STORES Magazine - August 2010 - (Page 35)

EXECUTIVE SUITE / ONLINE The “No Middleman” Middlemen Direct-to-consumer CPG sites staking out their own turf BY SUSAN REDA, EDITOR S debuted last month, becoming the latest entry in the burgeoning segment of online consumer packaged goods retailing. Co-founded by thirty-something entrepreneurs Marc Lore and Vinit Bharara, debuted with about 25,000 products from 900 brands — everything from paper towels to detergent and batteries to body lotion. The proposition: prices that are on a par with or lower than those of the store up the street; speedy, straight-to-your-door delivery; and free twoday shipping on orders over $49. By the end of the year, expects to offer more than 40,000 items and is targeting 100,000 by the end of 2011. Lore and Bharara are no strangers to the ecommerce arena. The two cut their teeth at, building that business from the ground up beginning in 2005. Annual sales tallied $182 million in 2009, and that site ex- By the end of pects to sell $300 million in diapers, baby the year, wipes, bottles, formula and more this year. In less than five years it has established itself as a expects to offer customer service frontrunner, ranking second more than only to, according to independ- 40,000 items ent rating agency StellaService. and is targeting Convinced they can leverage the success and 100,000 by the goodwill they’ve nurtured at, end of 2011. the two executives — friends since the fifth grade — are wading further into the sea of CPG. “We’re listening to our customers,” says Lore, CEO of Quidsi, the parent company of and “Moms have been nudging us to grow with them and their families.” Larry Joseloff, vice president of content for, the online division of NRF, acknowledges the strength of the subscription business. “Small, pure-play retailers that have great customer service and can do great things on a small budget could make a real impact.” Efficiency makes the difference Truth be told, Lore and Bharara take great pride in the hands-on approach they’ve applied to the business and the systems they’ve developed to support it. “We’ve built an iron-clad infrastructure consisting of a sophisticated back-end and logistics network,” Lore says. “Service and selection are our value WWW.STORES.ORG proposition and we believe the opportunities for growth with are considerable.” A lot of companies “start on the front end and then do the back end,” Bharara says. “We did the opposite. We built proprietary systems to assure inventory management efficiencies and we’ve installed robotic technology in the warehouses to speed picking and packing.” Lore and Bharara insist that the space is crying out for competition, with only a handful of players making noise: the Subscribe & Save program from;, which debuted a little over a year ago; and Procter & Gamble’s which opened for business earlier this year. Of those, they consider to be their most “concerning” competitor. The Subscribe & Save program offers members discounts of up to 15 percent and free shipping on items they routinely purchase. Products are shipped every one, two, three or six STORES / AUGUST 2010 35 http://WWW.STORES.ORG

Table of Contents for the Digital Edition of STORES Magazine - August 2010

STORES Magazine - August 2010
Editor’s Page
President’s Page
Retail People
Hot 100 Retailers
Customer Interaction
Human Resources
PCI Update
Internal Theft
ARTS Update
Point of View
NRF News
Retail Industry Calendar
End Cap

STORES Magazine - August 2010