Facebook, Twitter and the other social networks have significantly altered how users interact with their friends and family. Facebook has enough members around the world to make up a significant country, and Twitter has become the first choice for many people looking to share information. How we celebrate special occasions has seriously transformed in this expanding age of the internet. Mostly gone are the days of sending someone a paper card in the mail. Instead people text, email and post Facebook messages offering congratulations for a special event or celebrating a birthday or anniversary. That has created a perfect platform for gifting companies, especially as consumers become more and more comfortable with virtual giving. The gift card industry is already a $100 billion a year business in this country, and the fact that internet purchasing on Cyber Monday is starting to overtake brick and mortar purchasing on Black Friday proves that the change is real and lasting. The co-founders of Groupon are betting on that, as they just invested $1 million in social gifting startup Boomerang.
Based out of Chicago, Boomerang will connect with a user’s Facebook account, giving you a way to make virtual gifts to your list of friends, family and associates. But while social gifting is nothing new, as startup social gifting platform Karma was actually purchased by Facebook back in May and Swedish gifting service Wrapp has been working in a similar space for months now, Boomerang will have a decidedly local feel. According to the startup’s CEO and founder Zachary Smith, most paperless gifting traditionally features the major chains, and the local businesses lose out. It’s often impossible for small businesses to spend the same type of money that a national or international retailer does on gift card, meaning less access to consumers and a much smaller base of potential partners.
Boomerang will finally offer local businesses the same type of distribution access. The startup is launching in Chicago, with forty local businesses already on the roster, including local favorites like Metropolis Coffee, the Navy Pier IMAX Theater and Bike and Roll Chicago. They’ll also soon be adding a non-profit organization in Chicago and in every city they expand to, so their users can choose to make a donation in the name of the recipient. Boomerang will work by compiling data from the user’s Facebook account, targeting all the birthdays, anniversaries and events that could be worthy of gift-giving. Boomerang will then explore the potential recipients’ Facebook pages and make local gift suggestions based on their address, interests and ‘Likes’. Each of the gifts will be completely paperless, and can be redeemed by the recipient simply by showing the vendor the gift on their smartphone or tablet.
Eric Lefkofsky and Brad Keywell, the co-founders of Groupon, expect that Boomerang will fill a void in local and regional marketplaces. They invested through their fund Lightbank, joining MediaBank, Echo Global Logistics and InnerWorkings to put just under $1 million into Boomerang. You should find a click here link on Facebook and on the startup’s website after their launch on Tuesday if you’d like to check out the service.