At 1 AM EST every night? morning? something extraordinary is happening to online retail. Woot.com is an online outlet for tech overstocks and refurbs, but its unique business model is opening up some intriguing possibilities for building an installed base for a certain breed of product. The store offers one item per night at dramatically discounted prices - popular items sell out fast, and aren't replenished. A new item goes on sale the next night. The item descriptions are cheeky, the online forum is relatively uncensored, and the audience is extremely geeky (and proud of it. Though the site definitely attracts a few too many teenagers with time on their hands).
Some items are mundane - such as coffee makers and toys -- or just ordinary -- such as iPods and computer speakers. But once a week or so the site offers technology about a half generation behind, seeking an audience. This may have started out as a pure overstock play, with woot buying what didn't sell to early adopters, but it is now evolving into companies approaching woot with products they still hope may catch fire. The best example is Omnifi streaming audio players from Rockford Fosgate: one night the site offered 1,000 home/car bundles for $199, another night just the home unit for $79. In both cases company reps were in the online forum to answer questions, guage interest, and get feedback.
Tonight's woot is a refurbished InFocus ScreenPlay 4800 DLP home theater front projector. For $499. The projector sells new for $1,200, but the percentage and magnitude of savings isn't as interesting as the price point itself: at $499, front projection may be used by completely different buyers or for new applications. The online forum provides a limited method of obtaining feedback on who/how the product will be used, but feedback mechanisms could be expanded. If so, how long will it be before vendors sell a few hundred units of new products at cost on woot simply as a method of market research?
-avi
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