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[7 comments]

Quidsi Keeps the New Websites Coming

February 15, 2012

Quidsi is following a familiar path. It's opening another website, taking off on a new and separate direction than it has gone before with the launches of previous sites: BeautyBar.com, Diapers.com, Soap.com, Wag.com and YoYo.com.

As with other Quidsi ventures, the newest site, Casa.com ("Everything for your home"), will offer a broad selection of products (over 35,000), free one-to-two day delivery on purchases of $49 or more, and full refunds for 365 days from the date of purchase for any reason.

The company continues to roll out sites in new categories similar to what it was doing before being acquired by Amazon.com in 2010.

"They pretty much left us to continue with the vision and strategy that we put forth before the acquisition," Marc Lore, CEO of Quidsi, told The Wall Street Journal. "We have enough oversight to get resources and capital to make our vision happen, but not too much so that it stifles."

One difference Quidsi has had from its parent company, at least to this point, is the willingness to test physical stores. Quidsi opened a BeautyBar store on Long Island with positive results, according to COO Vinit Bharara.

"We're excited by the results so far," Mr. Bharara told Reuters. "These things, if you do it right, and generate the right customer demand they're not done as loss leaders or anything like that. The financials make sense."

Quidsi will be looking at possibly opening other stores for new ventures going forward where it makes sense.

Speculation has been that Quidsi will soon be moving into sporting goods. Analysts from Credit Suisse wrote a note to investors claiming that job postings by the company suggested it was looking to launch a site to compete with retailers such as Cabela's and Dick's Sporting Goods.

FINANCIALS:     [NASDAQ:AMZN]

Discussion Questions:

Discussion Questions: What do you think of the Quidsi approach to business? What product categories do you think offer it the most upside potential? What categories are most likely to require physical stores in addition to Quidsi's main website business?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

What product category do you think has the greatest upside potential for Quidsi?

Comments:

It's a very crowded space. The only differentiator I see from this description is the return policy.

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Ken Lonyai, Digital Innovation Strategist, co-founder, ScreenPlay InterActive

Quidsi succeeds by moving into categories that have good margins, then adds their unique style and strong customer service. Watch for them to continue this growth over the coming years by adding more verticals like Casa.com.

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Max Goldberg, President, Max Goldberg & Associates

While these new online businesses can open at a frenetic rate due to the relatively low cost of entry, it doesn't necessarily mean that consumers can absorb (all puns intended) all these new sites devoted just to diapers, or other narrow ranges of products.

As with most ventures, there will likely be "stars" that draw enough traffic and interest over the long haul to survive as lasting entities, but most will fade over time as shoppers will not have the time or motivation to seek out special stores and websites for every category they buy.

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Mark Heckman, Principal, Mark Heckman Consulting

The home goods market could be a big one for Quidsi, depending on the range of products that they post. While some manufacturers have been firmly rooted online for a while, many others are reluctant to do so, for a variety of reasons. The result: many housewares items which are difficult to find in stores are still missing from the Internet retail marketplace.

I believe there is some significant market share out there looking for specific items and settling for similar ones. They should flock to this.

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Dan Raftery, President, Raftery Resource Network Inc.

Except for the eventual goal to open storefront versions of their websites, Quidsi seems to echo another of Amazon.com's subsidiaries, Zappos.com. Including the 365-day return policy. Zappos has always specialized in shoes, but they now feature several categories and I buy my Levi's there.

I can understand opening BeautyBar storefronts because they're selling an intangible -- beauty -- which benefits significantly from personal consultation with store associates. The other sites sell tangible stuff, where the benefit of face-to-face salesmanship is far less necessary or productive.

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M. Jericho Banks PhD, President, CEO, Forensic Marketing LLC

I am sure this model will continue to be successful for them.

They seem circumspect about their assortment and the limitation, challenges of shipping and margins. Some products have better financial and customer stickiness (detergents, pet) aspects but once you have the customer signed on to one site ... why not? AND these sites are easier and more well organized than that chaos that can be the Amazon base site.

No reason to believe that eventually the back-end infrastructure between Amazon and Quidsi won't come together benefiting both. Data sharing; I am sure that Quidsi and Zappos data all flows into the mother-ship for digestion. Why separate sites from Amazon? Easier more focused navigation on the Quidsi sites as mentioned above, and an alternative to Amazon for those who dislike or want to "move up." Not unlike the old GM strategy.

Why physical stores? Sometimes do you do things just to learn?

Mike Spindler, Managing Partner, Panther Mountain Companies, LLC

There is still lots of room for e-commerce sites to differentiate themselves on customer experience alone. Watch a group of shoppers in a usability lab trying to accomplish their goals on almost ANY site and you'll see what a miserable experience most e-com sites are for the average shopper.

Zappos is a good example of a site that does win a significant amount of business based on their vertical market differentiation and their premium customer experience. I'm sure that is the model that their peers at Quidsi hope to replicate. I don't think the current suite of sites at Quidsi have achieved differentiated experiences yet, however.

We're even seeing the trend of retailers investing in vertical market specialist trickle down, such as Dillards recently investment in acumenholdings.com.

It must be temping to leverage Amazon accounts and/or Prime membership on those Quidsi sites, which obviously we haven't seen yet at Zappos or Woot. (Woot gives me 6 choices for social sign-on and one alternative payment method, but no Amazon for either).

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Jason Goldberg, VP Commerce Strategy, Razorfish

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