Darold Rydl, Director of eCommerce and one of the first on board at Woot!, spoke about the company’s sales philosophies at last January's Live Shopping Days conference in Berlin:
A summary of some highlights from his keynote address:
The Woot! channels and the selection of niches
Woot! targets the types of products for their channels very selectively: How does does the overall offering look like? What is the competitive situation in each particular niche? How big is the market? What kind of structural features exists (such as seasonal factors)?
Besides these questions, it needs to be clarified if the product types vary enough to be able to offer a deal every day without having too much repetition. According to Rydl, this means many manufacturers and many different products. The kids.woot channel, which launched August 2009, fulfills the criteria excellently.
The same applies for wine.woot. The success criteria for the wine market is similar to the electronics market: Fast and relatively short product cycles combined with consumers with strong opinions.
At Shirt.woot the designers are a part of the community. Shirt.woot is also Woot!’s only international channel. All other channels are only available in the US.
Transparency, transparency, transparency
Woot! puts priority on radical transparency and openly address problems or product flaws directly. According to Rydl, this has now become an ingrained expectation amongst Woot!’s community. Adding to the transparency are officially published statistics.
The current size of the Woot! community is 2.6 million, according to company statements.
Announced cooperation with Twitter
After he had spoken about a cooperation with Blippy, Darold Rydl used his keynote to announce a cooperation with Twitter.
The Woot! account on Twitter has over 1.6 million followers. According to Rydl, it’s Twitter’s largest store account and the leading monetizer on the platform.
Mobile Apps
From the audience, the question was raised if using different access methods (such as mobile apps) bring the consumer closer to the promotions. Woot! doesn’t create their own apps, but the community has written six apps for the iPhone.
This demonstrates that once a company builds a large enough community, such issues don’t need to be addressed centrally - so long as the company doesn’t mind to give up a certain amount of control.
iPhone traffic on the Woot! site amounts now to around 12% of revenues.
International expansion?
Woot! has no interest on international expansion. The barriers to entry, such as logistics, are too high, according to Rydl. Instead, Woot! prefers to focus on the American market and is working to further their share of the 300 million potential customers there.
Further details
The biggest problem for Woot! is to keep the massive amounts of product on hand.
Planning deals sometimes take only one to two days. In the best case they hold out for seven to ten days.
The return rate is less than one percent. Woot! warns in advance however, “you can’t return to us”.
Woot! has in total 160 employees (including warehouse employees, etc.). 12 employees are responsible for the product sourcing.
Monday is always the strongest revenue day of the week.
The introduction of “Two for Tuesday”, the coupling of two products on one deal, was actually an accident. But this promotion is expected by the community now and therefore it is maintained.
Tuesday is normally the weakest selling day of the week.
Related posts:
- Woot! 2004 - 2010: After 6 Years, Sold To Amazon
- 5 Years of Woot! - A Business Model Takes Over The World
- Woot! Founder Matt Rutledge Reveals His Secret To Success
Originally posted in German by Marcel Weiss, adapted for excitingcommerce.com by Jason Soo.
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