PetSmart acquired Pet360 for $130 million in cash and up to $30 million more in future performance-based payments.
There were no secret ingredients that turned Diapers.com from a category leader into a category killier in 2009.
There were no secret ingredients that turned Diapers.com from a category leader into a category killer in 2009. And it also wasn’t rocket science. Instead what Diapers.com, No. 85 in the in the Internet Retailer Top 500 Guide, did to grow sales 104% to $182 million last year from $89 million in 2008 was to keep plugging away at what it does best: providing solid customer service and creating a unique online shopping experience for young parents and soon-to-be parents. While other web retailers scaled back their spending on marketing, merchandising and inventory because of the bad economy, Diapers.com went ahead and expanded its inventory to 60,000 products and used a combination of initiatives such as trucking orders from its various warehouses to the hubs of major shippers, to offer next-day delivery to 70% of its customers. Next year Diapers.com, which had just $2.5million in web sales its first year in business in 2005, expects to offer next-day delivery to 80% of its customer base. “We built this business on the basics of good customer service,” says CEO Marc Lore. “We’ve never lost sight of that.” Web retailers, whether they are on the way up or already there, can’t stray too far from online retailing fundamentals – but many do. Diapers.com is morphing from category leader to category killer because it knows who its customers are – mostly time-starved and burden-laden young moms – and it keeps on creating an easier and more relevant shopping experience that makes them repeat buyers. The formula works. In 2010, Diapers.com expects sales to top $300 million. What’s the takeaway for other web retailers here? To be a category killer, never forget that it’s all about serving the customer. Like Diapers.com, keep that fundamental in mind and everything will fall into place.