Jumping from No. 74 on the 2010 Top 100 Retail Movers & Shakers list, deals of the day are a significant part of the retail experience.
Woot.com is an online store and community that "focuses on selling cool stuff cheap," generally offering just one item a day — usually a piece of computer hardware or an electronic gadget — until it is sold out or until 11:59 p.m. Central Time, when it is replaced by the next day's item.
In the words of Matt Rutledge, an electronics wholesaler who founded Woot in 2004, "it started as an employee-store slash market-testing type of place for an electronics distributor, but it's taken on a life of its own."
Indeed, Woot's phenomenal success — the company was acquired by Amazon in June — has sparked a slew of similar deal-of-the-day sites with quirky product descriptions and real-time inventory updates. DODTracker.com currently monitors more than a hundred "one-a-day" sites with real-time inventory updates, the most inventive and buzz-worthy being Groupon (see No. 11).
Consumer psychologist Kit Yarrow points out that deal-of-the-day specials push consumers to cast rationality and budgeting aside.
"The immediacy and urgency of this limited time frame is one of the top killers of rational thinking," Yarrow said. "We walk around our world with a finite set of options, and suddenly this deal on a balloon ride is presented to you. It overrides a lot of our self-control that consumers have acquired in the last couple years."
Yarrow further points out that many companies participating in the deal-of-the-day phenomenon — entertainment, restaurants, nail salons, etc. — are those that have been hit hardest by the recession.
"By offering these one-day deals," she said, "they're trying to work themselves back into our spending consciousness."
Deal-of-the-day offers now are popping up everywhere, from newspapers, social sites and even established retail stalwarts such as Staples. And for good reason. This past September, coupon site Restaurant.com tried offering a deal of the day and sold 1.5 million coupons in 48 hours — a tsunami compared with the 79,000 coupons it normally sells in that time frame.
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