Facebook and Amazon are getting into gift-giving this holiday season, with both sites rolling out social commerce features recently.
Facebook’s Gifts, Aggregift and Amazon’s Friends & Family Gifting are among those aiming to capitalize on the lucrative world of gift-giving and trying to ultimately make the process more convenient for both sender and recipient — not to mention helping retailers capitalize on social networking.
Both Facebook and Amazon are looking to tap into social commerce — a $9 billion market this year, with projections of it growing to $30 billion by 2015, according to Booz and Co. estimates.
Alex Hollander, a spokesperson for Facebook, explains, “There’s a lot of room for innovation in gifting — the last major innovation was roughly 20 years ago with gift cards — and we welcome that.”
According to the National Retail Federation’s latest consumer-spending survey, a mere 11.3 percent of Americans report being done with holiday shopping. When asked where they plan to do the remainder of it, a plurality, 45.5 percent, said online.
“Consumers are accustomed to buying from these retailers, so there’s built-in confidence for many consumers, not to mention established accounts — they have already shared credit-card and shipping information with these merchants,” said Rebecca Lieb, a digital advertising/media analyst at Altimeter Group.
“Amazon knows its users interact more socially on Facebook than by viewing one another’s Wish Lists on its own site. Walmart, of course, must maintain a competitive edge in e-commerce. I expect many more established retailers will innovate at the intersection of digital commerce and social media in the coming year,” Lieb added.
Some may do so by way of this “next big thing” in the gifting industry. Facebook, the social-networking giant with 800 million users, made a statement when it bought out Karma (a virtual gift-giving app that had previously raised $4.5 million in funding) for an undisclosed price in May.
And on Dec. 11, Facebook launched its nationwide Gifts platform, led by Karma co-founders Lee Linden and Ben Lewis.
Aggregift is built on the notion of crowd-funded gifting. Founded in 2011, the app allows people to select a gift for a friend and contribute as little or as much as they’d like.
Aggregift then shares the effort across Facebook, enabling other friends to contribute to the total value of the gift for up to 72 hours. At that point, whether or not the gift value has been successfully raised, the recipient will receive a gift card with the amount collected (after Facebook takes its fee).
According to 25-year-old co-founder Greg Schvey, Aggregift is “focused on experience and friends coming together. Wrapping it up in 72 hours provides that closure.”
Alex Tarantino, head technology and digital media analyst at PrivCo, says that Aggregift’s premise distinguishes it from competitors.
“Advertisers have been looking for this type of exposure,” Tarantino said