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Tuesday, June 23, 2009

Go Ask Alice

The consumer packaged goods industry is a nightmare right now. Stores have their own brands. They compete with major brands for shelf space. It's a losing battle with ever-shrinking margins. Consumers have busy lives and shrinking wallets. They need help managing sales, coupons and special offers, right? I mean, who can keep it all straight. Alice says she can.


A new website aspires to help manage your household basics is called Alice. It’s the work of serial entrepreneurs Brian Wiegand and Mark McGuire. As the site explains: “You tell Alice what you buy — choosing from great deals on 1000’s of products — and we go to work. We organize all of your products, find coupons and deals for you, remind you when you might be running low, and help you order just the items you need so you can avoid the chore of household shopping. And all this convenience comes direct to your door with free shipping included.”

Here's how it works: the manufacturers set the prices and pay Alice for fulfillment, shipping and all the consumer behavior data the service can suck up, the better to target their marketing. “The CPG industry spends billions of dollars each year trying to influence consumer behavior through traditional advertising, and much of that spending is wasted,” said McGuire. “In contrast to this ‘spray and pray’ approach, Alice allows manufacturers to connect directly with consumers through targeted couponing, sampling and loyalty programs. The result is more accountability for the advertiser and more value for the end consumer.”

In a more mature online retailing landscape, Alice’s chances depend on several things. First, it needs a critical mass of top brands. Right now it has 6,000-item inventory. It has to hope its model, which requires a minimum purchase of six items, will support free shipping of low-margin goods. And it has to find enough of the right people. Those for whom shopping is painful and time consuming. Last week I swore off my local 1950's style grocery store for being both.

I've returned to shopping at my quaint little market. It's just up the street. It has a better butcher than Whole Foods and half the price. It's near the farmer's market so it's a convenient one-stop shop. But mainly, I feel like Norm from Cheers when I walk in the door. The bell tinkles. Everyone looks up and calls my name. I belong. It gives me my hyper-local community fix.

I think Alice is a swell idea. I just can't be sure which consumer will like it best. Busy Mom who get her "community fix" elsewhere? Stay-at-home Dad who'd rather not be seen in the grocery store at noon? Or is it the office manager who orders sundries for a mid-sized business? Whomever it turns out to be, it must be the consumer for whom maintaining a steady supply of staples is such a hassle it requires an online answer. Not me. You maybe?

photo of my local market courtesy of Jim Deane

1 comment:

Rebecca said...

Thanks so much for the write-up. We understand Alice won't be for everyone, but I appreciate you laying out several points - great article!

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