In June I attended a retail panel discussion at FIT (Fashion Institute of Technology). One of the panelists was Monika Kochhar, CEO and founder of SmartGift. Monika and her unique concept and service offering got my attention.
How many times do we ask ourselves, “I want to get a special gift for that special person – what should I buy?” Birthdays, graduations, anniversary, weddings, or just because. The giver sometimes faces anxiety, “Will I make a good choice? Do I really know what my special someone wants? Easier to just purchase a gift card and call it a day.” Certainly a nice thought and appreciated but not that creative, individual or special. Taking that extra step and actually buying a gift has its drawbacks. Never do I send something without a gift receipt, putting the onus on the recipient to return it to the store or pack it up for on-line return if for whatever reason the gift is just not right.
SmartGift transforms that process with its conversational, P2P gifting tech. People can send gifts from participating merchants to each other by text, email, whatsapp, messenger; anyway they naturally communicate. The gift recipients open their presents interactively by swiping off the merchant branded digital gift wrap. They then have the option to customize their gift – pick a size, color, other product preferences or exchange the gift for something else before it is ever shipped. It’s a win-win for everyone. There are negligible returns for the retailer, the gift giver has designed a memorable and immersive experience and the lucky recipient gets exactly what they want. The receiver can send a personalized thank you note and share on social media. Perfect for our connected generation. Retailers can tap into previously unknown gifting data down to the SKU level and utilize SmartGift as a product marketing platform. Think of Christmas all year long; retailers can continue to connect with their customers in meaningful ways that go beyond just giving holiday discounts.
Gift cards will always be available but in our experiential culture, SmartGift has opened up new and compelling possibilities. SmartGift is just that – smart and sensible. I’m confident that customized and personalized gift giving will be a major retail trend for 2018.
What do think of the concept?
Hi Richard: what an interesting concept! And a great demo, too! While I see possibilities for SmartGift, I’m especially interested in your reasons for extrapolating that customized and personalized gift giving will become a major retail trend. I ask this because I am not aware of any significant latent need or widespread dissatisfaction with gift cards (I agree with you that gift cards are not particularly creative or exciting, but they’re hard to beat for convenience.)
I’m sure SmartGift pounded out umpteen use cases on the conference room white board. I imagined a scenario where I had lunch with a colleague, Tom, who mentioned an interest in getting started with woodworking. I shared that an important first purchase for the home hobbyist is a sturdy workbench. But I’m not sure how much space Tom has available, nor whether he prefers drawers, shelves or a combination. So I send a SmartGift and offer him his first workbench, which he can configure online. But here’s where the transaction gets a bit tricky. I’ve offered up to $200. What if he under-spends? Does he forfeit the delta? Can he spend the balance on a set of quality drill bits (also a must-have)? At what point would I, as the gift-giver, throw up my hands and opt instead to ‘personalize’ my gift by just giving Tom a gift card to [retailer name] with my equipment recommendation? To me, this seems just as simple, and preferable to Tom, who might not consider my recommendation his top need. Or, he just might not be ready for a workbench. I see lots of ‘or’s that escalate the risk that my gift might not be quite as ‘perfect’ as I had hoped.
Where the use case works beautifully is (not surprisingly) in the demo example: Someone has shared their passion for, say, cold weather hiking, and I want to send them a specific jacket – or more accurately, a somewhat specific jacket. Better to let them pick out their color and size. Or . . . I could send a gift card with my suggestion for a fantastic brand and style. Wouldn’t that offer everything SmartGift provides, minus the pizazz?
I like Andrew’s discussion with the workbench example. And, I laud the cleverness of SmartGift. Call me old-fashioned, but we got here because of a generous, sincere gesture aimed at pleasing its recipient. It is a tangible signal that is designed to communicate, “I thought about you; I care about you; and I like you,” The more gift-giving is mechanized with super cool technology, the more it risks sanitizing the gifting experience, robbing it of authentic and abundant caring. What comes next? Robotics and AI might ultimately enable us to skip the caring part altogether enabling those blue and green stripped socks on my wish list to just end up in my sock drawer. Why bother gift-wrapping with materials that are ecologically unfit? Why have a sappy note that brings a smile and a feeling of warmth. In the end, it is not about the stuff; it is about the gesture, right?
Hi Andrew, thanks for your thoughtful comments and questions about the concept. I realize that the typical consumer might feel comfortable with the current gifting options, but so many times a gift card never gets used; it’s lost, forgotten or the recipient just puts off the task of trying to find an item they want. Basically, it’s a waste of someone’s hard earned dollars. Another advantage of SmartGift is that the giver is not charged for the item until the person accepts the gift or they customize it to their preferences. Sometimes we don’t know we are unhappy with something until we learn about something else that exists. I know I’m that way. As far as your hypothetical story about the workbench, you have a point. However, overall, this concept will most likely continued to be tweaked, further refined and fine-tuned as it takes off. Thanks again!
For the time-crunched consumer who wants to provide both thoughtfulness and distinctiveness in gift-giving, this is a nice iteration beyond Nordstrom’s personal stylist/concierge concept, which has been around for some time. Though, as you suggest, SmartGift still has some kinks to be ironed out, Monika is to be commended for coming up with an interesting niche idea, and a unique service, that is both valuable and applicable all year-round (birthdays, events, holidays).
Michael, thanks for your comments. Yes, Monika came up with an amazing and innovative business model that we all can use. When I first heard her at a panel discussion for the Retail Marketing Society, I knew I had to meet her and find out more. Richard
Hi Chip, as usual thanks for your thoughtful comments. It’s true that giving someone a gift should signify something special. Other than a gift card to Amazon (LOL), I always prefer an actually piece of merchandise. Even if I need to exchange it, I always try to get something similar but just more to my liking. This way I can always think of the person when I use or view the gift. To me, gift cards were always an easy way out, which is why I know Monika is smart to change the way we give gifts. Richard
Hi Richard: I wish SmartGift well. But I don’t anticipate smooth sailing. The company must convince three types of customers, and they don’t all have the same objectives: gift receivers, gift givers, and retailers. In some ways, I see this as a solution searching for a problem. You can possibly make the argument that being perceived as a good gifter is a problem, but I question how visceral that problem is. And visceral is a decent motivator for habit change – at least in my experience. A not-small challenge for converting retailers is the profit stream they enjoy from gift card breakage, which was $8 billion in 2006. I trust that number is significantly higher today. I’m assuming with SmartGift, they give that up. If not, then this will be an easier sell.
The good news: e-gifting is growing measurably. And I’m guessing that SmartGift sees a decent chance of peeling off some of the $140 billion or so that was spent on gift cards last year. That’s probably not a bad bet. Somewhere in that massive revenue stream, there has to be a market for people who crave the ability to provide something – anything! – less perfunctory and less bland than a gift card. If I were tackling the sales launch for SmartGift, I’d bypass the mass retailers, and explore finding a sweet spot in the specialty, second- or third- tier retailers who want a unique and nifty presentation for their products and a differentiated customer experience.
Andrew, you raise many excellent points, but like you said if SmartGift benefits even from a small percentage of the $140 billion gift card market, she has a winner!
Hi Everyone,
Loved the engaging discussion here and let’s keep the dialogue going. We simply bring gifting into its next logical phase by transforming the costumer experience and harnessing data for our brands and retailers. Gift card has its own place but is highly transactional.
Really excited to follow up with the holiday season post math.
Best regards,
Monika