Alice.com sets to directly connect CPG manufacturers with consumers

MIDDLETON, Wis. Alice.com on Tuesday launched its public beta of an online service that affords consumers a better way to buy household essentials online, the company stated.

The service combines always-free shipping and competitive pricing with a reorder queue that monitors customer usage of an item and sends a reminder to the consumer when the product needs replenishing. Like the Pro Merchant feature on Amazon.com, Alice.com never takes possession of manufacturer inventory. By contrast, Drugstore.com, another pureplay dotcom retailer, acts more like a traditional brick-and-mortar, buying, warehousing and shipping direct to consumers. On Alice.com, manufacturers sell directly to consumers in a format where there are no retail margin hurdles, slotting fees or in-store merchandising programs. Instead, manufacturers pay for "advertising," which includes targeted couponing, sampling and loyalty programs.

"The [consumer packaged goods] industry spends billions of dollars each year trying to influence consumer behavior through traditional advertising, and much of that spending is wasted," offered Mark McGuire, president and co-founder of Alice.com. "In contrast to this 'spray and pray' approach, Alice allows manufacturers to connect directly with consumers ... the result is more accountability for the advertiser and more value for the end consumer."

There’s certainly plenty of buzz building around e-commerce these days. According to the Census Bureau of the Department of Commerce, there were approximately $31.7 billion in online sales for first quarter 2009, up 0.7% from fourth quarter 2008; compared with traditional retail sales of $877.9 billion for the quarter, which were down 1.8%.

All of that suggests a robust online marketplace, where such retailers as Amazon.com and Walmart.com already have captured a significant market share of the e-commerce dollar. Some analysts have suggested Alice.com may find it challenging to attempt to navigate a cluttered online landscape.

The company's "no shipping fees" offer avoids one of the primary reasons consumers don't buy CPGs online -- it doesn't make sense to spend more on shipping than the product is worth. Also, today's online retail pricing exceeds brick-and-mortar pricing by between 20% and 40%, suggesting that Alice.com will be positioned as the online discounter.

And time could be an impediment to an online CPG purchase, McGuire said. The impetus for the sale of CPG items oftentimes is pantry replenishment, meaning the customer has run out of the product and will not wait a day for an online order to ship. To address this, Alice.com has implemented an auto-replenishment program. “The vast majority of consumers don’t buy their household essentials online, and we set out to change that at Alice by taking a completely fresh approach to the CPG industry,” acknowledged Brian Wiegand, CEO and co-founder of Alice.com. “By eliminating the traditional retail layer, we allowed the companies that produce these goods to connect directly with the people who use them. The result is a neutral platform for CPG manufacturers to work together as an industry and channel their resources in exciting new ways for the consumer.”

That platform may provide an additional online opportunity for new-to-mass-market suppliers to generate a buzz around their products beyond such traditional pureplay mass retailers as drugstore.com and Amazon.com, or such brick-and-click retailers as CVS.com or Walgreens.com. “We are excited to participate on the Alice.com platform, and be a part of an entirely new and innovative approach to buying household goods,” stated Saskia Foley, EVP marketing and sales at Radius Toothbrush. “With Alice.com, we’re able to have a more direct relationship with our customers, and give them a great new option to purchase our products at affordable prices shipped free to their door.”

The Alice.com beta Web site is launching with more than 6,000 unique products (as compared with some 40,000 fielded today by Drugstore.com, for example). The company plans a full consumer launch in the fall.