Can Social Gifting Give Retailers a Boost?

Dear Facebook Friends,

Have you noticed I’ve been spending an unhealthy amount of time obsessing over the upcoming French presidential elections? And not nearly enough time shopping at H&M? A mobile gift card would help fix that. If you’d all chip in a couple bucks, I’d be well on my way to “paparazzi chic.”

Gifting for Cheapskates

Ah, yes, social gifting. This e-commerce fad has been getting a lot of attention this week with the launch of Wrapp in the United States. The Swedish company behind Wrapp makes it easy to give electronic gift cards to Facebook friends. The thing that sets Wrapp apart from other social gifting sites (such as Karma), is that the gift cards are free… if you fit the store’s target demographic… and are a total cheapskate.

Let’s say I want to thank my friend Kellie for watering my houseplants. Wrapp will peruse Kellie’s Facebook data (demographic and geographic) and offer a list of gift card options. If she fits Gap‘s target audience, the store might offer up a free $5 gift card. And H&M might want Kellie’s business so much they’re willing to give a $10 gift card.

Wrapp allows the gift giver to go the freebie route (free $5 gift card), generous route (bump up the value to $25 or whatever you feel like giving), or social route (combine efforts with Kellie’s other Facebook friends so that she can afford to clad herself in head-to-toe paisley).

A Social Way to Drive In-Store Sales

Wrapp encourages people to use “casual gifting” for any low-key situation in which a simple email, Facebook wall post, or text message would have once sufficed. At its basic, free level, it’s a no-pressure gift for both the giver and receiver. But why would retailers be willing to give away $10 gift cards?

“If you’re a brick-and-mortar retailer, you’re looking for much more efficient ways to drive sales in stores,” Wrapp CEO Hjalmar Winbladh said in an interview with CNET.

Wrapp provides that. It’s also a cheap way to engage in targeted marketing and it offers brands a good chance of getting social mentions on Facebook walls.

The Future Is All About Sharing

CNET’s Rafe Needleman rightly questions whether Wrapp is really gift giving or more of a”gift-like gesture.” Either way, the idea has gotten a lot of attention (and money) from venture capitalists.

“The thing that struck me as unique and interesting about Wrapp is that it is kind of the intersection of three trends: gift cards, social networks, and mobile (shopping),” Reid Hoffman, a cofounder of LinkedIn and a partner at Silicon Valley venture-capital firm Greylock Partners, told the Chicago Tribune.

A lot of predictions about social commerce taking off on Facebook have fallen flat because people aren’t in shopping mode on Facebook. But Wrapp is different in that it merely uses Facebook as a conduit for gift giving.

Also, social gifting fits with the recent trend of people sharing product and purchase information with friends. If I know you’re always shopping at H&M and that you have a birthday coming up, Wrapp is an easy and cheap way to make your day. While the demographic profiling that comes along with it is somewhat creepy, it’s a price many people will be willing to pay for this season’s must-have paisley.

Watch the Reporters’ Roundtable interview with Wrapp’s CEO at

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