It wasn’t all that long ago that an ecommerce business named Woot! did a remarkable thing. Rather than build a massive product inventory or embrace an infinite number of products available for drop-shipping they decided on a different model—‘one day, one deal’.
Think back a few years and you might remember that until recently this was a pretty rare business model. The recent introduction of sites like Groupon has people forgetting that this is not a wildly innovative new phenomenon. In fact, savvy people are saving money every day shopping online, but as it turns out there are plenty of start-ups and established enterprise ecommerce businesses all looking to capitalize on the recent hype of the daily deal idea.
The interesting thing about a daily deal ecommerce model is the growing conversation about the actual legitimacy of the deal people are getting, the potential for fraud, or the concept that such sites may be violating consumer protection laws.
Despite where you might be positioned in that debate (or if you have no position, like me) the reality is that regardless of whether or not people are actually getting a great deal, these sites give the impression that we are. Combine the age-old sense of urgency with a live timer that counts down the hours, minutes and seconds until people have missed their big chance, and all of the sudden companies have a psychological tactic that is still surprisingly effective when it comes to persuading people to make a purchase.
The truth is that there are great prices to be had on all kinds of products all over the Internet. If you miss out on a daily deal from Woot!, chances are good you’ll be able to find something similar at Newegg for practically the same price. But there’s no question that creating those feelings of exclusivity and scarcity is a call to action that produces results. The question is, for how long?
Jared Matkin is a staff writer for HotWax Media with a background in PR, Branding and Marketing. He’s also a light-hearted and an opinionated character who will join other HotWax Media employees and advisers in periodically posting his thoughts on topics ranging from enterprise eCommerce to business and technology.