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BUSINESSWEEK ONLINE: Business Week ebiz | ||||||||||||||
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The New Gift Services Race to Wrap Up Market Share Online registries are partnering with e-merchants to ease the stress of holiday gift giving -- and lock in consumers for themselves One of the worst things about Christmas shopping is the agony of deciding which gift to buy. Would my brother really like this yellow crystal pitcher, or will it remind him too much of the colors of Apple's iMac? What on earth can I find for Aunt Betty? On the Internet these days, there is a whole new way to solve those kinds of problems -- gift services. Over the past year, scores of new companies, such as eWish, Violet, WishClick, and RedEnvelope, have popped up, and they're racing to make a name for themselves this Christmas. What's the rush? This holiday season will be a definitive time for companies that want to lock in customers and become leaders in their marketplaces. Gift services pull together unique and unusual items from all over the world -- crafted by tribes in Polynesia or artisans in New Mexico, for instance -- and make them available at the click of a mouse. Just as compelling, people who give gifts that they order online avoid the hassle of packing and shipping the presents. The Net also allows those receiving the gifts to choose what they want. My brother or Aunt Betty could do that in one of two ways: Either they could put together a gift-service wish list and notify me about it, or I could pick out three or four gifts and ask them in an e-mail message, complete with pictures, to make a choice. They can choose a gift, and I can purchase it for them, without either of us leaving home. All in all, gift services are naturals online. SPA DAYS. And there are several different types of gift services. Upstarts like RedEnvelope and Violet are building huge online gift shops that offer everything from spa days to gardening supplies. Net pure plays, like Amazon.com, as well as traditional merchants that also sell online, such as 1-800-Flowers.com, also have added extensive gift centers. Still, the service that's the most appealing and innovative is the one being pioneered by Net startups such as eWish or Della.com (formerly Della & James). These services are new and unique to the Web. They aren't intended as places where you go to buy online. Instead, they are registries or wish lists that point you to e-merchants' sites. From the consumer's point of view, it works like this: You simply go to these services and make selections of the things you want, which are sold by merchants that partner with the gift service. You can do that by either registering at the gift service or signing up at the e-merchant's site. So all the gift giver has to do is look up the recipient's wish list by typing in the name or address at the registry or the e-merchant's site.
The new gift services, however, aren't true e-merchants. They make their money by taking a cut of the transactions they generate or by charging a flat fee for referring customers from the registries to the merchants. For instance, Dallas-based eWish, which was launched in March and has more than 125 merchant partners, takes a cut of the $1 million it generates each month through wish lists. To get really big, these services will need to partner with a lot of merchants and become the preferred way people register the gifts they would like to have, and since the registries are so convenient, there is little reason to think they won't be able to do that. While the registries offer the most innovative approach -- and will probably be the biggest winners -- there is still room for other types of gift services. That's because not everyone will want to shop through wish lists or registries. For one thing, those services can be a hassle if you don't know exactly which registry has your recipient's listing. And sometimes it's just more fun to buy a gift that the other person isn't expecting. CORPORATE GIVERS. So gift services such as RedEnvelope and Gifts.com, which offer a vast array of products not connected to specific merchants, have a chance, too. It makes sense for there to be a number of services that specialize in gifts for different groups, such as teens or women. Still, there will only be one or two big winners in each of these categories, and that means we're in for a shakeout. Just take a look at corporate gift services. That lucrative area is crowded already. Camdens, Bravo Gifts, and Send.com are just a few of the new services that specialize in helping businesspeople pick the right gift. Both established Net merchants such as Amazon and traditional ones such as Tiffany have added online gift services for corporate giving. This holiday season will be a make-or-break time for many online merchants. The battle among gift services will be one of the most intense. While there is always room for winners in specific gift markets, the real winners will be the innovators, like eWish and Della.com.
Green covers the Internet for Business Week in New York. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ |
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 Heather Green covers the Internet for Business Week in New York WEB POINTERS Click here to visit the sites mentioned in this column: eWish Violet WishClick RedEnvelope Amazon 1-800-Flowers.com Della.com eToys Neiman Marcus Gap Williams-Sonoma J.C. Penney Bloomingdale's Gifts.com Camdens Bravo Gifts Send.com Tiffany | |||||||||
