Categories: PYMNTS Topic TBD

Upping Gift Giving’s IQ

This past season, as always, the halls were decked and wrapping paper was torn to shreds. Also shredded were the egos of untold gifters and gift-getters who simply got their signals crossed. Sure, it’s the thought that counts, but no one wants to be asked, “What the heck were you thinking?”

Thus, the topic of our latest Topic TBD, where PYMNTS’ Karen Webster sat down with Ben Strenitz, cofounder, COO and CPO of SmartGift, to offer an analysis on what constitutes the ultimate home run when it comes to gifting, what fails and how technology (and his site) can turn a boxed and bowed also-ran into a winner.

Hint: The gift card is likely to be a bust, he said.

Strenitz told Webster that entrepreneurs are looking to “one up gift cards” and make the gifting experience a better one, but the executive said gift giving is complex because of the multiple parties involved — in this case, the gift giver “who wants to please the recipient” and the receiver “who has an inherent need to be known and understood.”

“It is a really intense, emotional journey.”

In reference to the emotions involved, the giver may ride an emotional rollercoaster, said Strenitz, as thoughts move from “I have a great idea” to “I’m sure [the recipient] would love this” to “I’ve found it” and beyond. The ideal scenario, he said, is when the recipient gets the gift and exclaims, “Wow, how did you know?”

But, more likely, the would-be buyer/giver is stuck with the mindset, and the rollercoaster low, of “I don’t know what to give.” The worst-case scenario also extends to the recipient, crestfallen, stating, “How could you?” In essence, said Strenitz, gift giving is broken down into either a gift or a gift card.

The gift card amounts to what he termed a “complete failure” as measured against the highs and lows of giving a gift because it does away with the emotions tied to the gift-giving transaction.

Strenitz said that SmartGift seeks to allay that anxiety of “I don’t know what to give, and will it get there in time?” and to make sure that you do not have this “Oh, God, how could you?” on the recipient side. The site uses algorithms for gift suggestions and directs would-be gift givers to a curated marketplace where gifts abound. The site, said Strenitz, is organized by different interests, with an eye on creation via the gift giver (think wine, for example).

Once a gift has been chosen, SmartGift presents gifts to recipients, visually, with virtual wrappers and, in turn, seeks to replicate, in part, the surprise of unwrapping a present given in person.

But there is also the ability for the user to expand the options through a type of SmartGift “IOU.” Hypothetically, giving the gift of wine glasses to someone who does not want them — in this event, when the gift recipient finds her perfect choice, the giver is notified by SmartGift that now the transaction can be completed. Other products allow for gifts to be converted into store credit, noting that giving the giver options is a “great way to introduce the recipient to a brand.” And for merchants, he said, the platform represents an ideal way to show their own offerings. He mentioned a company called Shop Soko, which works with local artists in Africa, where the products now have a bit more widespread exposure.

In answer to Webster’s statement that gift cards are regarded as “found money” and that recipients can, arguably, gift themselves, Strenitz said: “What we found through our research and in talking with consumers and in thinking about the gift cards is that it’s an easy tool for the gift giver, because it really removes some of the [aforementioned] variables.” As a result, younger consumers do skew toward giving, or considering giving, gift cards. But more satisfactory alternatives exit to those options, he said.

In moving towards alternatives to gift cards, said Strenitz: “You really have to start on the product level … as it is important to pick [the perfect product] and have the recipient receive the perfect product [with] an experience that makes it easy to find the gift.” And in reference to timing: “We allow the gift giver to give a real digital gift in a digital way,” which, through a link, can be shared with the recipient in any way the giver likes (including in person rather than via email).

“You keep the element of emotional surprise,” he said, noting that “we’ve been seeing a lot of popularity with our service, for example, with this holiday season,” where 78 percent of the users were either millennials or Generation X and the average time in giving a gift through SmartGift was three-and-a-half minutes.

The digital presentation of a physical gift, said the executive, is one that comes as “the gift card is a pretty ancient invention” with a way that makes gift giving memorable, beautiful and emotional, “and we have the technology now to do this and the talent to do this.”

“Frankly, there is nothing memorable about receiving a gift card.”

And he said that the movement to digital/physical gifting is poised for growth, having what he said was “a huge increase in the number of transactions over the past year.”

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New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

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