While gift cards are a $100 BILLION market, they operate on a clearly broken system. Since 2005, $41 BILLION in gift card value has gone unused. New startups are emerging and taking this opportunity to leverage technology in a cool way to make gifting a lot more fun and social.
One trend that we’ve noticed is the several “buy a beer for a friend” startups out there. The cool thing about this gifting model is that you can buy a beer for a friend for any occasion, not just for their birthday, as you usually do with more serious gifts, so there is a big opportunity here. Online to offline commerce, as demonstrated by Groupon, OpenTable, SpaFinder, and others, may be a TRILLION dollar opportunity.
Here are the startups that make it easy to send a beer to a friend:
With Tweet-A-Beer, you simply tweet your Twitter friend $5, which they redeem via PayPal and theoretically use later to buy themselves a beer. Tweet-A-Beer got some serious traction at SXSW this year, but it has one problem. You’re basically sending your friend five dollars, and there is no guarantee they’re going to spend that $5 (more like $4 after all the PayPal and Tweet-a-Beer charges) on beer. This system does work worldwide though, and does not require any partnerships with bars.
BuddyBeers, makes it easy to send any of your friends a beer anywhere in the world (although that is not completely true right now). Simply select a Facebook friend, find a bar that has partnered with BudyBeers near your friend’s location, and send them a beer. Your friend simply shows the BudyBeers voucher to the bartender next time he or she goes to that bar, and tada!, you just bought your friend a beer.
Ok, so this is pretty complicated considering all the factors involved. For one, BuddyBeer has only partnered with about 5 bars here in the United States, 1 bar in all of U.K, and no bars in Ireland! Most of their bars are in Europe, more specifically, around Germany. They should have rolled out the app locally first and expanded slowly into each region to make the app a bit more effective.
The one thing I like about BuddyBeers is that it is a lot more personal than Tweet-A-Beer. You’re actually selecting the beer for your friend, and it’s guaranteed that your friend will spend the money on the beer you selected (if they end up spending it).
BarTab lets you send your friend beer, wine, liquor, sakie, and more from a specific venue via their free iPhone or Android app for only $1. Like the other players in this space, the problem of having to partner up with all the bars still exists, although it seems like BarTab started locally in San Francisco and is expanding from there. Unlike the other apps, though, the $1 price for a drink makes this app pretty compelling.
With Beer2Buds, you choose to send $5 – $25 in beer money to your friend, your friend gets a text or email with a link to redeem the Beer. They select a nearby pub, and then redeem their beer via a printed out certificated or by showing the web version on their phone. Beer2Buds is partnering with bars across the U.S. and in Europe for redemption of these beer coupons. The good news is that some of the bars have deals, like a beer and appetizers. The bad news is that this is only available in select cities. San Francisco, for example, only has one bar that works.
With Conpoto, in addition to sending your friend a beer, you can also include other treats like coffee, ice cream, or even a meal. Simply select a city, select a restaurant, bar, or coffee shop that is partnered with Conpoto, select the item you want to send to your friend, pay for it, and send it over. Your friend redeems the coupon at the location. Conpoto is based in Holland, Michigan, so it is mostly partnered with places in Michigan (not that many of them).
Just like with BuddyBeers, Conpoto has a long road ahead of it in terms of establishing local partnerships. Maybe they can focus on college campuses? I can see college guys buying girls drinks through this app.
FrinXX is another German-based startup looking to make buying drinks for a friend simple. They’ve partnered with over 100 venues in Germany so far. It works in a similar way as other apps. Just select a venue, select a drink, and send it to your friend who can redeem it at the venue. frinXX is starting out local in Germany, so they have the opportunity to really penetrate the German market before moving on to other countries.
Where Are Check-In Gifts
Real-life gifting apps sound really great in theory, but they’re really hard to execute on. Sending your friend money seems pretty impersonal, even if it is with the intent of them buying a beer, but partnering with all the restaurants in the world is really difficult as well. Starting out locally, really dominating one town, and then expanding slowly from there seems like the way to go for these apps.
Another possibility, although I think only Foursquare or Facebook can execute on this right now, is paying for your friends drink or meal if you know they’re already at a specific restaurant – kind of like a Foursquare coupon, but from your friend. Imagine going out to a restaurant, and then getting a message that your drink order is now free thanks to a friend who lives far away.
Any other ideas to make real-life gifting work?
Article image via beer100.