Woolworths launches daily deals site after boom, but experts say opportunities continue to grow

Retail giant Woolworths has launched a new daily deals site more than a year after the initial boom began, but experts say there are still opportunities for savvy companies to pick up on demand for cheaper products online.

The soft launch of Woolworths’ new site, Doorbuster, joins efforts from a number of other major companies including DealsDirect and Harvey Norman, which have already set up daily deals sites in the past year.

But while some have criticised the site for being behind the other major industry efforts, Telsyte senior research manager Sam Yip says there are still plenty of opportunities, especially for large bricks and mortar sites.

“If you look at the daily deals sites that are already out there, they’re basically discounting whatever they want, and they’re selling whatever is hot at the time. But for Woolworths, it has significant brand recognition and is playing a different game.”

“I don’t think Woolworths is competing directly with the other sites. I think they are just utilising what they have online and are doing something with it.”

Certainly, Woolworths differs from other daily deals sites in that it doesn’t offer a specific deal of the day that is unattached to the other products on the site. Whereas Catch of the Day sells a new type of product every day, Woolworths is selling what appears to be stock already available on store shelves.

Many of the products include food items such as chips, soft drinks and other non-perishables, many for a significantly cheaper price than customers can find in-store.

Woolworths head of online deals Nigel Hancock told the Australian Financial Review today that the company will only sell products it has on hand.

As a result, it can offer next-day shipping, which differentiates it from the competition. And as Yip explains, it’s a smart move to take care of excess inventory the company already has to get rid of.

“If you look at smaller sites, they try their best to sell products that are branded rather than just random products. It’s all about the brand.”

“I think this move is a good one, especially for a lot of these other retailers, as they already have all this stock available.”

Yip also disagrees with the notion the daily deals market is petering out. While smaller companies have fallen away, he says the larger mainstays will remain dominant for some time, and there will be plenty of room for growth from some of the larger department stores.

In fact, sales last year were estimated to reach $450 million, and that is set to grow even more this year.

“There was a boom of deals, but that’s going to continue. It’s a natural progression for companies like Woolworths. It’s all about providing range, and it makes sense as a promotional channel, and a clearance channel as well.”