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Retail Top 100 2012, No. 40: Deal-of-the-day

October 1, 2012

The "daily deal" concept is as old as retailing itself. Strictly speaking, deal-of-the-day sites are similar to job lot discounters. They take unused capacity and sell it at a discount. The difference is that businesses use social media to pre-sell this excess inventory in hopes of luring new customers. Pioneered by Woot in 2004, deal-of-the-day websites started out selling mostly electronics and tech gear at deep discounts. Woot's phenomenal success — the company was acquired by Amazon.com in 2010 — combined with extremely low barriers to entry inspired a slew of similar deal-of-the-day sites with quirky product descriptions and real-time inventory updates. It wasn't until such sites began offering deals for local shops and restaurants that the industry truly took off. BIA/Kelsey released a forecast in March 2011 indicating that consumer spending on deal-of-the-day offers could grow from $873 million in 2010 to $3.9 billion in 2015. The same forecast also estimates there are 178 U.S. cities with deal-of-the-day sites reaching 102 million people.

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