Listen to a fascinating, in-depth interview with Brian Wiegand, CEO at Alice.com. See the RetailWire Podcast below...
Fifty-six
percent of respondents to a RetailWire poll in June 2009 said
Alice.com, a new website that enabled manufacturers to sell grocery non-foods
staples directly to consumers, was somewhat or very likely to succeed. Forty-one
percent didn't like the new site's chances at the time.
Moving to the present, Alice.com CEO Brian Wiegand remains positive on the company's business for a variety of reasons including its unusual business model and validation from others rushing into the same product category space on the retail side.
Mr. Wiegand said Alice.com is right for manufacturers because it fills a variety of needs. Most importantly is the desire to have a direct connection with customers. Many consumer products manufacturers, he told RetailWire, are starting to look at retailers "as a channel and not necessarily as a customer."
Manufacturers are using a variety of means to connect with end users, according to Mr. Wiegand, and Alice.com provides "a set of services in a platform" to help them deepen the relationship based on individual company or brand objectives. "We took more of a platform approach, of helping the manufacturers engage in whatever type of direct consumer effort. Some have sales goals, some have database building goals, some have brand building ... you know everyone is a little bit different."
Mr. Wiegand credited Procter & Gamble with influencing others to more actively engage consumers and drive direct sales. He said fewer companies today are holding back over concerns related to relationships with retailers. He pointed to the number of manufacturers that have jumped on the Internet Retail 500 list in recent years.
"You see Nike, Apple, Dell, Cuisinart, Mattel, there's just countless numbers of companies now that are offering a direct consumer offering. So that trend is happening all over the place and it's natural in market conditions to create efficiencies in driving value to your end consumer," he told RetailWire.
While upbeat on Alice.com's prospects, Mr. Wiegand said it continues to identify new opportunities to drive business. One is the Christmas holiday selling season.
"We haven't capitalized. I saw drugstore [.com] announced their biggest day ever on Cyber Monday. ... They expanded to include a number of gifts and toys and other things. ... Our bigger months are January and February, just from looking at last year's numbers. This year, we tried a merchandising holiday promotion and it's actually worked really well. I think there is a lot of potential this time of year to do some creative things and I give drugstore [.com] a lot of credit. There's so much more that we really could do working with the brands. Because everything we do, is really driven by the brands. The brands tell us what to do, what they want to do and they really drive the merchandising on Alice."
The recent acquisition of Quidsi, operator of Diapers.com and Soap.com, by Amazon has brought an interesting new wrinkle to the household staples space online.
"First and foremost it's a very exciting development because it's a giant validation of exactly the market that we're in," said Mr. Wiegand. "Any acquisition of a magnitude of that size I think generates a lot of energy and attention. There were a number of people that truly thought this category would never be online and that it would never work online. So now I think some of those thoughts are in the rear view mirror and this segment is vibrant and growing. ... And then, you know, anytime you can combine two competitors into one is always a good thing as well."
As to Alice.com's future in light of the Amazon deal for Quidsi, Mr. Wiegand said, "Well with my background selling my last company to Microsoft and selling two companies before that ... when I enter a new venture, the entire goal is liquidity and that's for shareholders and myself and founders and so ... there's nothing imminent on the horizon for any announcement that I have...but it is a hotbed of interest and again, that acquisition does stir up a lot of energy and you never know what might happen."
Discussion Questions: What do you think about the online sales opportunity for non-food staples such as laundry detergent, household cleansers, etc? Is Alice.com with its unique business model positioned to succeed against the growing competition in the space?