We’ve talked a bit about the threat of private label on this blog (here for example), but sometimes a picture is worth a thousand words. I came across just such a picture this weekend, scanning the local Sunday paper.
The following is a copy of the Sunday insert for Target. In my opinion, the strategy here appears to be the following: get the consumer’s attention with well-known brands, and then make sure the consumer sees your own competitive alternative to that national brand. This picture really represents a battle for market share worth $100’s of billions.
The reality is that retailers like Target are working hard to innovate, and they are using their direct customer relationship to their advantage. Good for them. How will major CPG manufacturers step up to this challenge and deliver more value to the end consumer?
One way is by finding new ways to connect and sell directly to the consumer. There are examples in the news often, like the news today that Procter & Gamble is getting directly into the retail business with its acquisition of retailer “The Art of Shaving.” According to an AdAge article announcing the sale, a P&G spokeswoman confirmed that “P&G is looking to get more direct contact with consumers.”
Sounds like a smart move to me. And there is more to come from the industry. In fact, Alice.com is weeks away from launching a new retail platform that will give CPG manufacturers a powerful new way to connect directly with their end consumer. I’m excited to tell you all about it very soon 
.
Private labels will take over P&G an SC Johnson etc if they don’t find ways to fight the Walmarts, Walgreens. CVS, Targets, etc… of this world. I for one find private labels pretty enticing when they are side by side and you read the labels and they are basically the same for sometimes 1/2 the price. You guy’s seem to be on to something with Alice. I’m looking forward to your launch. Will you offer private label?
I am reading your blog with interest, seeing a side of things I’ve not really been aware of. I have been using Alice.com for a little while now and I am very happy with it so far, however, if your prices were considerably higher than what I could buy from my local stores, I wouldn’t shop with you. I use store brand products because it makes no sense to do otherwise. Why should I pay more for virtually the same thing just because it has a brand name? There are a few brands I am loyal to (like Bounty paper towels), but very few. I am interested in quality products for the best price.
Several things impress me about Alice (in no particular order).
1) No shipping cost. That would blow the deal because there would be no way to compete with local prices if I had to pay for shipping.
2) Good prices. Your prices are usually slightly more than what I would have to pay at the store, but I save on gas and impulse spending. It also saves me time, and that is important to me.
3) Good selection. You have the products I use and enough variety that I can shop and choose and find what works best. I look forward to continued growth in product offerings.
4) Good service. You listen and you respond very promptly. I am quite impressed with your customer service.
5) Expedient shipping. Orders come very quickly and are extremely well packed.
6.) Continually adding products. …and you give us the opportunity to suggest products.
7.) Paypal. Yay! You take Paypal now! (just had to add that)
I realize Alice is a fairly new service and concept but I sincerely hope you are able to maintain these things as you grow. I will be dissappointed if things deteriorate, but I wouldn’t hesitate for a minute going to my local Meijer (hate Walmart!) or wherever and buying their store brands.
I found it interesting in the previous blog entry, this statement, “Best Buy believes it can prosper in private-label electronics — an area that has historically flummoxed U.S. retailers – by using the mountains of customer feedback it collects from its stores to make simple innovations to established electronic gadgetry.”
Well, what a concept … Use customer feedback to provide what they need and want, to do stuff in a way that works for the consumer!
Lots more thoughts rattling around, but I’ll bring it to a close here. I do really love Alice.com and I do my part to spread the word. Keep up the good work and you’ll keep me as a customer.
Something I forgot to include in my list above…
You make it easy! Your interface and process is so easy to use. I love that I can select my products and just drag them to my cart next time I need something. You’ve done a really great job with your storefront setup and processes.
Sharon