Though last year’s major online trend was group discounts, this year, the shopping fashion has turned to a more giving direction with social gifting on Facebook.
Gifting has caught the attention of social media marketing and retail experts alike, as individuals get together on their favorite platform and purchase presents for one another.
Wrapp, a startup based in Sweden, has only just launched its American business on Monday, and has been receiving millions in venture capital dollars as some of the top retailers, such as Starbucks Corp., Gap Inc., and Best Buy Co. Inc. all rush to take part in it.
According to chief executive Hjalmar Winbladh, at Wrapp, “Brick-and-mortar retailers are all looking for new, more efficient ways to drive sales into stores without diluting their brands … we wanted to really see how retailers can leverage the megatrends of smartphones and social networks.”
Wrapp is an application that can function on regular desktop PCs, as well as smartphones and tablets.
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When this application has been installed, it becomes a social media marketing tool that allows Facebook users to purchase gift cards for each other from the retailers participating in the program. They can either purchase the cards individually, or team up and buy them together. These gift cards can be redeemed both in-store as well as online at the commerce websites.
Retailers find this type of program highly appealing because it is very inexpensive and because customers will frequently make larger purchases once they are actually inside the store and looking for something to buy.
According to Wrapp, over 165,000 active users have used social gifting to buy more than 1.4 million gift cards which are redeemable at over 50 retailers across Europe, since the middle of November 2011.
LinkedIn cofounder, Reid Hoffman, who is also a special partner at the Greylock Partners venture capital firm in Silicon Valley, stated that what he found notable and unique about Wrapp was that it brings three major trends together: mobile commerce, gift cards, and social networks. The result is a social media marketing opportunity that has the potential to become exceptionally popular and successful.