Gadgetory

hey guys it's rafe needleman in San Francisco welcome to reporters roundtable hey you know Facebook obviously is becoming our big area of social interaction it's our social infrastructure it's where we connect it's where we break up it's where we interact is where we do all our all are living with each other and increasingly giving gifts is a big part of that interaction so we're talking today about one of the most important companies in that space is called wrap w RPP it's a new platform for gift-giving at least here in the US it's been live for about a year in Europe and Sweden in particular it's far from the only face book based gift-giving platform but I think it's really interesting so I brought in the CEO of the company on their US launch day the all Marwan dad into the round table to talk about what's going on with rap first of all congratulations on your US launch oh thank you and thanks for coming in give us first of all a quick pitch what is rap and why as a socially connected Facebook person should I care see if you have facebook user and you have a smartphone which is actually the most most people today but wrapped us it's make it super simple and easy to give a gift cards digital and social gift cards of real value and most of the gift cards are actually free and if you want you can then add money to do the free gift card and you can actually join to contribute to those gift cards and send them to your Facebook friends so if i want to give somebody a gift card that your partners will give me money to give to them free money yeah that's the kind of spin we have a trap is that a lot of big retailers especially brick-and-mortar retailers are spending tremendous amount of money on advertisement to draw people into the stores and buy and the most most of the kind of classic advertising methods for brick and mortars are not very good to target with I mean TV broadcasting and and paper advertisement and direct marketing and so forth so what they can do with rap is that it can actually offer me to give you a free gift card if you fit the demographic that they actually would like to reach and get into the store oh wait so if I want to give you a gift you have to have like what a Klout score of a certain area certain number in order to qualify for the free Starbucks or gap or whatever it is gift that I want to give you now the way we do is actually use the same date as Facebook use for their advertisement you know they look at your social profile which is of course you know gender age and location where you live and of course with a smartphone and the apps that we have we can actually be more precise with your location based on you know the position you can get in the phone so what we're doing based on that data and the retailer's can then make sure that reach people that are actually in the area that actually fits the demographic they actually has as the favorite customers so if that's the case and that's a person you know that you would like to gift a free gift card will most likely pop up when you're going to give that person so two things first of all if I want to give you a gift yes do you have to be a member of the rap community no okay so the weight stars is that you download the app and you can start gift all your facebook friends through our app on the smartphone android platform and iphone iOS platform and of course through the rat comb the website okay but when I now go to give you a gift or versus giving a Steve a gift the gifts that are available for me to give to you versus give to him will be different yes and it's fascinating so they're different based on of course you know my based in Stockholm Sweden and therefore you're going to see Swedish gifts and that retailers that would like to target you know my my demographic which is you know my age and gender & where I live they going to pop up when you're going to give me and even you're going to give someone who lives in San Francisco of course retailers who would like to target those people that has that age group and gender and location will pop up is this really a gift or is this like I'm giving you a sponsorship I mean it sounds like it's it's kind of a new concept of gif I mean when I want to give a you know my mother a gift I it's not like hey here's a five dollar gift certificate from from the rug store it's like this is a gift is from the heart you know so the way it works i mean the gift is free and it's no strings attached oh it's a gift card value may be five to ten dollars it could be up to fifty dollars we have here in the US when we launched we have gift cards for free between 25 and 5 dollars from different retailers and of course if it's to your mom and maybe she lives in New York here you kind of missed her birthday we just like to say thank you mom for last week and when you were here babysitting your kids or whatever you can then actually start with a free gift card and then add money to that gift card so if it's not enough for you if you don't feel a bit like five or ten or twenty five dollar is not enough you just add to that gift card and you know grow it to twenty to twenty-five fifty dollars I think so interesting so you've launched you said about a year ago in Sweden we launched November 15 so it's less than half year okay sorry and and then what have you learned from so we launched in Sweden Sweden is not as mature when it comes to gift calling us as the US we don't have the same gift card culture as here at the first four months in Sweden we had 200,000 people actively you know downloading and starting to wrap their friends as we say and 1.4 million gift cards were sent in Sweden and put that in context it's 4.5 million Facebook users in Sweden's it's a small country and roughly the combination of Facebook and smartphones or Android and iOS or roughly three and a half million people so 200,000 out of 33 million people in the first four months and have a given 1.4 million gifts it's a pretty good success that's interesting so hang on we have a gift card culture here yeah gift cards aware ya know it's interesting I was kind of surprised to I mean us an average adult gives five gift cards pre per year and which is a very high amount I am falling behind hey and it's interesting you know it's it's a and and and and the size of the market is actually a hundred billion dollars so that's meet times bigger than all advertisement being done on internet last year in the US and so yeah I based on that numbers of a stun too and I can realize that this is a gift card mark 100 billion dollars of pieces of plastic with stored value that get lost and discarded the the amount of unclaimed value that's called the breakage I believe it must be immense yeah it is and I think you know that's a resume our business model is based on really drive people into the stores and our business model is aligned with the retailers in that sense that we only earn money if that gift card is used and I think the gift card is it's a much better place to have the gift card in your mobile phone rather in the drawer next to your bed that you can oh you're not coming about the mobile phone aspect of it also rap is mainly an app on your mobile phone the not name comes from rap an app so that's the reason why we have two peas in in our name and the whole idea is to make sure that people are interacting in giving gift to each other you know on a daily basis through their mobile phones rather than through the web or or you know buying piece of plastics in stores so when I get a gift or wrap gift I then I need the app or doesn't come as an SMS do I have to have a smartphone order to redeem my gift from from you or somebody yeah so what we done is that we are focusing on the people that have smartphones and actually have that is one way to actually a target for for for the retailers and make sure so that you need to have a smartphone at android and iOS device and on facebook so that's kind of the limitations in terms of the reach we have it are with our applications which is fairly big today well there are a lot of people with smartphones and and Facebook okay so you know what people are giving to other people is is there a privacy angle or a potential problem here with me giving I don't know a girlfriend a gift to a jewelry store actually no let's strike that I'm never going to give somebody a gift to a jewelry store I want to give a real gift yeah I think you know I think that's the interesting thing if you look at at at gift card in here in the you guys actually give courses most thought of the gift to receive by consumers in the US five years in a row and I think one of the reasons is that and I just look at myself but I'm going to try to give something to might the waters as an example I know they love hmm as an example but I know they like fashion but you know for me to buy something at H&M to my 14 year old daughter is deemed to fail so I think she's much more happy to get a gift card from her dad and then of course due to chopping herself and decide the size color and what you would like to buy now I saw another there are other businesses in this space when I covered a while ago it's called Karma have you seen that yeah I think they have a very interesting take on given social gifting yeah there's a very different model that is I actually pick out a gift for the recipient you know but they don't have as far as I can tell they don't have this kind of marketing angle yeah that you've got I mean our focus is to really make a win-win solution for the consumer the consumer has the opportunity to give away free gift cards to to to their friends and give it more on a casual basis you know not just for birthdays but like thanks for great meeting yesterday miss your mom I hope you get well soon instead of just sending a thank-you SMS text message or doing a facebook wall post we think you know casual gifting is a very interesting aspect and that's what have grown our business tremendously in Sweden and Europe where we have launched all right all that thought we'll be right back after this gift of a message from our sponsor alright so you just launched here in the US if who are some of the tell us about the launch women who are some of the partners anything you've learned in the 24 hours or so since you you want it's not even 24 hours in lesson we launched his mornings have you slept not that much I you know I slept a couple of hours this tonight yeah okay well good luck with that but um tell us about who your partners are and what they are looking to get from this relationship with Rena so we are working with the brands like hmmm gaps fo right here in the US and even most of your nails and angry birds that's it it's a very interesting kind of breath of of different retailing so it's both digital goods if you can call angry bird that and it's like with Wall Street Journal it's actually their digital edition plus the week in addition and then of course more traditional brick-and-mortar retailers is it a difficult sell I mean do you walk into the macy's or the sacks of avenue and say I've got this new way for you to reach potential customers and sell gift cards how is the sales process going for it for for a company's been out for a while the US launch you have some impressive launch partners but it's a relatively small number I I think you know the number is you shouldn't be launched we launched with 528 retailers that has a good mix actually we launched with 15 here in the US and we have another 30 actually brands and retailers on his way in so usually we do launch with some and then we add for every week some additional brands that going to come in to make it something is happening in the app and now it's a new retail you can give I think when you look at added from from from a retailer perspective I think this is a great way to drive sales at the same time you are actually getting great brand positioning at you know both on the facebook wall in a friend to friend framework and and and then of course the media for them is free and that's the reason why they can actually give away the gift cord let you give away gift cards to your friends I get the pitch and it's a compelling pitch but how is the sale I'm curious about the sales process is going because I see all these interesting new businesses whether it's Groupon and I want to talk about groupon and second whether it's group on with their different pitch or a karma to an extend as we talked about or what's this other one so my butt butt oh yeah keep which is doing a engagement trying to engage people when they're playing games and uh how do you find the person to sell this to I mean how much of the budget can you get versus you know broadband advertising a broad-based advertising which is very focused marketing supermarket you're doing here yeah i think you know from a retailer perspective especially if you're brick and mortar retailer you're looking for much more efficient ways to drive sales into your brick-and-mortar stores and of course so far they have not really found a good edward method for them that works offline i think that the compelling story about rap is that it's very very good targeting opportunities within wrap it leverage the social graph and the smartphone in a very positive way for the mobile for the retailers at the same time it's building their brands and they only pay when actually you as a consumer goes in and redeem your card so the whole thing is performance-based for them so they don't have any costs whatsoever until actually US consumer are using your your gift card is there any danger of a Groupon type of brand erosion I mean when when I buy a Groupon I mean that the general thinking is I'm now a customer of groupon not a customer of the store and buying the groupon for since you're giving things away to people is there a chance that people just take the freebie or give the freebie in and not build the brand which is what the companies want I think note and Groupons business model is attached to brand to massive discount and actually getting you are looking for DS to buy that upfront and then actually of course using that deal which is a massive discount wrap is exactly the opposite which is you are giving a gift to a friend who receives a gift card of real value if it's sponsored and free for you it means it's still that same still holds the same value for the one who receives the gift card and of course the context for the retailer here's they get posted on your facebook wall by a friend in the context of saying thank you congratulations miss you and so forth so that's something that it's actually brand-building rather than brand illusion where they actually being picked by someone looking for a great deal and they're picked because they put a big discount next to the rack do I have to broadcast this can i just give somebody a gift without putting it on the wall or can i just give a private gift of course you can look try to give to it so i mean you can you can send it very probably do a text message and but it's interesting thing when you share share it on the facebook wall you actually open up for other people to contribute to the gift and that's happening a lot when you have a birthday or a holiday season greeting or whatever where people actually can add into the gift so you gift card let's say at the you know sporting bike a company or whatever and everyone knows that you're great you really into bicycling it whatever i mean you can actually see people group giving into the gifts so the gift card actually grow a lot in your wallet in your mobile phone great well thanks for coming in it's a very very interesting model very creative very interestingly to make money and help people connect with each other and give gifts as well good luck with that good luck with your continued good luck with your us launch thank you again that's llamar winblad from a wrap w are a PP calm you can get it on android and iphone yeah that's great check it out we'll see you soon a reporters roundtable you