September 20, 2013
To combat the onslaught of e-commerce challenges (fraud, high transaction fee, etc.), brick and mortar stores have started to bank upon innovative startups. They are trying to use the help in creating tools to leverage their offline advantages. Entrepreneurs and VCs are also working to support such startups to provide possible growth opportunities.
One such startup ‘Jifiti’ was founded in September 2011 by Yaacov Martin, CTO Meir Dudai and CMO Shaul Weisban. Aim is to merge the unmatched shopping experience which a customer can only get in-store with the unmatched shopping convenience that he can only get online. It is headquartered in Columbus, Ohio and its development office is in Israel. It is backed by investors - Simon Property Group, a real estate company operating more than 300 malls in the U.S. and Asia, Schottenstein Stores Corporation and the Jesselson Capital Group. Recently, Jifiti has raised seed funding of $2.5 million from these investors.
Jifiti`s business model is to make gift giving easier and to drive in-store sales for retailers by offering gift givers the ability to scan and purchase an item in-store, or select from in-trend gifts inside the app, and teleport it to the recipient. Gift givers can use Facebook, twitter (@jifitigifts), email, or SMS to share gift registries with their family and friends. To redeem the gift, the ‘giftee’ has to visit the retailer’s shop to pick up the item that the ‘gifter’ has selected in his preferred color or size, or can use it as virtual gift card to pick out an alternative. Another innovative feature incorporated in Jifiti`s business model is that of partial gifting/chip in. If a family member or friend wants to chip in towards a large and expensive item, they can do so in any increment that they wish. Facebook gifting area has a few more starts up on similar lines.
Currently, Jifiti app is available for Android, iOS and HTML5 platforms. It works with around 25 retailers like Gap, Nike, Barnes & Noble, Sephora, Columbia Sportswear, Gamestop, Hot Topic, Brookstone, Athleta, Banana Republic, Old Navy, and more. Jifti plans to expand to 100 more retailers and new malls, as well as other new product initiatives that will help to transform physical items into digital purchases.
Jifiti faces competition from firms like Facebook Gifts, Boomerang, Plumfare, Treater, Wrapp, Amazon wish list feature etc. Jifiti concept is similar in spirit to Giftly business concept, except that Giftly has worked with banks and credit-card issuers to allow gift cards to be used by recipients at up to three different places. The customer is required to tap a button and Giftly credits his credit card with the amount of the gift. Jifiti instead operates with retailer’s own gift-card systems.
It is an established cultural norm in some countries to remove price tags while giving a gift to any friend, family or relatives. But in case of Jifiti, it prominently features the price of the gift, down to the penny after sales tax. According to company, featuring price of gift is required in case one has to use the option of redeeming equivalent value merchandise. So, they cannot eliminate displaying price of gift. This should not be major deal breaker though.
LTP View: Traditional retailers have faced challenges in recent years due to the growth of ecommerce companies like Amazon and a sluggish economy. These retailers may be at a disadvantage due to the overhead of running physical storefronts and must differentiate themselves by focusing on the shopping experience and related customer service. Technology platforms like Jifiti can play an increasingly larger role disrupting the traditional notions of in-person shopping thus benefitting these traditional retailers as well as customers. Technology can continue to change the way we shop and give gifts. Hence, we expect that this concept may scale in future catering to the needs of both retailers and customers equally.