Wow, alice.com is somewhat annoying. They front-load the annoying, frustrating part of the process -- filling out who your family consists of, telling them what you buy, and actually registering for the site. This is all before you can see a price. They'd have more people if they let you see the prices with no hassle.
"If you live in Alaska, Hawaii, or another country, we hope to be able to serve you in the future."
If that is true, they will make a killing in these states, since they would have no online competitor - just as Netflix checkmated in HI by opening a Honolulu depot; no other mainland-based service could compete. Also, there are not many brick and mortars competitors in some areas of HI.
Of course, making a killing in AK and HI is not going to get them megabucks (the population is too small), but still, it's nice to have a pond where you are the big fish.
As for the service in general - sure, I'd use it, even if it was slightly more expensive than going to the store. Who wants to waste an afternoon shopping for toilet paper in Wal-Mart? Off the cuff, I'd say I'd be willing to tolerate a 5% price increase of my current cost for the convenience. Whether that is enough to defray their shipping, I don't know.
Shipping is "free", but of course that just means the cost of the products will be higher. But if you're in a state with significant sales tax not having to pay that might even offset the higher prices.
I wouldn't say they are taking on Walmart. Here is the CEO on making money:
"We're really not a retailer at all. We make no [profit] selling goods. We make money on the advertising side of doing coupons, sampling and keywords – like if you type "shampoo," what shows up first, second, and third. We have a Google-like click model."
Now's a good time to try taking on Walmart; their prices are climbing faster than the other groceries in this area, they're still lower on most things, but not as many and not by as much. And the convenience factor should help a lot.
