The Official Merchant Services Blog keeps its finger on the pulse of ecommerce, and recognizes the latest hot trends by staying ahead of the technology curve. Trending now is Social Gifting, the activity where consumers on social media channels like Facebook can individually, or in groups, purchase gifts for friends. Virtual Gifting, the act of giving someone a gift through an app or a website, and Mobile Gift Cards, a card sent via email, Facebook or text, were recognized as being on the cutting edge last year. Social Gifting is just the latest mutation in the process, adding in the social media and group aspect to virtual gift technology.
What prompted Social Gifting's quick rise in media coverage? Swedish start-up Wrapp launched a U.S. version of its application with 15 high profile merchants, including H&M, Gap and Sephora. Wrapp takes the form of a mobile app for iOS or Android that you download and connect to your Facebook account. You can then send gifts or promotional gift cards to people within your network. There is also a web version of the application. Since launching in November 2011, nearly 180,000 people have given their Facebook friends more than 1.5 million free promotional gift cards for nearly 60 major retailers, according to the company's background information.
Wrapp cites its biggest strength is that the practice of social gifting often results in sales much larger than the original gift, each sale averages four to six times the value. An alluring idea that many retailers will find an attractive marketing tool. But there are some serious concerns, as retailers still feel burned by the rise of the spammy empire that is "the daily deal." Groupon and its legion of imitators have helped undermine prices for some businesses, especially small ones, and downright burned others, when they could not keep up with the opportunistic one-time customers acquired through the big one-time deals that trended in 2011. Leaving many businesses unsure in terms of social gifting, since the daily deal empire was also built through social media outlets like Facebook and Twitter.
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