience literally overnight.

Not only were we able to unlock that very broad audience—over 100 million folks—but we were also able to start testing Shop Cash offers where we could set a specific budget for a specific AOV return and a specific ROI return to acquire new customers and introduce them to the brand.

Leaning on Shopify for maintenance

We have simplified quite a bit by going from a homegrown platform to a more out-of-the-box solution with Shopify.

Some of those benefits for us include less maintenance of our platform. We lean on the expertise that Shopify has put into their products, and then leverage them to drive business results. Where necessary, we download apps from the platform marketplace to drive more functionality for our consumers.

We’re leaning on the Shopify platform and on a lot of the work and maintenance that Shopify does to make sure that our customers and internal stakeholders use the platform without any issues.

Leaning on an out-of-the-box solution helps us reduce the amount of time fixing different things that we have manipulated and changed in the code. Another big benefit of this is we’re not accruing a massive tech debt.

App ecosystem

We’ve been on Shopify for less than a year and have already started to tap into Shopify apps and run several experiments.

We’ve been able to do a lot of trialing and testing, specifically to understand what a post-purchase experience should look like and how it impacts our business.

For example, we’re partnering with a third-party app called Disco for post-purchase upsell. We had it put onto our platform in just a matter of days. It was very simple to add and we’ve already seen a significant increase in post-purchase conversion—not only for our existing customers but also in acquiring net new ones as well.

Additionally, we launched Search & Discovery within weeks. It was easy peasy.

We’ve been able to leverage the ecosystem by not only testing and learning but also implementing and investing in those things driving additional AOV, retention, and shipments.

Dollar Shave Club and Shopify: Building for the future

Partnering with Shopify has been incredible so far. A significant aspect of this collaboration includes the onsite meetings where we plan our business strategies together. Having insight into upcoming features and aligning them with our main business objectives ensures we operate efficiently and achieve impactful business results.

As we look into the future, we’re exploring how we can better integrate AI and roll out new sales channels that help us meet customers where they are.

AI and machine learning

We’re excited to start incorporating AI and machine learning into many of the features we’re already working on.

It's easy for us to lean into the development work that Shopify does and learn a little bit more about how these innovative developments will impact the end consumer and our internal teams.

This approach helps us develop quicker, come to market faster, drive higher conversion, and provide more customer delight.

New sales channels

The second thing I’m really excited about is sales expansion in channels and markets. We’re thinking about how we can drive more penetration across markets we're not currently in.

And of those that we’re already in, how do we broaden the reach as far as who we can talk to in those spaces?

Dollar Shave Club is in the space of men’s grooming razors. We know, based on our research, that men are not spending hours and hours and hours researching their razor brand. They’re just not doing it.

So for us, it’s really important to be omnipresent, to not only be present on our own website, but to also be present across a wide variety of different channels.

Over the last three years, we’ve been widening our distribution to third-party retail, not only our own website. We are now available in Walmart, Target, Amazon, and drug and grocery stores across the United States.

Advice for other subscription companies

My first piece of advice for other subscription companies is to be honest. Be honest about where your business is and where you need to be in the next 5 to 10 years. Take that information and go out to market to understand whether or not you need to be on a homegrown platform or if there’s something better that exists out there in the world.

I think specifically for us as we were doing that evaluation, what gave us more confidence was the partnership that Shopify cultivated with Dollar Shave Club.

They partnered with us to develop our roadmaps, giving us visibility into what was being developed and letting us have influence over that roadmap to help us see from the ground floor.

Our partnership with Shopify is critical for our success, and we’re excited to see what the future holds.

Watch the entire interview

Watch the full video interview with Kyle Iwamoto, VP of ecommerce, for a closer look at the Dollar Shave Club journey.