The founders of Skype and LinkedIn have invested in a new kind of service that is poised to take the local fashion retail market by storm.
Wrapp, a new social gifting company, has just opened offices in Sydney, and allows users to give Facebook 'friends' free gift cards provided by top retailers that want to attract customers.
The service, backed by Skype and LinkedIn founders Niklas Zennstrom and Reid Hoffman, Spotify’s first chief technology officer Andreas Ehn and Rebtel founder Hjalmar Winbladh, first launched in Sweden in November.
The company has since expanded to the UK and Norway in March, and is now debuting in the US and Australia.
The Wrapp gift service allows users to give, receive and redeem gift cards for free, using mobile devices or the web, and works as a way for merchants to attract and engage consumers, and as a platform for conducting discount-free performance-based campaigns.
According to the company's research, participating merchants have reported that each sale averages four to six times the value of the free gift card they let Wrapp users give to their friends.
Wrapp CEO Hjalmar Winbladh said the service can also be used to drive highly targeted in-store and online sales, and get real-time access to aggregated campaign and customer demographic data.
"Retailers have been struggling for the last couple of years to find a way to use the latest mobile and social technologies to their business advantage," Winbladh said.
"Daily deals, they found, dilute their brands and more often than not drive unprofitable sales from consumers who don't come back without a discount. We think it's time for retailers worldwide to turn Facebook fans and loyal customers into their best sales force ever and only pay for the service when consumers make a purchase in-store."
Wrapp is a social gifting service which facilitates the exchange of free and paid gifts from attractive brands. Founded in the first half of 2011 by a group of serial entrepreneurs, Wrapp is based in Stockholm, with offices in the UK, US, Germany, France, the Netherlands, Taiwan, Japan and Australia.