Effects of daily and wootoff strategies on ecommerce

• Published in: Industrial management + data systems Vol. 109; no. 3; pp. 389 - 403
• Main Authors: Wang, Bin, Liu, Lai C., Koong, Kai S., Bai, Shuming
• Format: Journal Article
• Language: English
• Published: Emerald Group Publishing Limited 20.03.2009
• Subjects: Electronic commerce; Prices; Sales
• ISSN: 0263-5577
• DOI: 10.1108/02635570910939407

Purpose The purpose of this paper is to analyze the prices and consumer behavior at Woot.com, a deep discount online retailer, and compare two selling mechanisms it uses the regular one deal a day and the wootoff mechanisms. The paper also compares the one deal a day business model with the mainstream multiproduct retail business model. Designmethodologyapproach Product, pricing, and sales data for products sold on Woot.com were collected using an automatic online datacollection agent. The data set of 572 products includes 270 products sold using the regular one deal a day format and 302 products sold on ten wootoff days. Findings Two periods of the day were identified when most orders were placed. It is found that Woot.com's prices were usually lower than the lowest found elsewhere online, and the price differences were even greater during wootoffs. The analysis reveals that the price elasticity at Woot.com is lower than those at internet retailers such as Amazon.com or BarnesandNobile.com. In addition, factors such as having the lowest online price, a large customer base, and selling during a wootoff and on weekdays all help increase sale outcomes. The comparison of the one deal a day and the multiproduct retail business model suggests that the former focuses on niche markets and primarily sells closeout and refurbished products to online bargain hungers. Originalityvalue The current study contributes to both research and practice toward understanding prices and consumer behavior at one deal a day web sites. Future research can examine other aspects, such as the order arrival on these sites.