Launched by two active but frustrated fathers who grew tired of having to race to stores at all hours of the night to replenish their children's diaper supplies, Diapers.com has soared to $89 million in sales in just four and a half years.
The online retailer's mission is simple yet effective when carried out properly, which Diapers.com appears to have done: "To make moms' lives easier by delivering all the necessary baby products in a timely manner with great customer service," says CEO/Co-founder Marc Lore.
Lore and fellow Webtrepeneur Vinit Bharara founded Diapers.com to stake out new turf that was nowhere else online: a one-stop, baby-focused e-commerce store that helps make the lives of 24/7, baby-caring parents a little easier.
The company touts low prices on all of its merchandise, one- to two-day delivery, and free shipping on orders of $49 or more — all while striving for stellar customer service.
“Our customers know that if they order a car seat on Monday, and they happen to be in our overnight shipping area, they’ll get it on Tuesday; they trust our reliability,” says Executive Vice President of E-commerce Lisa Kennedy.
Pampering customers with good service is one thing; shipping bulky items such as those huge diaper boxes is another, especially in one or two days, often with no shipping and handling charge. “We invested most of our time and resources early on figuring out the distribution process,” Lore says. Here’s how Diapers.com does it:
- Buys in truckload quantities directly from all of the major manufacturers, such as Procter & Gamble and Johnson & Johnson.
- Buys and offers more economical bulk sizes that many traditional brick-and-mortar stores don’t have the shelf space to house.
- Operates three customized and efficient state-of-the-art warehouses in Pennsylvania, Nevada and Kansas to maximize delivery speed. The company has built software that allows it to ship orders the same day until 6 p.m., even though the UpS truck leaves at 6:30 p.m., Lore says. The software determines the optimal mix of box sizes and automatically allocates items in an order to the most efficient boxes.
- Has negotiated discounts with shipping carriers.
3,000 SKUs warrant site upgrade
Last year, Diapers.com upgraded its Web site to support 10 different categories, more than 100 subcategories and the assorted types of products. “We went from a Web site that was very simple to something that could support” the rapidly growing business, says Director of E-commerce Operations Josh Himwich.
Diapers.com’s site upgrade also was designed to better address the company’s core customers and enable it to better communicate with them, Himwich says. With busy parents in mind, for instance, the site offers customized product recommendations, directing customers to age-specific offerings. The site also offers customized homepages for returning customers, which help make product reorders easier.
For the design of the Web site, Diapers.com worked with Fluid, a San Francisco-based interactive agency, while handling all programming internally.
Reaching moms on social networks
Beyond the Web basics, Diapers.com is also aggressive with social networking as a marketing tool. “Moms, in general, are a viral market, and the audience that we attract is digitally savvy,” says Director of Marketing Christina Carbonell. Aside from using social networking to connect with others and get information, the company’s targeted demographic uses it to help make decisions about where to shop and what to buy.
But the company is moving into the social media space cautiously. Himwich points out that much of motherhood is “all about sharing and communication. Then they have to shift their mental focus to think about e-commerce and shopping.”
One way to bridge the gap between communications and shopping, Himwich says, is to create a site that feels familiar to the Facebook environment when consumers come to Diapers.com's e-commerce site directly after leaving Facebook. “We’re thinking about ways to create effective landing pages that can extend this communication and sharing experience and lead [consumers] into the act of shopping,” he says.
Diapers.com also uses some of the social networking sites to advertise. The company has a Facebook fan page. “By having a fan page, we enable people to share their information with friends as they become fans of Diapers.com and post links,” says Matt Lindenberg, assistant director of marketing.
The marketer also has tested running paid ads on Facebook, but that’s been more of a challenge. “This type of advertising is very scalable,” Lindenberg says, “but it can be very expensive. So we’re still thinking about whether or not this can generate a relevant ROI.”
Diapers.com also has begun to dabble in Twitter to get the company’s word moving among consumers more quickly than other media, Lindenberg says.
Diapers.com also has made its e-mail messages social. By using Silverpop’s Share-to-Social feature, it’s begun placing links in its marketing e-mails, allowing recipients to post messages to their profile pages on Facebook or MySpace. One of Diapers.com’s e-mails, in fact, was posted on 50 different social network profile pages.
“If executed smartly, these social networking channels can drastically and inexpensively increase our reach,” Lindenberg says. “When word goes out via a social network, it’s not a brand promoting its own message — that always comes with dubious credibility. It’s regular people sharing information that they found interesting and relevant. And with that comes a vast amount of credibility.”
Socializing about affiliates
Social networking also provides a huge boost in ROI for Diapers.com’s other digital marketing programs. “We have a strong affiliate marketing program and are very active in building those relationships out,” Lindenberg says. “But when our customers get excited about offers they see through one of our affiliates, and tweet about them, all of a sudden the Twitter chatter takes the reach we would have had for an affiliate to an exponential new level.”
E-mail is a key tool in Diapers.com’s digital toolbox, as the company uses e-mail for customer acquisition as well as loyalty and retention. From a customer acquisition perspective, “we build a house list over time and try to encourage people on that list to buy from us,” Lindenberg says. The e-mails, which include special offers, reinforce the company’s value proposition.
Diapers.com also sends acquisition e-mails using names rented from lists, though as Lindenberg points out, “We don’t just blast e-mail messages out there.”
To its existing customers, Diapers.com sends e-mails that announce special sales and promotions or new product launches. It also sends targeted e-mails that offer specials for specific brands to customers who have shown a tendency to want to buy those brands. The company also uses trigger e-mails with links to abandoned transactions to help parents who get pulled away from shopping on the site pick up where they left off.
To enable this, Diapers.com works with a solution that combines Coremetrics’ LIVEmail analytics system with Silverpop’s e-mail marketing system. The solution enables it to automatically receive a daily list of customer names, e-mail addresses and dates of abandoned online shopping carts.
Two days after abandonment, the system triggers an e-mail reminding those customers that they left items in their carts and encourages them to come back to the site to complete their purchases. Items are held in abandoned carts for two weeks, and no sale promotions are part of the “come back” program.
The company’s shopping cart abandonment e-mails made up just 2.7 percent of its e-mail volume in May 2008, when the system was launched. But they contributed 10.4 percent of Diapers.com' total revenue from e-mail marketing.
Next up: an e-newsletter
Diapers.com plans to launch an e-newsletter later this year that targets mothers at different stages of their lives. “Moms’ needs change dramatically over the first two to three years of their children’s lives, and they may not know what they need next,” Carbonell says.
With targeting, Diapers.com can talk to parents based on specific developmental stages that their children are going through and present products they'll need to help get them through that stage.
As for other plans, Diapers.com wants to continue being a one-stop shop for all things baby.
“We’re going to continue to live up to our claim of delivering everything but the baby,” Carbonell says, adding that the company also plans to increase its SKUs to 12,000 from 3,000 by the end of the year.