The company offers free and paid gift cards from partners such as Sephora, GameStop and Banana Republic to its customers. The service revealed in February that it grew to more than 1 million users in just 14 months — and less than a year in the U.S. — and that 90 percent of all of its usage happens on smartphones.
Winbladh took some time o chat with The Washington Post from the Wrapp home base in Sweden (the company has its U.S. offices in San Francisco) about the future of social gifting and mobile payments. An edited version of that conversation is below.
How did Wrapp get started? Why is this the right time for this service?
I’m a mobile Internet veteran; I’ve done this since 1994. But a lot has come together over the last year. The technology and availability for consumers to interact using their mobile phones has really come together.
Now there are really fine solutions, both for retailers and for social gifting [companies] like Wrapp to find something that was mutually beneficial for retailers and consumers.
Can you describe those benefits and how Wrapp delivers them? How have consumers reacted?
Everyone likes free. That’s good for the consumers.
From a retailer perspective, [offering free gift cards] can drive transactions into both brick-and-mortar and online stores. In fact, it’s especially good for brick-and-mortar retailers looking for ways to drive consumers into stores, and then to build on that with a good experience to increase sales.
People have really taken on casual gifting. It creates a new kind of gesture; it lives in the space between a text message or poke and a gift. It’s an interesting space to be in, since it’s free for you to give a gift. We’ve been very happy that we’re seeing an inflow of partners, including with Sephora, H&M and the Gap.
Are the retailers you approach completely on board with the idea of essentially giving away free gift cards?
Pretty much all retailers we’ve talked to are intrigued by the idea and the opportunity. They’re mostly concerned with whether they can drive sufficient volumes into stores. We’ve shown that we can drive a fair bit of volume to retailers. In our best week we had 1 million gifts being sent per week. That’s a pretty massive number for a new service.
Facebook has also jumped into this space, after buying the gifting start-up Karma. Your service relies on Facebook’s network; how does their move affect companies like Wrapp?
Facebook has quite a different spin on social gifting. It’s more of a social e-commerce business — to have you buy items and have them shipped to your friends. Also, we offer free gifts versus paid gifts — which is a big difference. It’s the same space, but with a different business model.