The Advantages of Social Gifting

With the New Year upon us, there are of course more things to learn including a concept called Social Gifting.

It’s very simple. Social Gifting is gifting on a social platform.  In even simpler terms, it means giving your Facebook friends gift cards.  The company that is at the forefront of Social Gifting is a gift giving service called Wrapp.

This Swedish founded company was created by a team of digital heavy hitters that helped launch Groupon, Spotify and SoundCloud.  This gift giving service partners with retailers who may offer free and paid gift cards.

Watch the video above to see how Wrapp works.

Now why would retailers want to give away free gift cards?

To them, services like Wrapp are very much a marketing tool. It is less intrusive than more traditional marketing tactics and it has the added “trust” component of receiving the brand through a friend.

Let’s go over some of the advantages of Social Gifting. An obvious advantage for Social Gifting is greater reach. Every gift given to your Facebook friend has the potential to have that interaction posted on their timeline. Their friends see that interaction and of those friends another may use the service thus showing their own friends, and so forth. It is the gift that keeps on giving.

Also, retailers like Social Gifting because there is greater spend potential.  More often than not, consumers will spend more than the value of the gift card at the store.

Of course with a new concept, there are always disadvantages.  For one, Social Gifting is still a fairly new idea. Wrapp only came into fruition in 2011.  Social Gifting might not actually take off until more people know about it.  For small businesses, they may run into the same issue that they have had with Groupon and other daily deal services which is whether they will even make a profit once the gift giving provider takes their cut. They also might not be able to deliver the promised service due to high consumer demand.  Another potential hurdle could be the question of repeat customers. According to a survey provided by Manta in October 2012, only 3% of small business owners polled received business from repeat customers through a daily promotion.
There are quite a few factors to consider regarding Social Gifting. Whether this new service is here to stay warrants further discussion. I can see this type of service expanding as we move closer to a greater adoption of digital media and as Social Gifting sites gain more recognition. I can also see backlash that could occur after awhile among those that miss the sentimental value of more personalized, singular gifting.



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