questionswhat is woot's strategy on local.woot?

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pt 1 of a couple comments in series here:

I have been watching Groupon since it launched in 2008, largely with admiration. I talked to Andrew Mason in the early pre “big ipo bet” days and we pondered various collaboration opportunities with excitement. Andrew was/is a fan of Woot and Groupon itself is mashup of Andrew’s altruistic “tipping point” concept and Woot's daily deal commerce model. However, to Andrew’s full credit, the spectacular innovation ended up being the same sort of reverse disintermediation that occurred when Dave Litman and Bob Diener launched what became Hotels.com: Groupon became the exclusive online checkout register for an ultra-fragmented business group of local service businesses. Groupon hit on the huge key to unlocking local commerce online – they made it actionable and exciting.

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As we discovered at Woot, there is enormous power in the marketing efficiency that the daily deal mechanism brings if left organic. Traffic generation from Daily Deals may be the most successful marketing idea I will ever have. However, this style of business model has a key strategic difference from normal ecommerce. The Achilles’ heel of daily deal marketing is that you have no Selection Network Effect –very little competitive moat is created around the business as it grows. In other words, it is inherently not possible to go about building a better and better business by simply adding to your selection every day to improve the customer experience. In addition, economy of scale (a larger customer base) is not as much of a network effect for your suppliers to appreciate, because it is too easy to overwhelm the supply of any particular opportunity. Selection is what drives the “Long Tail" of most successful internet commerce plays and it is the antithesis of a daily deal.

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Moving forward from this core strategic position, I believe that there are then three cornerstones to building the best daily deal platform:
1. Exclusivity
2. Credibility (voice / transparency / brand)
3. Community
When I wrote the original Woot FAQ in 2004, I had only these goals in mind. The primary goal of Woot was to build best community by offering the most exclusive deals possible with the highest level of credibility. All other business goals were far secondary in nature – outcomes of the primary business proposition to build a very large community of the smartest consumers.

I believe voucher retailers fail on these measures of what makes for successful long term daily deal business. Most critically, they are exhibiting very little ability to offer exclusive content. Notably, there are several players that realize this and are carving out exclusivity as quickly as they can, but it may be too late for mainstream recognition.

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The secret of local.woot is that it is not Woot’s foray into the local deals voucher middle man industry. In fact, I am essentially disgusted by local vouchers when presented individually by daily deal sites. I’ve never been able to get myself to buy one. Prepaying to lock myself into a business offering that I can’t fully explore with a subjective discount is precisely what I do NOT do as a consumer. Instead, Local.woot is an experimental exercise to improve the experience and vetting to better qualify these deals. The existing sites lack exclusivity, credibility and community. Local.woot is Woot’s attempt to make local deals appetizing to ourselves as consumers. The industry offers zero exclusivity – the best we can do is to blow that up as the falsehood it is and bring the Woot credibility and community to the forefront. Ironically, there is in fact a selection marketplace of the sum of all the daily deal attempts to be built here and we are ready to build it.

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@snapster: interesting read; thanks for sharing.

oh, and best of luck with local! the aggregation of these deals in one easy to consume portal definitely sounds like the best way to see them succeed. i'm curious to see the uptake, and if existing users of groupon etc. will begin using local.woot as their means to browse offerings, or if the majority of early adopters will be existing woot users. likely the latter at first...has there been any discussion of cross-promotion?

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@pinchecat: thanks for the feedback. on cross-platform stuff, we'll have navigation added later today - that is the launch essentially (the stealthy bit meaning we just aren't going to have any fanfare PR)

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It is true that the one thing that Woot has that the other (Wanna-be) daily deal sites don't is a community of users that are trusted. Woot is and always will be a site that I trust. I am to the point where I don't even feel like I'm getting a deal unless I find it first on Woot. I am super excited to see local.woot launch in the Denver, Colorado area! Only then can I finally un-subscribe from Groupon's lame e-mail list. I feel like I get 5000 e-mails from Groupon and only 1 in a great while actually matters, and most of the time I miss it or it sells about before I even get a chance to purchase it. Not to mention how scared I am when I give them my CC info. Woot is doing all the right things, Bringing us every type of deal and not having to worry about being riped off! Good luck with the local.woot, I know you won't let us down, you never do! <3 my Woot!

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@mommyleah: thanks - very nice to hear.

since I'm in maximum verbosity mode, here's a clarification of our goals with local-woot:

We want to provide a platform for smart consumers to collaboratively determine whether there are any local voucher deals worthy of purchase in their area.

on re-reading I'm realizing it may not have been clear what I meant on us not entering the industry directly and not having "buy buy buy" as our goal.

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@snapster: I have to be honest in say that is the what the voucher market needs. We don't need another provider of the voucher market, but we do need a fun, reliable aggregator for all the voucher deal providers.

I am a huge fan of the idea and check it every day and am looking forward to it's success.

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@snapster: Thank you for defining what local.woot does. Took me a while to comprehend the purpose.

Please correct me if I'm wrong w/the following definition of how I view your new woot site:

It is an aggregation of some local voucher deals. i.e. from groupon, living social, etc. You filter or select the deals you think are viable and would appeal to the targeted area. It will allow potential customers to go to your site to see most (not all) of what's available in their area.

Should I be totally off-base on my definition, please forgive me. I gave up corporate-speak long ago. I relate much quicker to the KISS philosophy.

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@gmwhit: as we expand, I have a feeling that we will be in the best position to have the most inclusive aggregation service - there might be some really crappy ones we exclude, but otherwise we will be going with all in place of some there.

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local.woot nav now live on the regular ol' woot sites.

in amongst weird test-gone-awry on comment editing here.

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@snapster: Interesting.

The main problem I personally have had with Groupon/Living Social/etc. in the NYC area is that the deals are rarely worth it to me. Either they simply don't interest me (eg. spa treatments), they aren't a special value (eg. I can get the same deal with a free coupon in the local pennysaver), or, mostly, are not worth it when I add the travel into Manhattan (I live and work in Queens: it is 60+ minutes into the city and if I drive, figure $20 and up for parking).

I am hoping that local.woot helps with the lack of deals in Queens and eastern Long Island.

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@snapster: Do you consider Local.woot to be constrained to the voucher market? I'd hate to see this as I find the vouchers so unappealing for the reasons you mentioned. I've been watching your StL local and I haven't seen anything compelling since you added me as a user a couple weeks ago.

Furthermore, I'm out in St. Charles, and I don't want to drive to most of the deal locations.

I'd like to see 2 things that I think the Voucher sites are failing to offer (even if aggregated):

1. Hyper local: Similar to your Deals near me feature, but I would like my deals prioritized without having to specifically search that way. Perhaps something like Gmail does the important inbox, deals within 5 miles are way more important to me than a $25 massage 45 minutes across town.
2. Non-voucher deals: I know a couple of great happy hour spots that aren't advertised anywhere. I'm sure the wooters around me know even better places to find a good deal.

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@andrewshead: yep, good stuff. thoughts:

1. we've looked at some map-first style designs and brainstormed on that being a compelling UI pivot for the data set to offer - this would allow you to quickly visualize the radius you wanted.

2. we've also talked about opening back up user suggested places to intermingle with vouchers and serve as 'meet-up' type venues as a bonus.

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@snapster: Thanks again. Am wondering if you are thinking of, or already planning, to be an aggregate on a national scale, too?

For instance, having ThatDailyDeal, 13 deals and the other countless sites that have a daily-type deal combined into one national.deal.woot site. (Also, some regular sites, such as HomeDepot.com always offers a daily deal. I know there are others.) It would seem to be a valuable site - one where every national deal is plopped together. Will posssibly diminish deals.woot, but I think I'd find it very useful. Perhaps deals.woot could become a true site to find special deals that other members have tripped over. Like 40% off site-wide sales, etc. And other deals that are not the 'one-day' type.

Would save (as will the local.woot) a lot of incoming e-mails announcing each site's latest big daily deal. I would really like getting rid of all that 'noise' in my inbox!! To me one word describes local.woot(when fully implemented) and a national.woot - Convenient!

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To late to edit my previous comment: Would like to change one word 'convenient' to: One Stop Window Browsing for National Daily Deals. (I'm clearly too wordy!)

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@gmwhit: Yes, we've brainstormed on that and it sounds like you've loosely made the same association that we did in that a "national voucher deal" is a hybrid deals.woot/local.woot type of thing. Our early brainstorm lead us to visualize a shared tab that showed up to both on the deals.woot interface and the local.woot interface.

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AHHHH put deals.woot back on the Main Woot Page !!!

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@jonthomasdesigns: Psst. It's still there. It's just below the

kids|shirt
sellout|wine

boxes.

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@jonthomasdesigns: Oh Yeah it is there .. Well Put it back on Top ! : )

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Thanks for the read @snapster. It's great to read what you had in mind.

I also agree with the three main ingredients: Exclusivity, community and credibility. That would be the value-add for your members here.

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I was hoping that the rumors were slightly inaccurate and you were going to launch lolcat.woot

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@philey: I so wish I had a "close thread to further comments" option now to preserve the best closing message ever.

I'll have to simulate.

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