By Dimitry Voronov
For as long as people can remember, traditional retail stores have connected consumers with manufacturers. However, if this hierarchy was intact today, perhaps Brian Wiegand, co-founder and CEO of Alice.com, would not have had a reason to create a web-based business which, in its first six months, has grown faster than Netflix or Amazon.
Wiegand spoke March 23 at the Wisconsin Innovation Network’s Madison chapter about what makes Alice.com unique. He stressed that directly matching up manufacturers with consumers can change how Americans approach their everyday shopping.
“I have always wondered why we don’t buy toilet paper or toothpaste online,” Wiegand said.
The success of Alice.com lies in its ability to provide national manufacturers with a sense of security as they deal with the emergence of “private label” products. Private labels are products manufactured by the retailers themselves, usually at a price that competes with national manufacturers whose products may be next to them on the retailers’ shelves. As a cheaper option, private label products made more revenue than the national brands of Clorox and McDonald’s last year, and have almost equaled the sales of Proctor & Gamble.
“There is limited space on the retailers’ shelves because they are stocking them with their own products,” Wiegand said. “Eventually, they may get rid of the national brands.”
To counter what seems like an inevitable future, Wiegand and co-founder Mark McGuire have launched Alice.com. Wiegand and McGuire are serial entrepreneurs whose past companies include NameProtect and Jellyfish, which sold to Microsoft for a reported $50 million. Their latest endeavor gives manufactures a direct route to directly sell to consumers.
“The power always goes to those that have the consumer relationship,” Wiegand said.
Wiegand explained this by providing an example in which a consumer purchases a major brand bottle of ibuprofen at a national retailer’s website. Upon checking out, the consumer is asked if he or she wants to save money by purchasing the retailer’s private brand instead. As Wiegand noted, the national manufacturer and national retailer in this example are supposed to be “partners.”
“If you treated your partner like that in any other situation, the relationship would not last very long,” Wiegand said.
Alice.com allows consumers to purchase home essentials ranging from garbage bags to laundry detergent without the inconvenience of pushing shopping carts or waiting in check-out lines. The unique aspect of Alice.com, however, is that every product is purchased directly from the manufacturer.
“All of the manufacturers are willing to work together,” Wiegand said. “They work to decide what prices and coupons they want to advertise, and the success is that they cover the shipping costs.”
With free shipping, consumers are able to order as much as they want and receive one organized box from Alice.com, containing their assorted collection of products from various manufacturers.
Jan Moen, president and executive director of Accelerate Madison, loves the convenience of Alice.com. As an Alice.com user, it did not take a long time for Moen to see the benefits of ordering household goods online. However, the true revelation came when her husband began to see the real advantage of the website.
“My husband could not believe it,” said Moen, who attended the March 23 WIN luncheon. “He could not get over the fact that you could get a 65-pound box shipped for free.”
But aside from all of its perks, Alice.com’s real charm comes from the name itself. Having purchased the Alice.com name for $250,000, Wiegand thinks it will be easily remembered and associated with a face of its own. Wiegand mentioned Alice from the “Brady Bunch”, a television sitcom housekeeper who was the glue who kept the famous family of eight running – an appropriate name for a company which one day could very well be central to millions of households.
Voronov is a student in the UW-Madison Department of Life Sciences Communications.