Service Taps Into A User’s Social Network To Deliver Curated Gift Ideas

PSFK spoke to Lee Linden, co-founder and CEO for Karma, a new recommendation application that uses social data to provide a tailored list of gift ideas.

In preparation for the release of our upcoming Future of Retail report, PSFK reached out to Karma, a new recommendation application that uses social data to provide a curated list of gift ideas.  Through Facebook integration, users can receive notifications of their loved ones’ birthdays, engagements, or any other significant event that a person has shared on their social networks. They will also receive a list of suitable gift ideas based on that event or occasion. Users can send the gift directly from their phone, and notify the recipient by SMS, email, or Facebook. We spoke to Lee Linden, co-founder and CEO for Karma, to get his thoughts.

Tell us a little about Karma. How does it work?  

Karma is a new service for in-the-moment gifting that lets you send real gifts instantly from your phone.  Karma is integrated with Facebook to remind you of giftable moments, like your friends’ birthdays, engagements, new jobs, babies, or simply when a friend is having a tough day.  Karma recommends a curated set of gifts for your friend and lets you send them a beautifully Karma designed card by SMS, email or Facebook, to notify them of the gift.

Karma has some unique features.  You don’t need to know someone’s address to send them a gift (because they tell Karma where they want the gift delivered).  They can also choose the gift’s size, color, or flavor, or exchange for another gift entirely (including a donation to charity).

The gifts in Karma’s catalog are curated selectively by Karma’s merchandising team (Kate Spade and Jonathan Adler products, specialty foods, wines, books and subscriptions to Pandora, Hulu, Netflix for example, they have 100s to choose from).

I was inspired to create Karma because I felt there had to be a better way to let someone know you are thinking of them besides just posting on their Facebook wall or sending a gift card, especially with all the social data and mobile technologies and data available today.

Are there any notable figures or statistics around customer engagement and usage? 

One interesting usage stat we discovered is, when picking up a gift message, the average gift recipient picks up their Karma message via text in 60 seconds, via email in 4-5 hours and via Facebook in a day.  Users can go through the process of sending a gift to someone within 60 seconds.

Karma just launched at the end of February 2012 and we’ll make sure to share our first set of user figures and stats with you as soon as we can.

We have noticed that a customer’s social graph online is finding expression in the form of add ons and tailored suggestions that can be accessed at different points of the purchase path. Third parties and retailers are tapping into user interests expressed on social networks in order to build out personalized product recommendations. Do you see this trend manifesting on a wider scale? How so?

Karma is based on the massive amounts of social data we have available today.  We communicate via social networks and gifting is another form of communication.  People share everything instantaneously on social networks – career changes, breakups, new baby, and even if they are having a bad day. Karma’s algorithm uses that social data and provides an easy, fun and instant way to give a gift at the very moment you are thinking of someone.

The future of e-commerce is social, and “social commerce” is the evolution and maturation of social media’s intersection with shopping, creating new and more meaningful ways for retailers to interact with customers through search, communication and community.

What are the opportunities for brands or retailers partnering with Karma? How will consumers benefit from using this app?

Karma gives brands and products the ability to be the hero at the exact moment when their customers feel the need to buy something for a friend or family member. People have reasons to send gifts all year long, for holidays or just to say I love you or I’m sorry.  The alternative is to post on someone’s Facebook wall or send a gift card.  Even though gift cards are a lucrative $100 billion industry, they are often impersonal and many gift cards are never used, 12% in fact.  There is a better way to for brands to build longer term customer loyalty through gifting using today’s mobile and social technology.

For the gift giver, Karma’s helps you never miss a gifting moment, and the gift receiver gets a delightful unexpected surprise. Karma has based much of its product design on the findings of Stanford researcher, Baba Shiv who studies neuroeconomics. He’s discovered, for instance, that when you receive a gift unexpectedly (when the recipient is not expecting a gift), the brain is padded with emotion about that person and how you feel toward them.  And gift giving activates the Dopamine effect of reinforcement (anticipation followed by positive reinforcement).  It’s almost as powerful as food and sex, which are the 2 strongest motivators for animals.

Thanks Lee!

Karma

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