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The changing world of shopping for diapers.

The changing world of shopping for diapers

Selling diapers on-line was never supposed to work. After all, how could an e-commerce company make money by quickly shipping such bulky, low-margin commodities to customers across the USA?

The answer from, which last year despatched some 500 million diapers from three giant warehouses in Pennsylvania, Nevada and Missouri, is that it cannot. Nor, explains Urstadt, in the October 2010 issue of Bloomberg Businessweek, did the company's owners ever plan to. They simply use diapers to draw in loyal customers who then throw in with their order one or more of the 25,000 higher-margin baby-care items - from shampoo to wipes to baby food - that lists on its site. Busy mothers will shop like this to save the time and hassle of having to drive to the supermarket.

Quidsi, the parent company of, believes it can survive intense competition from Amazon, the giant of on-line retailing, because of its product specialization. Among the advantages this brings, says Urstadt, are:

- the website can be designed to a particular clientele, with few clicks from home page to completed order;
- the most-ordered items can be stored close to the main US cities so that deliveries of these items can be made to the home within hours of an order being placed; and
- packaging can be tailor-made to fit the main items ordered.

Quidsi also benefits from greater flexibility in distribution. 'It uses different shippers to deliver to different places, depending on the rates, which vary by zone,' Urstadt reports. 'If they can save money by filling their own truck with orders and driving them from one zone to another, they will do that.'

The major diaper manufacturers now take seriously, but this was not always the case. In the early days, for example, Procter & Gamble refused to sell wholesale to the business because it was less than two years old and fulfilling orders from the garage of one of its employees. Now, of course, P&G is happy to deliver directly to and, as a mark of how closely the consumer-goods giant has itself embraced e-commerce, has an on-line store of its own.

In Volume 33, Issue 43 of Marketing Week, published in October 2010, Barnett highlights the growing trend for fast-moving consumer-goods firms to bypass conventional retailers and sell their products directly through e-commerce and on-line stores. The author cites the example of GlaxoSmithKline, manufacturer of such health-care brands as Aquafresh and Beechams, which has followed the P&G example and launched its own on-line store.

GlaxoSmithKline maintains that it is not trying to take market share from traditional retailers, but to find out more about consumers' buying habits by forming a direct sales relationship with them. But Barnett warns that such a move risks jeopardizing the well-established relationship between manufacturer and retailer.

No one is predicting the demise of the high street or out-of-town shopping mall any time soon. For certain categories of product - like clothes, fashion items and fresh food - there will always be customers who prefer to feel and see the goods they are buying, and who like the security of having a physical store to which they can return unwanted goods. High-street shopping can itself be a social and recreational activity for many.

But on-line purchasing does offer time-pressed shoppers the chance to avoid the crowds, queues and disappointment of a desired item being out of stock. It has grown enormously in significance over the last 10 years and the trend seems certain to continue.