ADOTAS – Social gifting service Wrapp — founded this past fall in Sweden, distributing 1.4 million electronic gift cards in its first four months and already boasting offices in several European nations, Australia, Japan and Taiwan — launched in the U.S. today, allowing retailers to leverage Wrapp’s friend-to-friend marketing functions and, ideally, bring new customers through the door (customers who, according to a statement from the company, spend four to six times the value of the gift card they start out with).
The way it works is, Wrapp users can, through the Wrapp app, either buy gift cards from retailers or pick up free gift cards distributed in limited numbers by retailers as a promotional gesture. The app connects to the user’s Facebook account, and the user can select a Facebook friend to send a card (and, optionally, a message). It’s possible for the user to set up a gift card in such a way that other Facebook friends can contribute, too. The recipient gets a notifying message electronically (via text, Facebook message or email), and he or she can redeem the gift card either online or, in some cases, by scanning a barcode directly from the Wrapp app at the cash register in a physical store. Anyone who wants to give, contribute to or redeem a Wrapp gift card needs to register for the service, but signing up doesn’t cost anything. One of the service’s aims, said Wrapp CEO Hjalmar Windbladh in a recent phone conversation, is to “make it as simple to do gifting as it is to send a message,” and in any case, it seems to be catching on — Wrapp’s boasting over 165,000 active users around the world, with the average user sending out one gift card per week (according to a release from the company). Retailers and brands on board for the U.S. launch include Gap, H&M, the Wall Street Journal, Fab, Wayfair and Brooklyn Industries, and a statement from Wrapp said over 15 more partners are somewhere in the process of signing up with Wrapp “in the coming weeks.” And that’s all since launching in Sweden in November.
There’s some precedence for success among the Wrapp team — Windbladh had co-founded early mobile internet company Sendit, which ended up selling to Microsoft, and also co-founded mobile VoIP company Rebtel, while other members of the core Wrapp organization had helped develop Spotify’s technology. And the way Windbladh tells it, the service taps into something valuable in consumer psychology, one that makes retailers want to give away free gift cards as promotions. “They’re giving away the gift card for free because this person’s friend will come in and buy something,” he said. “They don’t have a problem, to initialize that relationship.” He pointed out brands and retailers have a means of reaching users in particular locations and age groups, for example. And he said it’s an appealing way for friends to share information about their relationships. “You’re a nice guy and you want everyone to see you’re a nice guy,” he said. “Post it to [your friend’s] Facebook wall, saying, ‘Thank you for helping me this weekend.'” The retailer can trust they have “that favored customer coming through that door,” and he added the social sharing aspect is “a great brand-building exercise.”
Elaborate on the customer targeting aspect, Windbladh explained Wrapp allows retailers and brands to find the users to whom they want to make certain gift cards available. “Instead of targeting words only, you target social profiles,” he said. “Pick the right customer, the very targeted person they’d like to reach.”
Windbladh said Wrapp is the leading gift card network in Scandinavia now — an interesting spot for a case study, as he mentioned Sweden itself has around 9 million people and 4.8 million social media users — but with the U.S., he said, “the challenge is the size of the network,” and that scope dictated the brands and retailers the company chose to work with. “All of them are very giftable,” he said.