With the launch of soap.com, the founders of diapers.com are hoping to take their low-margin, bulky-item online success formula to "everyday essentials."
Just as diapers.com has succeeded in selling diapers, baby wipes and formula to time-starved mothers, soap.com, to be launched in early July, is aimed at bringing budget prices and overnight, straight-to-your-door delivery to everything from paper towels and laundry detergent to toothpaste, vitamins, makeup, and shampoo.
"These are products you bought 1,000 times before and you don't need to see or touch them," said Vinit Bharara, chief operating officer of Quidsi, the parent of diapers.com and now soap.com. "You're buying them again and again. Shopping for them is a chore. At the end our goal is simple: Make your life a little bit easier."
Jodi Allen, vice president, North America Baby Care, P&G, sees soap.com as a natural extension of diapers.com's aim of "delighting mom." Having a baby is "when her consumable needs grow" and begins her adventures in bulk buying. The mother regularly winds up stressfully hunting down such staples while having little time in the shopping trip for true necessities, such as food for the family.
"We talk to moms all the time and they talk about shopping with their baby as a time bomb ready to take off and this really relieves all that," said Ms. Allen at the event.
Like diapers.com, soap.com is expected to benefit from
similar competitive advantages:
- Low prices: Prices are said to be 20 percent to 25 percent cheaper than the local drug store along with free shipping for orders of $50 or more.
- Broad selection: The website will launch with about 25,000 products and 900 brands across every health, beauty, personal care and household category. The average offline drugstore has 10,000 items. Soap.com will offer more than 40,000 products by the end of 2010 and 100,000 by the end of 2011.
- Speedy delivery: Promises of delivery within two days. At diapers.com, 70 percent of the country receives orders placed by 6 p.m. the next day.
- Warehouse technologies: Soap.com will use the same warehouses and facilities that diapers.com uses, and the same back-end inventory, logistics, and shipping software. Its robot-driven warehouse technologies are said to be the key the diapers.com's success.
- Service: Soap.com will also leverage the same customer service that ranked diapers.com as #2 out of 150 companies for customer service quality.
- Features: Soaps.com will show shoppers a personalized homepage with
products similar to those they have purchased before, and a savings center,
like a daily circular, that shoppers can filter by category. For items that
require closer inspection, like lipstick, zooming and color comparison are
available.
The execs recounted the success of diapers.com as the world's fastest growing internet retailer, going from $89 million in 2008 to $182 million in 2009 and projected to reach $300 million by 2010. While execs said the overall baby care market is $2 billion online and $40 billion overall, the market size for "everyday essentials" is estimated at $8 billion online and $125 billion overall.
"Now, we want to take that same model and apply it to a much bigger arena," said Quidsi CEO Marc Lore.
Discussion Questions: What do you think of the online opportunity for everyday household products? What do you think of applying the diapers.com formula to soap.com?