CHICAGO (Reuters) - A new website wants consumers to browse virtual shelves of everything from diapers to shampoo, a move that if successful would mark a major shift in the way most Americans buy household products.
The sector faces hurdles heading online since products such as toilet paper are ones people often need in a hurry and many items are bulky or heavy, which means high shipping costs for items with relatively low price tags.
Also, consumers buy items from several different manufacturers, so selling directly from company websites would be inconvenient.
But founders Brian Wiegand and Mark McGuire said their site, Alice.com, could help manufacturers maintain their brand identity as they battle to retain thrifty consumers who are buying more store-branded goods from retailers such as Target Corp and Wal-Mart Stores Inc.
The categories manufacturers are in, the value they can offer in this economy and how they are already selling their products at stores are issues companies are considering when thinking about whether to sell through more online channels, said Herb Walter, Consumer Packaged-Goods and Retail Advisory Partner of PricewaterhouseCoopers’ Retail & Consumer practice.
“It is a viable option, it is one that is being experimented with,” said Walter. “At least for the foreseeable future it’s got to have a value label next to it.”
With Alice.com, manufacturers get to set their own prices and receive all of that revenue. The site makes money by giving the companies spending data, advertising space and distributing samples for them to targeted customers.
Manufacturers pay the site to handle logistics including free shipping on all orders, which must have at least six items.
Wiegand said Alice.com aims to capture 250,000 customers in the first year.
This is the fourth partnership for Wiegand and McGuire, who most recently sold Jellyfish.com to Microsoft Corp in 2007. Jellyfish.com was rebranded as Bing cashback, a service consumers can use to save money when they shop online.
The duo compared Alice.com to Netflix Inc since the new site will remind shoppers to reorder, much like Netflix sends the next DVD in a customer’s queue. And working off the popularity of networking sites such as Facebook and MySpace, customers can review products and tell others what they buy.
GO ASK ALICE
The name is in one way a nod to the housekeeper Alice on the 1970s U.S. hit television show “The Brady Bunch,” and had the sound of a consumer-oriented brand, the founders said.
Alice.com will compete with Drugstore.com, Diapers.com, Amazon.com Inc and others already selling many of the items it stocks. The site is launching with more than 6,000 products such as shampoo, soap, coffee and pet food. Alice.com aims to be different by acting as a platform for manufacturers to communicate directly with consumers.
Alice.com has commitments from five of the top 10 consumer products companies but would not disclose whether specific players such as Procter & Gamble Co and Unilever have signed up.
“As long as most of the major manufacturers are going to get behind something like this, then we hope it’s going to be a viable opportunity to sell more,” said Mark McGreevy, director of national accounts for Durex Consumer Products.
Durex condoms are available on the site and through other online retailers, but like most other manufacturers, Durex does not sell directly to consumers.
Test users said they were pleased with Alice.com’s approach, which allows shoppers to compare prices quickly.
“They’re definitely tapping into something that I think could work but certainly it’s going to take folks to change their way about how they buy products,” said Kristen Chase, an Atlanta-based co-founder of CoolMomPicks.com.
Chase and Erin Doland, editor-in-chief of Unclutterer.com, said they plan to use the service again.
“Alice was better-priced then my grocery store on almost all of the products,” said Doland, who lives in the Washington, D.C. area.
For now, Alice.com has only one distribution center, in Indiana, and does not send products to Alaska or Hawaii.
Reporting by Jessica Wohl, editing by Matthew Lewis
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