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Facebook Gifts Launches to Bring Social Gifting to the Mainstream

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This week, Facebook announced Facebook Gifts – a new feature that aims to turn social interactions into tangible transactions among friends. The idea is simple: people are already celebrating big moments via social media, so why not give them a chance to append real-life products and services to their greetings?

Not so fast. Though people often discuss brands on Twitter and share their favorite products, it remains to be proven that they want to shop directly from the platform. Remember, Facebook killed off an earlier version of Gifts back in 2010, and shuttered its Deals offering last August.

Still, the new Facebook Gifts aims to remove the labor generally required of sending a gift. All the sender needs to do is select the item, select the friend and send. The recipient provides their preferred address and product preferences (size, style, color, etc.), and can even swap the gift for something more desirable. Facebook has partnered with 100+ retailers at launch, including Starbucks, GUND and Magnolia Bakery.


Image via the LA Times
The new feature follows Facebook’s purchase of Karma in May. Karma was a social gifting app that could cull a user’s Facebook data and alert them when friends’ milestones such as birthdays or weddings occurred. Not surprisingly, Karma featured the same options as Facebook Gifts now does, such as the ability for the recipient to set their own address and gift preferences.

In an age where many people wouldn’t remember their friends’ birthdays without a friendly reminder from Facebook, this seems to represent natural evolution of gifting. Of course, “friend” is often a loose term in the realm of Facebook, so the pool of potential recipients is much more limited than an individual’s total friend count in most cases.

Social gifting has been around for while, but never at such scale. For example, social gifting startup Wrapp (featured previously on the blog and in our latest Startup Outlook report) already allows people to send gift cards from partner retailers to their friends via Facebook.

The key difference between Wrapp and Facebook Gifts seems to be that whereas the former is built largely on word-of-mouth – or “friend-to-friend” marketing – to drive acquisition, the latter is largely an ecommerce vehicle. Thus, Facebook Gifts shouldn’t hurt social gifting startups designed to achieve different objectives, and there remains an open market for models that approach social commerce from a unique angle.

Facebook Gifts marks the company’s biggest move in ecommerce yet – with the potential to become even bigger. As Forbes’ Tomio Geron notes, “If you can send real-life gifts to people that you purchase on Facebook, why couldn’t you purchase them for yourself?” It will certainly be interesting to see how Facebook potentially grows Gifts into a larger platform built on its wealth of social data.

Facebook Gifts marks a big update for retailers specifically; whose opportunities on Facebook previously included only earned social and owned efforts and paid advertising. All Things D’s Mike Isaac also raises an important point, being that Gifts is inherently mobile. You can almost imagine an experience where a user gets a push reminder about their friend’s birthday, from which they can instantly purchase and send a gift.

Brands with their own ecommerce platforms (1-800-Flowers and Sephora, for example) stand to benefit most, adding another distribution channel to their existing method of fulfillment.

There’s also opportunity – at least in theory – for brands that don’t currently have their own ecommerce platforms (i.e. CPG brands). Currently, partners are hand-picked by Facebook and do not represent this group; however, the potential is there for Facebook to propel itself into the order of Amazon and Diapers.com.

Logistical questions remain – shipping costs, fulfillment and the like – but it’s clear that Facebook is entering an important new arena, one in which it has the potential to succeed given its unparalleled stockpile of social data. Critical to the success of this new endeavor will be a consumer-minded execution that makes it seamless for marketers to test and learn before diving in completely.