The Art of Social Gifting

Retailers get on board with latest social trend

Retailers are always looking for new ways to reach customers, and the race to get onto Facebook walls and news feeds to increase brand exposure has never been greater.

But instead of shelling out dollars to pay for traditional Facebook ads and online banners, many companies are allowing shoppers to do the grunt work for them in an organic way. One of the latest trends is combining social sharing with gift giving, so consumers can send presents — from gift cards to apparel — to others via Facebook.

Brooklyn, N.Y.-based apparel retailer Brooklyn Industries, which has 12 stores in New York, one in Chicago and another in Portland, Ore., as well as an e-commerce site, is among the list of merchants embracing social gifting. In April, it partnered with Swedish-based social gifting app Wrapp, which allows users to send free virtual gift certificates to friends on Facebook. Yes, free. But there’s a catch: A friend has to meet the brand’s target demographic criteria.

“In the past, we tried doing a few offers with Groupon, but it wasn’t attracting the most optimal kind of customer for us,” a Brooklyn Industries spokesperson said. “We liked that free gift cards were sent between friends, and that would get a lot of exposure on Facebook. Since our mobile efforts are still in the works, we saw it as an entryway to that touchpoint.”

The gift certificates — which are usually valued at $5 to $10 — can be posted on a friend’s Facebook wall or Timeline, along with a personal message such as “Happy Birthday!” (Users can add more money to the card to increase its value). To do so, the Wrapp app must be downloaded to an Android or iOS device.

Retailers determine the base value of the card and whom they want to target based on gender, age and location. Recipients who match those demographics can receive a free gift card, which can be redeemed online, via a mobile device or in stores.

On average, those with a Wrapp gift certificate spend four to six times its value.

“We are tying together gifting, social and mobile in an intuitive and fun way, and it’s working,” the Brooklyn Industries spokesperson added. “As payments — and commerce in general — proliferate into the mobile arena, it’s only natural that gifting would grow. It’s important to jump on that wave right now.”

Wrapp — which touts former H&M CEO Fabian Mansson as company chairman — first launched in Sweden in November, and has since expanded to the United States, Norway, the U.K., Germany, France and the Netherlands. It boasts a strong lineup of retailers in addition to Brooklyn Industries, including Gap, H&M and Sephora. (Wrapp only gets paid by merchants when a gift card is redeemed.)

Wrapp CEO Hjalmar Winbladh noted that although the gift-card market recently held steady amid a sinking global retail economy, innovation within the category was stagnant.

“Nothing changed about gift certificates in 50 years — except that paper cards turned into plastic — so there was room for innovation, especially within the social space,” Windbladh said.

Retailers aren’t the only ones getting in on the trend. Facebook — which is ramping up its own mobile strategy — acquired social and mobile gifting app company Karma the same day it went public in May.

Karma users can purchase and send gifts from brands such as Kate Spade and Jonathan Adler in the form of a text, Facebook message or email.

“This is just the beginning of how companies with products and services will leverage the massive audiences on social networks,” said Susan McKenna of Long Beach, Calif.-based social marketing firm McKenna’s Marketing. “Social gifting has an innately viral component to it — people will see it pop up on Facebook walls and want to give gifts to their friends too. It will likely become more popular by the holiday season.”

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