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Alice.com Takes Shopping For Household Goods Online

Consumer packaged goods companies have been watching as retailers use the Internet to develop stronger relationships with consumers.

Serial entrepreneurs Mark McGuire and Brian Wiegand have started yet another online company, Alice.com, a Web site that provides a platform for consumer packaged goods (CPG) makers to sell directly to consumers.

The pair until recently worked for Microsoft, following the acquisition of their last startup, Jellyfish.com. Before that, they started NameProtect and BizFilings, both of which were also acquired.

"We left Microsoft so we could sell toilet paper and toothpaste online," explained McGuire, Alice.com's president and co-founder, in a phone interview.

Consumer packaged goods companies have been watching as retailers use the Internet to develop stronger relationships with consumers, McGuire said. In some cases, retailers are competing with CPG companies through private-label products. CPG companies, he said, "are struggling with how to stay relevant."

Because consumers don't go to brand-specific sites to purchase brand-name goods -- no one goes to Tylenol.com to buy Tylenol, for example -- there's a need for service like Alice.com that lets CPG companies connect with customers. "CPG to date really hasn't been able to participate on the Internet because no one is really buying these goods online," he said.

That's not for lack of trying to convince customers to buy household items online. Startups like Webvan tried online grocery delivery and failed spectacularly, while others like Peapod have made a better go at it. But McGuire insists that Alice.com is different, not only because it's not selling perishable goods, but also because it's not an online retailer. He says the service is more like Netflix or Mint.

"Obviously there are lots of business models that blew up in the dot-com phase because people overspent on acquiring customers," he said. "By focusing on household essentials, we can use the existing distribution infrastructure.

"The way we've set up Alice and structured it, the manufacturer is making the sale," he continued. "We provide service for them."

The service revolves around free shipping and delivery and prices that are competitive with big-box retailers. Alice.com may not beat Wal-Mart or Costco in every category, but its prices are close enough that they're compelling when weighed in conjunction with the time and gas spent driving to and from such a store.

Alice.com is at least as compelling to CPG companies, if not more so, because it provides them with data about customers, which retailers don't generally share. It offers CPG companies a variety of programs to help them compete with retailers, such as coupons, loyalty programs, product trials and sampling, customer surveys, and category sponsorship opportunities.

Alice.com, in other words, is an advertising platform for CPG companies.

"At Alice.com, with every sale, they know who the customer is," said McGuire.


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