Top retail brands have signed up to a new app, which encourages social gifting, to drive traffic and sales through their stores and online.
Wrapp is a new performance-based marketing channel, which promotes friend-to-friend giving. It has been introduced in the UK, following its launch in Sweden in October 2011.
Retailers including Oasis and Warehouse and lifestyle brands such as Fitness First, Pizza Express and Glamour magazine are already on board.
Wrapp enables consumers to give free sponsored gift cards to their friends.
Users download the app, which is available for Apple and Android platforms, and connect it with their Facebook friends.
The app enables users to send a gift card for their chosen retail brand to a friend to celebrate a birthday, for example. Gift cards are displayed on the recipient’s Facebook wall, encouraging comment from others. Friends also have an opportunity to pay and top up the value of the original gift card.
According to Fabian Mansson, co-founder and chairman of Wrapp and former CEO at H&M, Wrapp is a new marketing channel designed to drive traffic and sales to stores and online.
In Sweden consumers are reported to be buying four to six times the value of the gift card.
Critically, the retailer only pays for performance, Mansson says.
“It’s very targeted, pay-for-performance marketing, so retailers are saying, “great, sign us up”. In Sweden 1.5m gift cards have already been sent, so it’s very viral – consumers are really liking it,” he says.
The gift cards typically have a 30-45 day lifespan and there is no retailer liability if they are not used by the customer.
Senders can also remind recipients to open the gift card and, once receivers have the app themselves, the reminders are automatic.
According to Mansson, this ensures a high conversion rate. The consumer view of the service is also a ‘win win’, he says.
“In the eyes of customers, it’s not a discount but a gift – the perception is much nicer. It’s not a retailer pushing out the message but friend-to-friend giving. Plus, retailers are getting added exposure on Facebook.”
Concerns consumers would only redeem the value of the card have not materialised. However, the app enables retail brands to tailor incentives to target specific customer segments.
In Sweden, for example, leading sports retailer Stadium recognised women in the 15-20 age bracket spent less than those aged 30-40, who buy for families and husbands. Therefore it provided a lower incentive for 15-20 year olds and a larger incentive for older shoppers.
“Things like that are really interesting from the brand’s perspective,” says Mansson.
Women are not the sole target market either. Swedish DIY and electricals chain, Clas Ohlson, for instance, has also signed up to Wrapp and appeals to male shoppers
Mansson says the app was inspired by the number of people sending congratulatory birthday messages via Facebook.
“We wanted a way to take that and give something of value. Marry smart phones with social media ie Facebook and with sponsored gift cards and you’ve got Wrapp; plus the add on of topping up. It’s making gifting an every day event,” he says.
Retailers are also using the service to reward their Facebook fans, he says. In this vein, users are effectively becoming ambassadors for retail brands. Brands are also using the service to cross promote. Glamour magazine and Oasis, for example, are featuring gift card rewards on each other’s Facebook pages.