There may be no more important innovation in history than the internet. It has truly transformed the way we do business, the way people interact with friends and family, and how we receive information about the world. Startups launch left and right, looking for innovative ways to take advantage of the space. Some of them, such as Groupon, create a massive following and do big business. Others swiftly fall by the wayside. The founders of Groupon are now betting on a new gifting platform, announcing they’re backing the launch of Chicago startup Boomerang.
Boomerang is launching Tuesday, and will connect with the millions of Facebook users worldwide to offer a social gifting platform focused on local businesses. They’re opening their doors with a $1 million investment by Eric Lefkofsky and Brad Keywell’s Lightbank fund. The two co-founders of Groupon are expecting that Bommerang’s CEO Zachary Smith can take advantage of the massive digital gifting industry.
When asked about their local focus, Smith commented that while online coupons and gifts have already been doing big business, it is the local merchant who is often ignored in the process. With that in mind, Boomerang will focus on paperless gifting in the form of vouchers for local businesses including theaters, spas, restaurants and sporting events. Americans currently spend north of $100 billion each year on gift cards, but because of the enormous amount of advertising that goes into those offerings, the majority of those gift cards are for national chains. Local retailers simply do not have the financial strength to compete on all of the platforms that companies such as Apple or Target can. The local retailers featured on Boomerang will have the option to offer completely free vouchers, as well as discounted tickets and packages.
Social gifting is not a new concept. Facebook actually acquired a social gifting company called Karma back in May, and the Swedish startup Wrapp has been linking to the social networks for gift-giving for months now. But Boomerang promises an even deeper integration. The app will link directly into a user’s Facebook account and find events worthy of a digital gift. It will suggest presents for birthdays, promotions, anniversaries and parties, and will then personalize the proposed gifts based on the receiver’s location and information culled from their pages about specific interests. With that level of targeted data, it shouldn’t be difficult for Boomerang to distinguish itself from these other, nationally-focused startup efforts.
Once a user chooses from the offered gifts, fulfillment happens completely digitally, through a link delivered either to the user’s Facebook account or through an email. And it’s completely paperless. The gift will be accepted by the retailer just by showing them the offer on a smartphone. Boomerang will also partner with a non-profit in each urban center, so donations in the recipients’ honor can also be an option. Check out their website to learn more. They’ve already launched in Chicago, and currently have forty merchants involved in the service.