What is Social Gifting and Why You Should Pay Attention
Social gifting is one of the fastest growing trends in the retail marketing space. In fact, Starbucks is expecting social gifting to take up as much as one fifth of all its gifting revenues in the very near future. Industry experts believe that social gifting is poised to explode and become one of the largest commercial internet sensations of the year.
What exactly is social gifting – And why is it exploding in popularity so quickly? Let’s explore this new medium in detail.
Social Gifting: What is it exactly?
Social gifting is a platform through which people can give other people gifts through social networks. These gifts can come in the form of gift cards, or for goods directly.
For example, say it’s your sister’s birthday. She lives in Spain and you don’t want to go through the trouble of asking her for her address and making sure a package that you send her actually makes it there. Instead, you just send her a $20 Starbucks gift card – All through Facebook.
Many of these services also allow you to pool your money with other people. For example, let’s say it’s your father’s birthday. Individually, you might be willing to contribute $100 for a gift. However, instead of buying a $100 gift, you use a social gifting app to co-ordinate contributions from other family members as well. At the end of the day, you buy your father a brand new $750 laptop.
Social gifting takes the hassle out of giving people gifts. You no longer have to walk down to a store and purchase a gift certificate, then wrap it up and wait to give it to someone by hand. You no longer have to make dozens of calls and send dozens of emails to co-ordinate an expensive gift. Social gifting hands all of this for you.
Today’s social gifting is still in the very early stages of development. The technology can do everything it claims to do, but still lacks many of the bells and whistles. With millions of venture capital dollars flowing into this budding industry however, it’s only a matter of time before advanced features start to surface. As of now, there is no clear industry leader just yet.
Gifting Joins the Smartphone World
Another reason that social gifting is growing so quickly is because of smartphones. People who impulsively want to give away a gift can do so using a smartphone.
For instance, say you’re doing a talk for your local chamber of commerce. You decide spontaneously that you want to give away a $20 gift card for the person who asks the best question. You can do that on the spot, from your phone, without having to ask the other person to watch for it in the mail.
Smartphones are exploding in popularity and are a critical part of the social gifting movement. While some of the social gifting companies currently only work through the browser interface, many of them work on both iPhone and Android. Those that don’t have apps in the app stores are quickly developing apps.
Why Are Retailers So Excited About Social Gifting
Why is it that retailers are so excited about this new form of gifting? Why are large retailers, who are traditionally slow to take up new technologies, actually spearheading this new development?
It’s because it costs retailers almost nothing. Traditional gift cards cost money to print. It costs money to hire the people who stand there and sell you the gift cards. It costs money to market the gift cards.
With social gifting, all the marketing cost is handled by the social gifting company. No cards have to be printed because it’s all handled digitally. Nobody needs to handle the actual transaction by hand, since it’s all automated by computers.
In other words, it’s all free money for the receiving company. They don’t need to do anything to bring in the revenue. It’s as close to a perfect marketing avenue as they can get.
That’s why so many traditional retailers like Best Buy and Starbucks are not only participating in social gifting, but they’re actually investing in social gifting companies. They’re putting millions of company dollars into these companies to help ensure that they grow quickly.