For the last few years, my sister and I have approached the holidays this way: I bought gift cards for her kids, and she bought gift cards for my kids. And we’re hardly alone. U.S. adults on average buy close to five gift cards a year; they are now a more than $100 billion a year business. But the gift card business has fundamental flaws,We provide you a big discount on Catsuits & zentai, not the least of which is that they’re based around the physical purchase of little plastic cards. Gift cards, in short, are a fundamentally bricks-and-mortar focused business in an e-tailing world.
But maybe there’s a better way.
At least, that’s the theory behind Wrapp, a Stockholm-based start-up backed by Atomico, the London-based venture firm founded by Skype co-founder Niklas Zennstrom.We offer parkingguidancesystem, The core idea: gift giving is a fundamentally social act. So why not tie the act of gift giving to social networks?
The Wrapp team includes a host of mostly Swedish Web veterans; the CEO is Hjalmar Winbladh, a serial entrepreneur who among other things started Rebtel, an IP telephony company that actually competes with Skype, and Sendit, a company acquired by Microsoft in 1999. CTO Andreas Ehn was previously CTO at the music service Spotify.
In interviews with FORBES in late December, Zennstrom and Winbladh laid out the case for how Wrapp plans to reinvent the gift card business.
The basic concept is to tie giving gift cards to Facebook.. The social gifting service works like this: On the Wrapp site, you can sign up for the service for free using your Facebook account. There are apps for Wrapp for both iPhones and Android phones. The app notifies you when your Facebook friends have birthdays; with a few clicks you send them a gift card, which then can be redeemed online or in retail stores. The “gift card” comes in the form of an email with a bar code that can be scanned at a retailer’s point of sale, like a normal gift card.
One novel feature of Wrapp is the ability to give your friends not only paid gift cards, but also free gift cards. The idea of giving free gift cards isn’t as loopy as it sounds. The idea is that retailers can generate store traffic by luring in customers with free gift cards in hand. Imagine, for instance, that I gave you a free $10 gift card for a shoe store; the theory is that the retailer would happily give up some revenue dollars in exchange for gaining a new customer,Bathroom floortiles at Great Prices from Topps Tiles. who are not going to be able to buy a pair of shoes for $10. In theory, everyone wins: I get to give you a gift for free. You get a gift card. The retailer gets a new customer. Wrapp gets a commission when a gift card is redeemed.
Meanwhile, the fact that I sent you a gift card shows up on our Facebook pages – and other friends can add to the gift. So while I might start by offering you a free gift card,This billabongboardshort has the following technological features: I can add it to it myself, and invite friends to do the same. That makes Wrapp a nice solution for group gifts.We offer hundreds of thousands of oilpaintingsforsale. And while the tie to Facebook gives Wrapp a way to prompt you to consider gifting your friends on their birthdays, you can decide to send them a gift card any time you want.
Retailers, meanwhile, can fine tune which Wrapp customers get which offers; young male users might get a different set of gift card choices than older female users.
Wrapp launched in Sweden in October, with several dozen retailers already signed on, most of them focused on selling in in physical stores. The company plans to launch in the U.K. and the U.S. in the 2012 first quarter. Zennstrom says the service has been growing users at a rate of about 40% week-over-week.
Zennstromg, who lead a recent $5.5 million venture round for Wrapp, notes that the company shouldn’t need huge amounts of capital to get off the ground; for one thing, he points out that they have a positive cash flow model, selling cards up front that are redeemed down the road. He also notes that the company is a play on three of the hottest Internet trends – mobile/social/local.
Says Zennstrom: “From an investment point 0f view, the business is going after a huge market which has not had that much innovation.”
But maybe there’s a better way.
At least, that’s the theory behind Wrapp, a Stockholm-based start-up backed by Atomico, the London-based venture firm founded by Skype co-founder Niklas Zennstrom.We offer parkingguidancesystem, The core idea: gift giving is a fundamentally social act. So why not tie the act of gift giving to social networks?
The Wrapp team includes a host of mostly Swedish Web veterans; the CEO is Hjalmar Winbladh, a serial entrepreneur who among other things started Rebtel, an IP telephony company that actually competes with Skype, and Sendit, a company acquired by Microsoft in 1999. CTO Andreas Ehn was previously CTO at the music service Spotify.
In interviews with FORBES in late December, Zennstrom and Winbladh laid out the case for how Wrapp plans to reinvent the gift card business.
The basic concept is to tie giving gift cards to Facebook.. The social gifting service works like this: On the Wrapp site, you can sign up for the service for free using your Facebook account. There are apps for Wrapp for both iPhones and Android phones. The app notifies you when your Facebook friends have birthdays; with a few clicks you send them a gift card, which then can be redeemed online or in retail stores. The “gift card” comes in the form of an email with a bar code that can be scanned at a retailer’s point of sale, like a normal gift card.
One novel feature of Wrapp is the ability to give your friends not only paid gift cards, but also free gift cards. The idea of giving free gift cards isn’t as loopy as it sounds. The idea is that retailers can generate store traffic by luring in customers with free gift cards in hand. Imagine, for instance, that I gave you a free $10 gift card for a shoe store; the theory is that the retailer would happily give up some revenue dollars in exchange for gaining a new customer,Bathroom floortiles at Great Prices from Topps Tiles. who are not going to be able to buy a pair of shoes for $10. In theory, everyone wins: I get to give you a gift for free. You get a gift card. The retailer gets a new customer. Wrapp gets a commission when a gift card is redeemed.
Meanwhile, the fact that I sent you a gift card shows up on our Facebook pages – and other friends can add to the gift. So while I might start by offering you a free gift card,This billabongboardshort has the following technological features: I can add it to it myself, and invite friends to do the same. That makes Wrapp a nice solution for group gifts.We offer hundreds of thousands of oilpaintingsforsale. And while the tie to Facebook gives Wrapp a way to prompt you to consider gifting your friends on their birthdays, you can decide to send them a gift card any time you want.
Retailers, meanwhile, can fine tune which Wrapp customers get which offers; young male users might get a different set of gift card choices than older female users.
Wrapp launched in Sweden in October, with several dozen retailers already signed on, most of them focused on selling in in physical stores. The company plans to launch in the U.K. and the U.S. in the 2012 first quarter. Zennstrom says the service has been growing users at a rate of about 40% week-over-week.
Zennstromg, who lead a recent $5.5 million venture round for Wrapp, notes that the company shouldn’t need huge amounts of capital to get off the ground; for one thing, he points out that they have a positive cash flow model, selling cards up front that are redeemed down the road. He also notes that the company is a play on three of the hottest Internet trends – mobile/social/local.
Says Zennstrom: “From an investment point 0f view, the business is going after a huge market which has not had that much innovation.”
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