Interview & Podcast: Diapers.com Finds ‘Better Way’ for Parents
Listen to an in-depth interview with Marc Lore, CEO,
and Vinit Bharara, COO of Diapers.com. Listen now….
Marc Lore and Vinit Bharara are not just the co-founders of Diapers.com, they’re
dads. And, it’s from the personal experience of too many late night trips to
the store to pick up diapers and other products that the two came up with the
idea for their parent-focused business.
"I thought, ‘There’s gotta be a better way’," Mr. Lore, CEO of the
company, recently told RetailWire.
The company, which bills itself as "the largest online specialist offering
baby care necessities in the United States," had its beta launch in 2005
and initially resold diapers and formula purchased from warehouse clubs because
the company was not large enough for manufacturers to deal with it directly.
We "tried to make life more convenient for busy parents … And that
has been the theme since we started," said Mr. Lore. "We have been
extremely focused on offering an outstanding customer service experience beginning
with fast, free shipping, so we now reach about two-thirds of the country with
overnight shipping and a 6:00 pm local cut off time. So if you order 5:59 on
a particular day, two-thirds of the country will get it overnight and the rest
will get it in two days."
While service is paramount, the company understands price has a critical role
in the value proposition and has invested heavily in creating an efficient
supply chain to keep its costs, and those of its shoppers, down.
COO Bharara said, "Our mindset was to focus on the back end of our business
and logistics of our business — whether it be in the programs for our supply
chain management, whether it be the robots that we have in the warehouse, and
whether it just be in our entire philosophy of focusing on being the low cost
distributor so that nobody can deliver this stuff cheaper than us. And so we
have three warehouses positioned perfectly in the country to get product as
fast to customers as possible. That also gives us the lowest shipping rate
because we are closer to them. We have arrangements with UPS, FedEx and a bunch
of different regional carriers, again not only to get product faster to the
customer, but at the same time it actually winds up being less expensive."
Diapers.com recently opened a registry store location in Upper Montclair,
NJ. The cofounders saw it as a logical step in the company’s development.
"It was sort of a novel concept, no one had opened up, at least as we
have seen, a specialty registry store, that is a store whose sole focus was
on registry," said Mr. Bharara. "We thought that could be an interesting
thing to test. So most of this really was a function of testing, just trying
to understand customers’ needs and wants and also testing the concept of a
specialty registry store and see if we could potentially roll that out in other
markets, if this was or is successful."
Customer service is at the top of Diapers.com’s to-do list and employees from
the top on down take calls in the service center so they never lose touch.
"It’s part of our DNA, part of who we are," said Mr. Lore. "It’s
definitely empowering to know that you have the ability to take care of the
customer at any cost. We don’t have a budget, we don’t say, there’s no manual
that says what you can and can’t do. If there’s a problem, you basically can
take care of it at any cost, and customer service reps have on occasion spent
hundreds of dollars to take care of a customer after their first $50 order.
It doesn’t matter. In some ways, the easier the policy, the better the outcome,
Discussion Questions: What is your assessment of the opportunities and
challenges facing Diapers.com? Do you see the company’s physical registry
store test as a concept it can build on? Do you expect to see many other
e-tailers move to some sort of brick and mortar presence in the future?