Everyone Needs an Alice (Part II)

This is a follow-up to Part I on the same topic, which you can find here.

Earlier this month I had the opportunity to catch a live presentation by the founder and CEO of Alice.com, Brian Wiegand, at the Consumer Goods conference in Orlando.  This was a learning experience on many fronts, as my earlier views were based on partial information.

In a word, the best way to summarize Alice.com is PLATFORM.  What Wiegand and team have done is to offer CPG brands the tools and forum with which to sell direct to consumers.  Alice takes no ownership of the product, the data or the consumer.  They have built a nifty e-commerce platform that allows a brand, and really a community of brands, to easily merchandise themselves to a set of engaged shoppers.  Alice does take the burden of financial transaction processing, fulfillment, customer service and data management off the hands of the brands — a welcome proposition for most CPG companies so they can focus on building and marketing their goods.  Their fees are based on the services they provide, not how much volume they move.

This business model puts Alice in a unique position.  Unlike the first generation of selling consumer packaged goods direct to consumers (Webvan, Netgrocer, etc.), Alice can put their focus on three things: building the platform, ensuring excellent service, and working closely with the brands to mine the data.

So while my earlier analysis concluded that this channel may not move tonnage for many brands, it does offer a quick, easy and value-added way to reach a set of high value consumers…efficiently.  And since Alice isn’t directly taking a piece of each transaction, the full retail margin is passed directly to the brand helping to support Alice’s promise of free shipping.  But the real potential boon here for CPG brands are the valuable insights that can be gleaned by interacting with and marketing directly to consumers.   Alice intends to drive a lot of value with this part of the proposition, and rightfully so.