Social Gifting Is Booming On Facebook

We all know the five-second reaction to seeing a friend’s birthday on Facebook — a basic greeting posted to their timeline. What if you want to do more? Several companies are filling the gap and making a statement with social gifting, allowing people to give real-life presents to their friends. While entities such as Wrapp and Gifties are getting a foothold in the market, Facebook announced Thursday the launch of Gifts, a native program where users can give things such as Gund teddy bears, Starbucks gift cards, and Star Wars flash drives.

Social gifting has been rapidly growing in popularity. In May, Facebook purchased gift card application Karma. Many figured that this move was a precursor toward bringing more social commerce onto the site. Now that Facebook released Gifts to the world, it’s easy to see why the purchase was made.

Through Gifts, users can seamlessly select a friend and buy a gift for them, through Facebook. Gifts is rolling out gradually, first to U.S. users, then throughout the world.

Facebook’s Lee Linden, the founder of Karma, discussed Gifts with The Verge:

One of the challenges with sending physical gifts is that you have to know someone’s address, shirt size, or the flavor they like, or you guess and then you’re wrong. We’ve turned that on it’s head, removing the friction of sending somebody a physical product … People want to send gifts the moment they think of someone, but you might not always be able to pull out your credit card right then.

The action appears next to Post and Photo options, above the prompt to write on a person’s timeline. The friend then fills in their address to receive the real-life gift (unlike SuperPoke, these presents are real). Facebook also prompts users to give gifts when they click on a friend’s birthday announcement in the top-right corner of the news feed.

But this is hardly a new development. Prior to Facebook’s Gifts, Wrapp (founded May 2011, introduced to the U.S. in April 2012) and most recently Facebook game Gifties have launched to connect friends with presents. There’s also Treater and Giftly, in addition to Amazon’s program. Gifties, a product of Toluna, started earlier this month and centers more around birthday gifts, although users can send items to friends regardless of the day. Unlike Wrapp and Gifts, Gifties is a game where users can virtually send a gift card, cookies, or a hotel stay to a friend and it can randomly become a tangible item. The more gifts they give, the more of a chance they have to become real.

However, all three entities want to represent a way that brands can become a part of the conversation between friends. Wrapp Co-Founder and Chief Operating Officer Carl Fritjofsson noted to AllFacebook that a message or a gift card giveaway that comes from someone you know holds much more weight than a brand simply emailing an offer for $5. Fritjofsson said Wrapp has a global brand cache of 180 retailers in eight markets and growing — including H&M, Levi’s, Dockers, Gap, and Sephora. Preliminary glimpses at Gifts show that Facebook has at least Gund, Magnolia Bakery, 1-800-Flowers, and Starbucks so far. Gifties drops items from United Airlines, Starbucks, and Sephora, among others.

Fritjofsson told AllFacebook that he sees the multibillion-dollar industry of gift cards going digital, with iPhones and Androids taking over for plastic and paper. Wrapp was developed on open graph, so users of this application have the database of their entire Facebook friend list. It doesn’t just have to be for birthdays, Fritjofsson said. He noted that Wrapp can be used for small things, such as returning a favor.

For consumers, it’s all about casual gifting, as well as significant gifting. From a retailer’s prospective, it’s generating store traffic through very genuine and friend-to-friend contacts. Facebook is essential to the way that we built our platform. I think that gifting, as a phenomenon, is just huge. Part of gifting is going digital. We’re confident that gifting is going digital … Gifting is something that is very personal, it’s very emotional, and then there’s genuine attachment to it. We think that social gifting is definitely going digital, and Facebook is the natural way to facilitate that, because of the friendship graph.

 

Wrapp differs from Gifts and Gifties in that users can send base gifts for free, such as a $5 virtual gift card to Office Depot or Banana Republic, and then add value on top of that if they want.

Fritjofsson, who was mainly responsible for bringing Groupon to his native Sweden, sees Facebook’s Gifts as more of a social commerce vehicle than a true social gifting venture. He told AllFacebook that the biggest question he has regarding Gifts is whether or not the company will continue to be an open platform for partners, or if it will close down social gifting and become a competitor. There’s lots of money flying around Facebook, facilitated by programs that were built on the site’s platform. There could come a time when Facebook will want that cash flow going through the social network.

Wrapp is different in many aspects of this, primarily as we allow users to send gifts of real value for free to celebrate your friends for any occasions — big or small. Wrapp is also 100 percent digital which means the gifts are delivered in real-time as the celebration greeting is sent to the recipient. Also, at the moment, Facebook Gifts doesn’t appear to be offering gift cards, which is what Wrapp is really all about, but considering the gift-card market is projected to exceed $100 billion this year, I’m pretty sure the opportunity is too big for it to ignore. For retailers, Wrapp is also providing a totally unique marketing platform, rather than a sole ecommerce sales channel.

Readers: How often do you use a social gifting program to give a present to a Facebook friend?

Main image courtesy of Shutterstock. Other images courtesy of Facebook, Gifties, and Wrapp.

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