The Rise and Fall of Gimmicky Retail

As I’m out looking for the best deals, I’m often intrigued by all of the gimmicks that are out there to entice shoppers to use their service.

What led me to develop this concept into an update for all of you is the new website Wujwuj, which I found out about here through the great blog TechCrunch. While the site is not operational yet, they work on a very interesting “Group Buy” system. The idea is that a retailer offers an item for sale and as more people agree to buy that item all of the members get a discount on it. It’s basically buying in bulk on a bigger scale.

The interesting development that this site plans to implement is a set of social networking tools that will allow you to tell your friends about what you want to Group Buy on things like Facebook, Twitter and MySpace. The user’s goal is to get more people to buy the same item to drive the price lower. Obviously, the store gets greater revenue and more sales. It also allows them to have viral marketing work for them with very little effort on their side. The users are doing all the work.

It will be interesting to see if this will catch on or if it will close down like the ill-fated Jellyfish.com. Jellyfish.com worked on a reverse auction system. Their would be a series of “shows” in a variety of product areas, like video games, clothing or sporting goods. They would start the item at its retail price, and the price would slowly come down overtime. Eventually, people lock in their price, and when the item has sold the allotted amount, the next item would come. This was an interesting concept, but I found the prices were never low enough for me to justify a purchase. I would also be worried about missing the best price by jumping the gun and buying the item too soon.

The last item I’ll mention are the copious “Deal of the Day” sites. These sites, Woot.com is probably the most famous offer one item at a time, usually in daily intervals, but not always. However, it can be difficult to track the large numbers of these sites. One good tool that I use for doing just that is DODTracker. (I actually prefer this link that gives you all of the items on a long list.) You can simply scroll down and see what site is offering what items that day. I find that there are some good deals, but there is also a lot of junk that most people would not be interested in. (I’m looking at you USB Foot Warmer)

It will be interesting to see if sites like these manage to flourish in this tough economy or whether they will go extinct like the Jellyfish.

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