www.alice.com
ABSTRACT
Alice.com has been launched on the 23rd of June 2009 in the United States. At a first glance, its corporate structure does not seem very different from other online supermarkets, except that it does not sell fresh groceries and delivers the online purchases for free. But when analysing its business model further, it appears instantly clear that the launch of Alice.com will have an enormous impact on the US trade system.
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Brian Wiegland, the CEO, explains that in Alice, suppliers not only decide which of their products they want to include in the online portfolio, but that they can also fix the prices at which these products will be sold to the final customers, define their own sales promotions, and receive -intact- the billing amount they generate (Wohl, 2009).
This implies that Alice’s profits do not come from the traditional gross margin of every transaction and thus not from its shoppers. Instead, they come from its suppliers, from the services Alice.com provides for them: customer information management (gathering data regarding profiles, shopping behaviour, sensitivities, etc.), home delivery, distribution of electronic coupons, and advertising.
Alice’s web managers decided not to perform many of the typical microfunctions that a company selling directly to the public usually does; for instance: define its suppliers, negotiate with them their product portfolios, decide the profit margins that Alice would charge, and design the sales promotions, among others.
In fact, Alice.com is a new retail business model in which suppliers can take full control of their commercial activities such as deciding their product introductions and withdrawals, and even define something as crucial as the retail price. Traditionally, they would only “recommend” the retail price to the chains. These suggestions would usually be considerably higher than the ultimate retail price. However, in Alice.com, several of the prices set by the suppliers represent a 25-30% discount compard to the usual supermarket price. In other words, this means that they sell at Walmart or Target prices.
Many retail chains may perceive Alice.com as a war declaration from their suppliers, and they would not be wrong. Suppliers, at the same time, could argue that the former gave too much priority to their own brands, and their argument would also be right.
It is crucial to understand that in our current business society the ancient roles (manufacturer, wholesaler and supplier) with their well defined set of tasks lack of unequivocal meaning. All the protagonists are simply firms that can configure their business model as if they were playing “Lego” with some given pieces: the microfunctions. In today´s world, each company can decide if it wants or not to perform a certain task or microfunction. Out of all these available microfunctions, those that add the greatest competitive advantage are those related to selling directly to the public. It is clear that one of the key projects of most firms in the near future will be to do branding by being in retailing.
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Lluis Martinez-Ribes
Source: Cinco Días
(July 17th, 2009)
4 responses so far ↓
1 Alice, la distribución y las cadenas de valor » El Blog de Enrique Dans // 16 September 2009 at 2:18 PM
[...] cierto cuidado. Así que aprovechando un mensaje de Juan Andrés Milleiro hablándome del tema y un artículo de mi amigo Lluís Martínez-Ribes, una de las personas que conozco que más sabe de distribución y que no duda en calificar a Alice [...]
2 Alice, la distribución y las cadenas de valor : Blogografia // 16 September 2009 at 2:20 PM
[...] cierto cuidado. Así que aprovechando un mensaje de Juan Andrés Milleiro hablándome del tema y un artículo de mi amigo Lluís Martínez-Ribes, una de las personas que conozco que más sabe de distribución y que no duda en calificar a Alice [...]
3 Sobre Tecnologia » Blog Archive » Alice, la distribución y las cadenas de valor // 16 September 2009 at 2:29 PM
[...] cierto cuidado. Así que aprovechando un mensaje de Juan Andrés Milleiro hablándome del tema y un artículo de mi amigo Lluís Martínez-Ribes, una de las personas que conozco que más sabe de distribución y que no duda en calificar a Alice [...]
4 Alice, la distribución y las cadenas de valor : www.silviatormo.com // 21 September 2009 at 12:36 AM
[...] cierto cuidado. Así que aprovechando un mensaje de Juan Andrés Milleiro hablándome del tema y un artículo de mi amigo Lluís Martínez-Ribes, una de las personas que conozco que más sabe de distribución y que no duda en calificar a Alice [...]
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