Alice.com: Is it Much More Than the Mad Hatter?

Articles
January 18, 2010

Alice.com: Is it Much More Than the Mad Hatter?

As you know, Alice.com is an e-commerce platform that is designed to give consumers higher than average savings, and CPG brands more control over their destiny.

As you know, Alice.com is an e-commerce platform that is designed to give consumers higher than average savings, and CPG brands more control over their destiny.

In an era of retailers pushing their own store brands and pushing CPG SKUs out the door, Alice.com is attempting to offer CPG a new way to sell their products directly to consumers bypassing the traditional retailer, and offer a suite of marketing tools, including sampling to help brands launch new products and gain new insights about consumers and their behaviors. Their financial model is quite different than other e-retailers, Alice.com’s plan is to make their profit only in selling these marketing services to the brands, they do not make any mark up or commissions on the products sold. In fact, consumers aren’t charged for shipping – the brands and Alice.com split the cost.

The site’s mantra, “Never run out of toilet paper” is on target. What we learned from WebVan, ShopLink, HomeRun, Streamline, Kozmo and the dozens of other sites that once challenged the way we traditionally shop for our food, is that their demise was based on a simple miscalculation: not fully understanding the consumer. Sure, home delivery satisfies one consumer need, that of convenience – but it ignored a consumer fundamental: consumers enjoy shopping for some foods. We like picking out produce and meats and baked goods and even prepared foods. We hate buying toilet paper, paper towels, laundry detergent and similar goods which are highly branded, non-food and often heavy or bulky. The old model depended on selling the higher profit items that people have fun selecting for themselves – not so at Alice.com.

The idea of an automatic replenishment system that insures I never run out of toilet paper is a good one. Questions: can Alice.com make enough profit on their marketing services and if so, will brands force other e-retailers (and perhaps even traditional retailers) to forgo their markups and create a new revenue source?

And by the way, just for the record, the name Alice doesn’t come from Alice in Wonderland…the company is named after the Brady Bunch’s always perky maid, Alice.