Listen to an in-depth interview with Marc Lore, CEO, and Vinit Bharara, COO of Diapers.com. Listen now....
Marc Lore and Vinit Bharara are not just the co-founders of Diapers.com, they're
dads. And, it's from the personal experience of too many late night trips to
the store to pick up diapers and other products that the two came up with the
idea for their parent-focused business.
"I thought, 'There's gotta be a better way'," Mr. Lore, CEO of the company, recently told RetailWire.
The company, which bills itself as "the largest online specialist offering baby care necessities in the United States," had its beta launch in 2005 and initially resold diapers and formula purchased from warehouse clubs because the company was not large enough for manufacturers to deal with it directly.
We "tried to make life more convenient for busy parents ... And that has been the theme since we started," said Mr. Lore. "We have been extremely focused on offering an outstanding customer service experience beginning with fast, free shipping, so we now reach about two-thirds of the country with overnight shipping and a 6:00 pm local cut off time. So if you order 5:59 on a particular day, two-thirds of the country will get it overnight and the rest will get it in two days."
While service is paramount, the company understands price has a critical role in the value proposition and has invested heavily in creating an efficient supply chain to keep its costs, and those of its shoppers, down.
COO Bharara said, "Our mindset was to focus on the back end of our business and logistics of our business -- whether it be in the programs for our supply chain management, whether it be the robots that we have in the warehouse, and whether it just be in our entire philosophy of focusing on being the low cost distributor so that nobody can deliver this stuff cheaper than us. And so we have three warehouses positioned perfectly in the country to get product as fast to customers as possible. That also gives us the lowest shipping rate because we are closer to them. We have arrangements with UPS, FedEx and a bunch of different regional carriers, again not only to get product faster to the customer, but at the same time it actually winds up being less expensive."
Diapers.com recently opened a registry store location in Upper Montclair,
NJ. The cofounders saw it as a logical step in the company's development.
"It was sort of a novel concept, no one had opened up, at least as we have seen, a specialty registry store, that is a store whose sole focus was on registry," said Mr. Bharara. "We thought that could be an interesting thing to test. So most of this really was a function of testing, just trying to understand customers' needs and wants and also testing the concept of a specialty registry store and see if we could potentially roll that out in other markets, if this was or is successful."
Customer service is at the top of Diapers.com's to-do list and employees from the top on down take calls in the service center so they never lose touch.
"It's part of our DNA, part of who we are," said Mr. Lore. "It's definitely empowering to know that you have the ability to take care of the customer at any cost. We don't have a budget, we don't say, there's no manual that says what you can and can't do. If there's a problem, you basically can take care of it at any cost, and customer service reps have on occasion spent hundreds of dollars to take care of a customer after their first $50 order. It doesn't matter. In some ways, the easier the policy, the better the outcome, right?"
Discussion Questions: What is your assessment of the opportunities and challenges facing Diapers.com? Do you see the company's physical registry store test as a concept it can build on? Do you expect to see many other e-tailers move to some sort of brick and mortar presence in the future?