While e-commerce was on the rise before the pandemic, the massive shift to digital has brought the online shopping industry entirely new product categories (and consumers) to the web. According to Adobe, The Americans set a record. 1.7 trillion dollars Online in the past two years, a 55% increase over the two years before the outbreak.
A true number of those online purchases are gifts, as revealed by search trends – from 2019 to 2020, searches for “online gift” on Google search increased 80%. But while hundreds of billions of people now turn to digital channels (e.g. Amazon) for gifting, the gifting experience remains low. That’s the opinion of Alex Ingram, at least, who runs a startup — Zest — focused on e-commerce gift flows.
Zest is Ingram’s second company after Sunlight Health, which seeks to provide brand and specialty prescription medicine at affordable prices to patients with chronic pain. Zist’s second co-founder, Jeremy Feinstein, met him while working at Flatiron Health, where he helped develop software for a cancer center.
“After Flatiron was sold to Roche, we both felt it was time to do something new,” Ingram told TechCrunch in an email. “Of course, the world of e-commerce is far from oncology. But we want to build something that helps small and medium-sized businesses succeed in an increasingly challenging environment.
With Zest, Ingram said the goal was to make the online gift-giving experience “fun.” why? By allowing e-commerce brands to install a “send as a gift” button on their product or cart page, and allowing givers to choose a digital greeting card, add their own message, pay through Shopify, and deliver the gift to the recipient via text or email. With gifts delivered through Zest, recipients — who can opt-in to delivery notifications — can add their own mailing address or customize the gift’s features (like size or color) and optionally send a thank-you note to the sender.
There really is something to giving recipients some choice in their online gifts. While it may spoil the surprise, a 2015 study from Loop Commerce (now GiftNow) found that buying the wrong size and the hassle of online returns are the top reasons people don’t want to buy gifts online.
Ingram knows full well that Zest isn’t the only online gifting tool. There’s Goody, which has raised millions in venture capital for a mobile app that lets users send gifts via text. Givingly, an online gifting service that lets users customize digital greetings and send gifts to anyone, recently closed $10 million in equity. GiftNow is perhaps Zest’s closest competitor, allowing customers to buy gifts without worrying about product details like size, color, and shipping addresses.
But Ingram argues that Zest takes a uniquely “brand-first” approach, helping brands grow by building direct relationships with their customers.
“With other gift tools, the products are thoughtful,” Ingram said. “Zest makes gifting a convenient and easy experience for shoppers, never having to leave their favorite brand’s website — as intuitive as clicking ‘Add to Cart’ or ‘Buy Now.’ We don’t believe they are gifts. They feel commercialized and impersonal. They’re so forgettable that billions of dollars in gift cards go unused in America every year, and many brands don’t want to deal with the accounting headaches that come with long-term liabilities for unused gift cards.
The Future of E-Gift Cards — As far as Ingram points, consumers seem to prefer physical gift cards over digital ones — Zest is beating rivals to get a toe in the gifting space, with about 50 customers in categories like food and beverage, apparel. and flowers. Ingram would not disclose revenue figures. But Zest has raised $4 million in seed funding, he said. by GV (formerly Google Ventures) with participation from Box Group, Character, Operator Partners, Bungalow Capital and Company Ventures.
“E-commerce and gift giving have exploded during the pandemic,” Ingram said. “People wanted to send more gifts to friends and family to bridge the real gap between them and their loved ones. And while that growth rate is slowing, it’s a trend that’s here to stay.” [But] It’s never been harder for direct-to-consumer brands to acquire and retain customers. That’s partly because of today’s growing number of direct-to-consumer brands… For brands, the value we’re delivering is first and foremost a heightened gift experience for their customers. Sending a gift directly from a product or cart page is so easy and natural that these products sell more gifts and reach more people.