The Anti ‘Groupon’ App
Tech start-ups spend a great deal of time these days trashing Groupon, the company that brought daily deals to the forefront of the industry. Companies around the world have been criticizing Groupon for their dearth of control within the company, outsized spending and shady accounting practices. Detractors have also said they feel Groupon has become a lynchpin for consumers that aren’t interested in creating a relationship with a retailer, but only pilfering their cheap, Groupon-fueled sale and never returning. Groupon is adamant that their hot deals create repeat business, and most people aren’t buying it. Well, a new Swedish start-up that calls itself the anti-Groupon is putting their money where their mouth is, with a new app release they feel will benefit retailers and consumers alike. The app is called Wrapp.
Hjalmar Winbladh, the entrepreneur behind Wrapp, is quick to point out that it is not yet another Groupon knock-off. Instead of focusing on daily deals, it has been designed for social gifting in the mobile space. Wrapp basically encourages their users to give gifts to relatives, friends and business associates on whatever occasions are appropriate. It is built with Facebook’s social graph, but while people often give e-cards to acknowledge a birthday or special event, with Wrapp they can give actual e-gift cards, easily redeemed through their mobile devices. And major corporations are taking notice. Wrapp already offers these virtual cards through international retailers such as H&M, Gap and Sephora.
The majority of these cards come without fees. The retailers choose what section of the market they would like to make a virtual card available for, such as men within a certain age range and key geographical area. For the gifter, you can choose how much money you would like to add on top of the card’s initial offering. You can then place the card right on Facebook, where your friends and followers can add to the gift as well. Wrapp will link into your Facebook account to remind you of upcoming events in your friends’ life, making it a great way to acknowledge birthdays, but also useful for fundraising efforts.
Sephora’s vice president of interactive is thrilled about Wrapp‘s gift-giving possibilities. She feels that gifts are often overlooked or forgotten in our busy lives, and that giving people a simple, digital way to give a present will make it happen with much more frequency. Sephora has attempted something like this before, through their partnership with eGift Social, which also works through Facebook. But they’re switching to Wrapp due to it’s potential to spread virally.
Wrapp will still push online users to shop in these brands’ traditional stores, but because it is tied in with gifting and not discounts, they feel it won’t cheapen high-end brands. Users also get to choose the gift, as opposed to having to go along with whatever Groupon offers, and the brands will receive free advertising, as each Wrapp gift will be posted on Facebook. Reid Hoffman, a major player in the start-up world and past investor in Groupon, actually invested in Wrapp‘s first money raise as well. He feels that skipping the discount aspect of the equation makes for a stronger, more long-lasting advertising direction for the brands. People will certainly continue to check out any hot deals board they can find, but the flexibility of Wrapp and the massive market for gift cards seem like a perfect marriage.
Editor’s Note
Thanks to Evan Fischer for this quest post. He is a freelance writer and part-time student at California Lutheran University in Thousand Oaks, California.
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