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Idealog—in the ideas business

The Warehouse does daily deals

The Warehouse daily deals'Where everyone gets a bargain' – that's The Warehouse's catchcry, and the red sheds are extending that philosophy by wading into the frenzy that is the daily deals market.

Today The Warehouse launches its Red Alert daily deals emails, offering time-limited retail deals. The first offers out today are Converse All Stars at $49 a pair, Mac makeup from $21 and the Apple MacBook Pro 13-inch 2.5GHz at $1,599, which sold out predictably fast.

“We’ll challenge the competition and are confident in the both the strength of our buying power and our existing experience in  bringing Kiwis bargains and the supply chain fulfilment required,” said chief executive Mark Powell.

He said the daily deals market was the fastest-growing part of the online market, having more than doubled in the last three years.
“We set ourselves the goal of being the first New Zealand retailer to enter this space, and we’re excited by the opportunity.”

The market is currently dominated by media companies and specialist websites, with GrabOne the big fish in the daily deal space.

Powell said the Red Alert service was part of The Warehouse’s ongoing investment in multi-channel sales and more direct customer engagement.
He said The Warehouse now offered virtually its entire product range online, and was aiming to be New Zealand’s largest general merchandise and apparel online retailer.

Kiwis may have embraced daily deals to start with but eventually the email barrage started to wear thin for many, leading to several daily deal aggregators springing up to cut through the cacophony and the launch of DealWorks, a site to help buyers ensure they redeem their vouchers on time.

As other daily deal sites struggle to retain our attention – international heavyweight Groupon's stock price has dropped to less than half its IPO valuation – we can't help but wonder if New Zealand's bastion of discount shopping is jumping on a sinking ship.

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Groupon is a “group buying” site, not a “daily deals” (physical products) site. While they both use big discounts and a countdown timer to drive sales, they are two completely different business models.

Selling products is a far more stable model for a new site. The Warehouse will do fine, and RedAlert may even be a loss leader, helping them bring attention to the main warehouse website, to grow everyday sales.


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