Will consumers habitually buy and replenish non-perishable food, household cleaning and HBA items online, en masse? That’s the question the founders of Alice.com asked themselves when thinking through their business model. I think the answer is definitely maybe.
It all comes down to assortment, convenience and price. Fulfill these three wishes and a segment of the population will happily work with Alice.com as their go-to source for non-perishables. I honestly can’t see my parents (mid to late 60s) using this service, nor my sister (married w/ 2 kids, but traditional bricks retail shopper) logging onto Alice to reorder some Tide laundry detergent.
But my household (and hundreds of thousands of households like mine) could be all over this. For example, just last weekend we ran out of diapers for our 6 month old. Late on Saturday night we placed an order for Pampers diapers and Pampers Sensitive wipes on Diapers.com. What a pleasant suprise to see the Diapers.com delivery box sitting on our doorstep first thing Monday morning as I left for work. Talk about convenience. And it’s tough to beat the price of diapers on Diapers.com. The assortment of products is good too. The service works well, is cost-effective and allows us to try new items when we want to.
But how can Alice.com support free shipping for relatively low ticket items? That’s where the CPG marketer value proposition comes into play. Reality is that CPGs like P&G aren’t banking on channels like Alice.com to drive big volume today. The real near-term power of this channel is to establish direct connections with consumers and, more importantly, drive a deeper level of shopper insight. Behind the scenes of Alice.com, I’d suspect, is a pretty sophisticated set of shopper behavior engines that mine deep, detailed consumer insights and reports. At scale, these insights could be pretty valuable to big CPG brands to better understand shopper behavior and propensity to buy through a new channel of distribution. For this insight, consumer products manufacturers may happily subsidize the “free shipping” offer that is so attractive on Alice.com
Should be interesting to see how this service does – both in terms of consumer adoption and CPG advertiser support!