Friday, June 24, 2011

Start-Up Watch COD: LetsGiftIt Makes Group Gift Giving Easier for Consumers

Group gift giving has probably been around as long as gift giving itself. The idea of multiple people contributing to a larger present affords the opportunity to provide something really special to a recipient. But in the past it has been a pain to manage the logistics of group giving. Someone has to go from desk to desk or get on the phone to coordinate and collect all of the contributions necessary to raise the cash.

LetsGiftIt is a great example of how digital can take a lot of the wheel spinning and complexity out of something that used to be challenging to manage. With LetsGiftIt, the organizer simply picks out the desired gift, sends notifications of the group giving opportunity to people who may be interested in contributing, and then lets the platform do the drudgery. A sort of step by step explanation goes like this.

1.Pick out the item you want to give
2.Start a gift giving instance on the site by linking LetsGiftIt to an online seller where you want to make the purchase.
3.Set a minimum gift amount if you like, and define the privacy settings to either prevent the gift recipient from seeing who is giving, or enabling her to see what’s happening.
4.Send notifications via Facebook
5.Check back periodically to see the money collection process, send out reminders, or even tweet the link out to stir up some more contributors
When the money is raised, LetsGiftIt makes the purchase for you, and gets it shipped to the recipient. The recipient also gets a card with the names of all of the contributors on it. If all the money doesn’t get raised, the recipient gets a Visa or MasterCard gift card in the amount raised.

A how-to video explaining the particulars is available at this URL

They make money by charging 4% of the price of the item, and 75 cents per donation. So by my calculation, a $300 gift and 10 donors would generate $12 + (10*$0.75) = $19.50 in revenue to the company.

Consumers who receive requests to participate have the option of whether to give or not, and the amounts of their contributions are kept secret from the recipient.

So why should marketers care? A couple of reasons:

•First, the gift giving business is enormous, and tools that facilitate the giving of fewer, larger gifts have implications on how those companies go to market. At minimum, this may be a marketing channel that it would behoove luxury goods makers to explore.
•Second, it seems natural to expect that over time these folks will build gift suggestors and other potential sponsorship offerings into their platform. Third, other such companies are coming – I know because I’ve seen several similar businesses pitched in the past year.
•Third, it is yet another example of the dislocation of payment methods that we are witnessing and participating in today. This innovation is interesting in and of itself, but it is also another example of how digital is being applied to simplify business processes and facilitate commerce.

If you are in the gift business, take a moment to check this out.

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