In the fight for supremacy in the gift certificate field, most combatants are warring over the individual consumer. However, one company has carved out a unique niche as the online gift certificate site of choice for corporate gift giving and incentive programs. Giftpoint.com.now has over 75% of its customer base in the small businesses and large corporations.
It’s a big market sector to attack: at Jupiter Communications, analyst Ken Cassar says their survey of e-shoppers during the 1999 Christmas season found that 8.4% of those surveyed intended to purchase online gift certificates. With an estimated 24.5 million shoppers on line for the holidays, this calculates to two million gift certificate shoppers. While most were expected to purchase directly from store web sites, many found it easier to find gifts for loved ones through sites that provide a selection of gift certificate ideas at a single source.
Although Giftpoint.com customers include both consumer and corporate buyers, many corporations utilize their services for employee incentive/reward programs, promotions, and gifts to key suppliers, customers etc., a market which is estimated at $11 billion annually. Key competition for these dollars are such companies as GiftCertificates.com , and Flooz.com . GiftCertificates.com was profiled in an earlier VC Watch column.
Giftpoint.com has a large selection of restaurants, shops and national retailers from which to select a gift certificate for even the most choosey recipient. Or, if the shopper has no idea what to give, try a Giftpoint certificate, good for merchandise at multiple stores in the Giftpoint lineup of over 350 merchants including Macy’s, Bonwit Teller, Timberland, Dillards, Marshall Field, Warner Bros. Studio, Dayton’s, Ace Hardware, B. Dalton, Barnes & Noble and Waldenbooks. Restaurants run the gamut from Wendy’s Old Fashioned Hamburgers to Bennigan’s Grill and Tavern.
Merchandise is divided into individual and corporate gifts. The shopper can search the website by zip code, category of gift, occasion or recipient profile. Zip code appears to be the best search element. We tried Sonoma, California, in the San Francisco Bay area with very good luck. No stores in Sonoma but over 30 shops and services within a 20 mile radius. We then tried the suburbs of Jackson, Mississippi, with an even better response: Fifty within 20 miles. Then, the ultimate challenge, a small town (Grinnell) in Iowa. Two actually in Grinnell with dozens more in a 20 to 40 mile radius. This compares with GiftCerticates.com (a major competitor) which had 50 in the Sonoma area, 40 near Jackson, and about a dozen in the Grinnell area.
Prices are the face value of the certificate. For a paper version of the certificate the cost is free for the standard card and up to $4.95 for the foil paper version. Customized messages are included and one of four small gifts ranging in price from $12.95 to $14.95 can also be added. Gift certificates can also be sent via e-mail. The virtual delivery is a kick, with full color animation of a gift box and card. Both unwrap and open to allow the recipient to read the sender’s message and see the gift certificate inside the box (which unwraps itself and presents the gift certificate).
One cool item is their customized address book. Purchase a gift for someone and Giftpoint.com will put it into a personal address book so that the information can be easily retrieved by the shopper the next time a gift is sent to that person. In addition, they can take comma delimited mailing lists for corporate gift giving.
Begun in mid-1998, the company has grown from a two-person shop to more than 75 employees with annual revenues of $6 million. Brother and sister Doug Nielsen and Julie Mahlock were co-founders. Nielsen’s background was in the cellular telephone industry before founding Market Innovators Inc., an information and direct marketing business selling such products as entertainment coupon books, holiday gift packages and gift certificates. Mahlock’s background is in communications and marketing and was also involved with the founding of both Market Innovators and Giftpoint.
“The challenge will be acquiring a sizable stable of merchants. Appeal (to the consumer) will be exclusively based upon the quality and quantity of merchants,” Cassar said. In a field filled with competitors, Giftpoint.com has plenty of challenge ahead.
To date, the company has obtained $6 million in two rounds of funding. The first round of $1 million was funded in 1998 by individual friends and family. The second round of $5 million was funded in September 1999 by Greatergood.com.
IN A NUTSHELL:
Company Name: Giftpoint.com
Address: 11510 Blondo Street, Suite 103, Omaha, Neb. 68164
Phone: (402) 445-2300
Fax: (402) 445-0075
Contact e-mail address: [email protected]
Web address: www.giftpoint.com
Total Funding: $6 million
Investors: Individual angels, Greatergood.com
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