Cover Story: Making a Name for Itself

With Procter & Gamble's announcement in late May that it was launching an e-commerce site, the consumer packaged goods (CPG) industry experienced a seismic shift. The days of manufacturers relying solely on retailers to peddle their goods — at marked-up prices, to boot — were gone, another casualty of the economic downturn. Selling direct to consumers is now a viable option as CPG manufacturers seek out new revenue streams.

Helping to make that option viable is Alice.com. Launched on June 23, 2009, as an online marketplace not unlike eBay, Alice.com enables CPG manufacturers to sell their household essentials — think toothpaste, laundry detergent, trash bags, toilet paper, etc. — direct to consumers. By making thousands of products typically not found online available for purchase, Alice.com has tapped into an underserved market, albeit surprisingly so to the company's founders.

"If you look at consumer packaged goods as a category, if you're starting from scratch with e-commerce, you'd think it would be one of the first things to come online," says Mark McGuire, Alice.com's co-founder and president. "It's a boring purchase, chore-oriented, very repeatable. It's a low-involvement sale; people don't typically need to inspect their boxes of Tide before they put them in their carts. It has a lot of those things that the convenience and ease of use of the internet really feel perfect for."

In order to remain competitive with big-box retailers (e.g., Wal-Mart, Target) and membership clubs (e.g., Sam's Club, Costco) that sell commodity goods, Alice.com offers competitive pricing and free shipping on all orders. This paired with the ability for consumers to receive these products on their doorsteps without a trip to the store has proven a powerful combination.

"CPG manufacturers have good flexibility in their pricing," says George Hague, principal of HAGUEdirect, a direct marketing agency. "They're accustomed to a model where they sell wholesale to distributors. When these same manufacturers go direct to consumers, they have more flexibility in their margins to offer free shipping for standard ground delivery."

Dedication to Customer Service
Unfamiliar with dealing directly with end buyers of their products, CPG manufacturers had a lot to learn when it came to customer service. To help ease that transition, Alice.com has placed a premium on customer support throughout its site. Customers can reach Alice.com's customer service team via phone, live chat or email. The company also has an employee devoted to monitoring its Facebook page and Twitter account to interact with consumers discussing the brand online.

CPG manufacturers need assurance from Alice.com that consumer buying experiences will be as enjoyable as possible — not only via its site, but also when dealing with customer service. In fact, many of the CPG manufacturers partnering with Alice.com have covertly tested the site's customer service to see for themselves.

"With the success of Zappos and some others that have been very high profile, it's becoming more standard as a practice that you have to go that extra mile for the consumer," McGuire said. "The incremental dollars we've spent for chat … to have consumers reach a real person that has the authority and ability to make things right, the dividends that pays far outweigh 
the costs."

Partnership Bolsters Standing
By partnering with online retailer Buy.com in late June, Alice.com significantly upgraded its exposure to online shoppers. Buy.com's "Household Essentials" store will be hosted on Alice.com's platform, bringing millions of new customers to Alice.com along with it. With the responsibility for acquiring new customers falling to both Alice.com and its CPG manufacturers' partners, the Buy.com union represents a significant influx of buyers.

"The partnership was a win-win for both us and the manufacturers to drive more sales and exposure for their listings," said McGuire of the Buy.com deal.

Alice.com is continuing to look at CPG partnerships, marketing partnerships and other strategic alliances going forward to extend the reach and awareness of its site. With that goal in mind, the company created an iPhone app earlier this year. McGuire notes that a substantial percentage of the company's sales each day come from the iPhone app.

Akin to having a shopping list in your pocket, Alice.com's mobile site has all the functionality of Alice.com. The brand has also implemented scanning technology that lets consumers scan the barcode of a product with their mobile phones. If Alice.com offers that product, it will automatically come up for the consumer to purchase or to mark for a future order. "It's a great way to incorporate the power of mobile into the ease of use of the Alice.com service," notes McGuire.

Dual Purpose for Social Media Efforts
In addition to using Facebook and Twitter as customer service tools to troubleshoot and engage customers who may be unsatisfied, Alice.com views social media as a customer acquisition and selling opportunity as well. The brand credits its rapid growth — it counted millions of unique monthly visitors to its website in the first months after its launch — in large part to its social media efforts.

Rather than spend its marketing budget buying ads, Alice.com used social media to cultivate relationships with mom bloggers (mothers have proven to be Alice.com's target demographic), deal bloggers and e-commerce bloggers, who then spread the value of Alice's service to their own followers. Realizing the power and influence blogs can have, Alice.com created two of its own: a community blog and a company blog, both written by Alice.com employees (although guest bloggers also contribute to the community blog). The community blog offers home management tips and advice, how-to posts, features on new products, contests, giveaways, coupons and more. The company blog covers official company news as well as the greater CPG e-commerce marketplace.

"As part of our social media assets, the community blog is a way for us to cultivate the community that comes around Alice," says McGuire. "We're lucky to have a very engaged group of readers. For example, we did a laundry giveaway recently and we had over 3,000 people comment. There's a very vibrant, active community that's an extension of our outreach and cultivation with mom bloggers and others in our target market."

Why Alice?
With the business model formulated and financing in place, McGuire and company co-founder/CEO Brian Weigand needed one final piece of the puzzle: a brand name. This proved more difficult than they expected. For web-only companies, a lot of brand names are driven by the domain name system and the speculation market. It's hard anymore to find a domain name — a useful one, at least — that hasn't already been registered in the dot-com extension.

As an internet start-up company, choosing a brand name that proved memorable to consumers was critical to Weigand and McGuire. They sought a moniker that consumers could remember and visit a week or month after first thinking about it. When the pair found the Alice dot-com address available, they acted. In addition to being memorable, there was another factor working in Alice's favor.

"We were essentially creating a new relationship via a service, and we wanted it to feel very personal and service oriented," recalls McGuire. "'Did Alice come yet?' 'Add that to the next Alice order.' Not a caricature, but a very service-oriented, personal relationship consumers have with this brand."