Prepared for Purdue Entrepreneurship
Certificate Program
Team Analysis & Discussion
Spring
2007 © Hank Feeser
Woot is an Internet
commerce company based in the Dallas
suburb of Carrollton, Texas, which operates a website of
the same name. Founded by electronics wholesaler Matt Rutledge, the site
debuted on July 12, 2004, with a unique business model, offering a
single discounted product per day, instead of the wide range of choices
available through traditional online retailers such as Amazon.com. This model was evolved from Synapse Micro where products are
sold to the wholesale computer dealer market. Woot’s novel, irreverent approach
quickly attracted a robust community of customers, who share their opinions on
the site’s community forums. Product selections tend to emphasize (but are not
limited to) computer components and electronic gadgetry, all sold at closeout
prices.
Woot takes its name from the widely-used online interjection “w00t!” Each product sold is referred to as the
"woot."
Woot's tagline is "One Day, One Deal." Generally,
Woot offers one product per day, seven days a week, until its stock of that
item is sold out or the product is replaced at midnight Central time with the next offering. If a product sells out
during its run, the next item still does not appear until midnight, except
during Woot-Offs (described below). Products are never announced beforehand and
often sell out in a few hours or even minutes of frenzied buying. In contrast
to a market characterized by ever-expanding consumer choice, the Woot.com
approach relies on the elements of simplicity and surprise.
Customers may typically buy up to three of the day's item,
although the site has been known to limit product quantity to one per customer
on occasion. Woot does not reveal how many units remain available in a given
sale, but animates the "I Want One" button when 10 percent or less
remains. Woot does list how many products were available after they are sold
out.
Shipping is a flat rate of $5.00 per order, regardless of quantity
of items purchased, size and weight of purchase, or shipping destination (as
long as the destination is in the continental
United States).
The company’s marketing style runs counter to conventional wisdom
in other ways. Typically, product descriptions will mock the product, the
customer, or Woot itself. Product drawbacks are preemptively acknowledged and
buyers are advised to beware. Community users often do their own research and
post their opinions — positive, negative, or indifferent — on the user forums.
Woot often has special sales events.
The site will occasionally deviate from the one-product-per-day
model for a “Woot-Off,” where a succession of products are available for a
period of unannounced length, usually 24-72 hours. This mode is indicated by
rotating lights and a bar indicating the usually unknowable amount of product
remaining. The actual percentage of product remaining is also visible in the
Woot-Off's html source code.
During a Woot-Off, each product is replaced by a new product
within a few minutes after selling out, until the end of the Woot-Off, when a
regular product is listed for the remainder of the day. Woot-Offs often feature
items that did not sell out during regular Woot sales, often at lower prices
than originally offered. New (unique) items are also interspersed throughout
the Woot-Off, along with popular items like Bags of Crap and Mystery Brand
speakers, presumably to maintain constant interest and surprise.
Since the next item in the Woot-Off will not be listed till the
current item is sold out, posters in Woot's forums occasionally use peer pressure to advocate the purchase of the current item. Often members will
boast of buying the current item just to advance the Woot-Off. It should be
noted that during Woot-Offs, many forum members deviate from posting an honest
critique of the product and instead pump the offering, hoping readers will
quickly buy an inferior Woot and advance the Woot-Off to the next listing
In lieu of typical product sales, Woot occasionally offers the
“Bag O’ Crap” (or “BOC”), a blind grab bag that includes dollar store items and can also randomly include more expensive electronics
items. The BOC is marketed as one bag and shipping worth $5.00, and up to three
"craps" costing $1.00 each. Orders are recommended purchased in
quantities of three craps to minimize the percentage cost of shipping and
maximize the probability of getting something of greater value. The
"BOC" typically sells out within minutes of furious ordering.
Officially, the Bag of Crap is sold under the title of
"Random Crap." Indeed, Woot's Bags of Crap most often arrive in a
box, not an actual bag. Woot has also used the "Random Crap" moniker
in more targeted sales, such as a random selection of desktop and wall
calendars. Thus, a "true" Bag of Crap is only denoted by the presence
of "Random Crap" in the product title without any other descriptive
notation.
Since "BOCs" are often referenced in the Woot forums,
Woot's forum software filters the text to spell out tongue-in-cheek phrases
with the same initials, such as "Bride of Chucky" or "Beverage
of Choice." A similar phenomenon occurs when a user types
"refurb," which filters to "refurb (rox0rz!)," a nod to the
controversial popularity of refurbished woots. In the past, the term
"refurb" was changed to "Hurray! A refurb!" by the filter .
On a few occasions, Woot has partnered with another company to
launch a new product on its website. This "Launch Event," designated
by an animated rocket ship, indicates Woot is the first and only place (as of
that day) that has an available quantity of the sale product. The icon
representing the rocket is not clear to some users, and is often referred to as
the "Pope hat".
Since January 10, 2006, Woot has offered two-packs of products
every Tuesday. These products have ranged from TV games to keyboard and mouse
combos to toasters. Because a two-pack of an item is considered a single item
on Tuesdays, a customer can purchase up to six of that item for the day.
Woot is currently beta testing Woot Wine (aka wine.woot!), formally launched on Monday, May 22, 2006, with the slogan "One Week, One
Wine". They provide identical statistics to the main site, as well as the
"percentage of sales per day". The week begins on Monday.
Woot also offers Photoshop contests every weekend, with cash prizes going to the top 3
entries. The worst photoshopped entry is often awarded a "screeching monkey" prize.
Certain images recur in contest entries. "Brave Woman,"
the name of one such image, is a woman who originally appeared in conjunction
with the sale of the "Ab Tilt Abdominal Exerciser with Backrest."
As of February 2, 2006, Woot has nearly 300,000 registered users.
On 20 September 2005, a post in the Woot Blog provided several statistics about Woot sales, including the
following:
On average, 62% of customers buy 1 of an item,
14% buy 2, and 24% buy 3.
On average, 27% of sales occur in the first
hour. The next highest sales (8%) occur at 7 am Central time.
The top 5 states ranked by woots purchased per
capita are:
1.
— Nevada — 1:637
2.
— Washington — 1:828
3.
— Maryland — 1:865
4.
— California — 1:876
5.
— Utah — 1:893
On 26 July 2005 several
statistics about Woot customers were made known, including the following:
One wooter has purchased 338 products from 114
different woots.
The top spender (a different user) has spent
$16,285.62.
During a sale, clicking on the "Product Stats" tab, or
reading the first post in the product's forum page, will reveal:
the "first sucker" to purchase the
woot
the "speed to first woot" purchase
the "last wooter to woot"
a quantity breakdown, how large a percentage of
users bought one, two or three items
the percentage of woot sold during each hour
the purchaser seniority, how long they've been a
woot member
the purchase experience, how many woots each
buyer has purchased previously.
"Quality posts" — insightful comments
or questions posted by Wooters about the product. (forum only)
After a sale, the item's page in the Woot's forum will usually list
the above statistics plus:
item quantity
last order time
"Woot Member to blame" (user who
purchased the last item)
order pace
"Woot Wage" (a calculation of how much
revenue Woot made per hour based on the order pace)
On every weekday, at the same time as products are announced,
Woot.com also publishes a podcast. This podcast briefly describes the item up for
sale, and features an often-humorous song or skit relating to the product up
for sale. These podcasts are recorded by Matthew Shultz (see below).
There are several "special" podcast songs/skits that
recur periodically. These include:
Occasionally, instead of the usual song or skit, the podcast
features a "Podcast Mailbag" segment, where Matthew reads and replies
to a piece of e-mail submitted to Woot.com. Both the listener's mail itself as
well as Matthew's reply to it are often humorous and/or sarcastic in nature.
These readings are accompanied by a piano melody, and always end with the
phrase: "E-mails not answered on the air will probably not be answered at
all; therefore, if you have an emergency, do not e-mail podcast@woot.com;
instead, dial 9-1-1."
On days when Bags of Crap are being sold, the podcast features a
"Bag of Crap" theme song.
So first we take a bag
An ordinary bag
A plain old everyday type bag
There's nothing special about the bag
And then we take some crap
Just some regular old crap
A kind of crappy sort of crap
And we put it in the bag
(chorus)
B-A-G of C-R-A-P
B-A-G of C-R-A-P
B-A-G of C-R-A-P
B-A-G of C-R-A-P
Yes, we start with just a bag
An ordinary bag
A plain old everyday type bag
There's nothing special about the bag
And then we take some crap
Just some regular old crap
A kind of crappy sort of crap
And we put it in the bag!
Woot-off Song
While a Woot-off is running, a podcast featuring
the "Woot-off Song" is run.
Get out'a the way, we got a woot-off
We're piggin' out down at the Woot trough
Ain't gonna stop until the
Woot-off is done
You figure you get one woot per day
And if it's junk, well, that's just the way
But now an avalanche of Woots is released
And where there once was famine we feast
It's giving me an F5 complex
Refreshing just to see what's up next
Checking back to shop for what's new
I don't want it, but I hope that you do
'Cuz a new item won't come on
Until all of these are gone
Those are the ways of the Woot-off
We're piggin' out down at the Woot trough
Ain't gonna stop until the
Woot-off is done
Now there's another item online
A cell phone with a weird-ass design
How will this thing ever sell out?
This could start a new item drought
Who would ever buy this dumb thing
The Woot-off is so frustrating
I'm posting in the blog to decry
this thing you couldn't pay me to buy
Well you can ridicule and signify it
But someone's gonna have to buy it
Those are the rules of the Woot-off
We're piggin' out down at the Woot trough
Ain't gonna stop until the
Bluetooth the Pirate
Whenever a product related to the Bluetooth wireless technology is sold (Bluetooth USB adapters, cell phone
headsets, etc.), a special song is featured. Sung by the crew of a pirate ship,
this song tells the tale of "Bluetooth, the most fearsome pirate on the Seven Seas" and his many nefarious deeds. During the middle part of
these songs, a lone voice of dissent among the crew speaks out, complaining
that Bluetooth is a technology, and has nothing to do with pirates. The Captain
always come back with a smart rebuke. One version is as follows:
Yarr, in every man's hand a cutlass and on every
tongue a song of Bluetooth, the most fearsome pirate on the seven seas!
His stare it would give a man's timbers the
shivers,
he'd slaughter young children and feast on their
livers,
and kidneys and stomachs, intestines and tendons
and spleens
The ladies would faint when old Bluetooth came
calling,
his laughter was awful his odor appalling,
he smelled like a dog raised on naught but
bologna and beans
And everyone said he was mean as a cougar
with rabies and rugburn and armed with a Luger!
"Bluetooth phones headsets are
telecommunications accessories, a pirate's life don't enter into it!"
(Did you just take a P, lad? Cause yer makin me
irate)
His aspect was frightful,
his loins they were fruitful,
he guzzled scotch, whiskey, and rum by the
bootful,
if any man crossed him then that man was promptly
keelhauled
He wore cufflinks he fashioned from real human
bone,
and black latex hot pants and too much cologne,
he had choppers as blue as that G Gordon Liddy
is bald
Related services and applications
Community members have contributed back to the
site by offering Woot-related services. One of the popular ones is an alert
service called WootAlerts, which sends out email and SMS alerts when the next Woot product is listed.
Others include a forum to swap Woot-purchased items, an Apple desktop widget, an IRC bot that spits out the product name, and other
programs that monitor what item Woot is selling.
Woot's success has also spawned multiple
competitors and similar businesses. Sites that currently copy Woot's business
model include Steep and Cheap, MidnightBox, GoingToday, Daily Zort, Bits du
Jour and MacZot. Due to some of these sites spamming Woot's forums in the past
and also pretending to be Woot staff members, mentioning these sites in the
Woot forums will lead to the post being filter-changed. Although some
Woot-inspired sites bear striking resemblance to Woot.com in both design and
substance, Woot's only offshoot sales site is Woot Wine.
|
Title: Woot.com increased ad revenue more
than 3x by optimizing with Google AdSense.
At first
glance, the business proposition may seem dubious: sell a single different
product each day, offer little to no customer service — and make fun of the
products in the daily promotions. But Woot, Inc. does all of this, with great
results. The company's
"one day, one deal" closeout site woot.com has garnered plenty of
attention (and more than 300,000 registered customers) since launching in
July 2004. Time magazine named the company one of the "50 Coolest
Websites" in 2005. When woot.com posts its latest deal each day at
midnight, Central Standard Time, customers flock to the site to buy the
latest "Woot." Challenge
Woot, Inc.
began life as a wholesale distribution company in the early 1990s, selling a
variety of products to retailers in large volume. Creative Director Dave
Rutledge joined Woot, shortly after the creation, in July of 2004, of the
woot.com retail site. The idea was to create a website where leftover
products from the wholesale side could be sold directly to consumers. It
didn't take long for the site to become popular. Here's how
a typical woot.com sale goes: At midnight, a new product is posted to the front
page of the site with a photograph, creative description, product
specifications and price. "Distributors send us some crazy, hyped-up
information about the products they want to sell," Rutledge says.
"Our visitors already know a lot of what we're selling isn't the newest,
most advanced stuff on the market, so we throw out their copy and write our
own, poking fun of the weaknesses." For example, a recent description of
a wireless headphone system explained that "mere words cannot convince you
that the A350 sounds great, too, so we won't try." The product
description is posted as a new entry on the Woot blog and as a new thread in
its community forum. Typically customers then begin posting in the forum,
discussing whether the price is right, asking if others have used the
product, sharing previous experiences with the product or manufacturer, and
pondering whether or not they will purchase this particular Woot. If it's a
popular item in particularly limited supply, it may sell out within hours, or
even minutes. If not, or if it's a relatively expensive item, sales
throughout the course of the day may be steady. Either way, visitors keep
coming to the site, Rutledge says. If not for its advertising revenue,
Woot.com would essentially stop making money when a product sells out. Rutledge
had previously participated in Google AdSenseTM with his own blog.
"After that, it stuck in my head as the right way for this kind of thing
to work," he says. Now AdSense provides supplemental income for woot.com
while providing relevant information for the site's visitors. "Our
store's a little strange in that when we sell out of something, we don't sell
anything else for the rest of the day," Rutledge explains. "In the
forums, the early discussion is all about the product, finding reviews,
comparing prices. After we sell out, you get people in saying 'Oh no, I waited
too long' and asking about any similar products around. AdSense works great
for both groups: early people can find other places to compare to, and later
people who miss the deal can still find the product elsewhere through the
Google ads."
Results Rutledge
placed a 336 x 280-large rectangle ad unit below each post. He was surprised
at the resulting increase in revenue. "I hardly ever have a reason to go
to that individual blog post entry, so it hadn't occurred to me that people
were viewing it," Rutledge says. "That implementation boosted our
revenue from $40 a day to $150 a day. It now seems there are a ton of people
who click this ad because it's what they see after reading the post." Forum
optimization Site
targeting Advertise
on Woot Most
recently, Rutledge added a 250x250 square to the front page of Woot.
"Our front page gets 5-10 times the hits of the other pages, but we knew
the clicks would be low. When we heard about the site-targeted ads, it made
sense to try. Now we have companies writing ads specifically for our users,
with some even using a similar bluntly humorous style to draw their
attention." The new adblock tripled Woot's ad revenue again. During
Woot-offs, (48-72 hour stretches where Woot sells one item right after
another, which triggers many front page impressions), daily revenue has been
up to 10 times higher than prior to AdSense. Sitemaps Better
experience for users About
Google AdSense |