By Aimee Chanthadavong

Australia is known to have some of the highest smartphone penetrations and Facebook users in the world. Meanwhile, the country’s gift card market is worth approximately $2.5 billion.

Combine these three factors together with a team of tech industry serial entrepreneurs with extensive backgrounds in online and offline start-ups, including digital music service Spotify and mobile VoIP provider Rebtel, and we get Wrapp.

Wrapp is a social gifting service and a friend-to-friend marketing platform that brings gift cards to the digital space. It lets Facebook friends interact with one another by giving free and paid gift cards, which can be either redeemed in-store via the smartphone or online.

Carl Fritjofsson, co-founder and chief operating officer, told RetailBiz Wrapp has been designed as a marketing platform for retailers to drive sales and store traffic without the upfront costs.

“In the retail world, especially in the offline world, there are very few marketing tools that would work for the online and offline space. It is also 100 per cent performance base so you only pay for the results delivered. So the twist is that you only pay for this brand exposure if the recipient goes into the store and redeems that gift card then do we charge retailers a fixed marketing fee for driving that store sale.”

Retailers also have the flexibility to target the customers they want in-store using Facebook demographics.

“Some could choose to use it to target their core loyal customers others could use it on a specific niche to extend their base and might be able to do some testing to see which is the better demographic,” Fritjofsson said.

“One of the other thing is because it’s targeted you can get what you want in terms of generating traffic and brand equity. You’re also doing this without diluting your brand through a discount because your giving customers are giving a gift instead of a discount.”

According to Fritjofsson, while social media has changed the way consumers communicate on occasions such as a birthday, the ability to offer a gift still exists in a more physical sense  but with Wrapp that barrier is eliminated.

“From a consumer perspective one of the main trends of the social media sphere was that it was often events that trigger the communication between people as an act of acknowledgement, such as receiving a notification that it’s someone’s birthday or someone has posted a picture of their newborn and the conversation comes alive that way,” he explains.

“So while we saw that form of communication change tremendously there was no real platform for consumers to send gifts. You can tell people ‘I’m happy for you’ and that’s it but Wrapp is new real platforms for consumers to send gifts, which how we really wanted position ourselves.

“We saw there’s a big consumer demand to create this default platform for gifting in this digital age so we started to look at it from a business perspective. It also makes sense to create a digital gift card because given the existence of smartphones it will mean you’ll always have the gift card with you all the time.”

Wrapp give consumers the choice to offer free gift cards, based on the amount that a retailer is willing to sponsor but they also have the option to add extra amounts on top of the free amount.

Participating retailers overseas including Gap and Sephore have report that each sale averages four to six times the value of the free gift card they let Wrapp users give to their friends.

Retailers that have joined the launch of Wrapp in Australia include Lorna Jane, La Senza, Industrie, Ben Sherman, Superdry, Mossimo, Roses Only, Booktopia, iSUBSCRiBE and Happy Socks.

“Wrapp is on to something big here,” said David Smith, CEO of True Alliance, a distributor of fashion brands including Ben Sherman and Speedo.

“Consumers will no doubt think it’s super fun, and really convenient, because the gift cards you give are stored in your friends’ phones so they’re always with them when they want to buy something they really want.”

Anna Cristaldi, COO at Lorna Jane agrees this is an app which will benefit sales and help drive customers in-store: “We’re always on the lookout for new ways to hold on to our best customers or find new ones – or both – and Wrapp looks like a great way to do it.”

Wrapp has already been launched in eight markets and there are plans to roll it out in another 10 before the end of the year.