Companies like Wantful are hoping to improve the gift-giving process for consumers while replacing traditional gift cards.
NEW YORK (TheStreet) -- As the holiday gift-giving season kicks off on Friday, many shoppers are facing the age-old dilemma: What do I get for my loved ones?
A new wave of start-ups is hoping to lessen the burden of picking presents, while helping consumers pick out gifts more unique than a traditional plastic gift card. They're also hoping to tap into the $19 billion market for online, non-virtual giving.
San Francisco-based start-up Wantful, which launched in early November, lets consumers take a short quiz about the person they're shopping for, including questions like their age, gender and tastes. The site then spits out 16 gift ideas within a specific price range and sends a physical book with pictures of potential presents to the recipient. The recipient then selects the gift they'd like and the shopper is billed.
Wantful's gifts, which range from $30 to $500, include a leather sketchbook, a tasting box of salami and cheeses and a tea set. The site has five full-time buyers in San Francisco, as well as several scattered throughout the world, who comb the world for new gifts to add.
"We're always looking for interesting products for Wantful," said founder John Poisson. "We're constantly stopping people on the street and asking, '"Where did you find that bag or scarf?'"
Wantful's investors include Foursquare chief Dennis Crowley and Alison Pincus, the founder of home goods retail site One King's Lane.
Poisson said he was inspired to create Wantful while living in Japan and recognizing the emphasis placed there on gift giving.
"Giving people plastic cards, virtual gifts and greeting cards every year got uninteresting," he said. "To have it be so wrong strikes me as a shame."
Seattle-based Thoughtful, launched this past year on Valentine's Day, operates similarly to Wantful by recommending gifts based on data the service pulls from Facebook or from the answers of a short survey.
Other start-ups are hoping to upend the gift-card market by providing more personalized and customized cards.
Giftly in San Francisco bills itself as the "cooler, more sophisticated, and smarter cousin to the gift card." Rather than giving a card that only works at a large chain like Starbucks(:SBX), Giftly lets shoppers issue cards for the nearby coffee shop, restaurant or bar.
Before using the card, the user must log onto the Giftly Web site on their mobile phone where their location data is checked using GPS to make sure they're redeeming at the intended place.
The company has raised more than $1.8 million from investors including Baseline Ventures, Lightspeed Venture Partners, RPM Ventures, SoftTechVC, Floodgate Fund and Thrive Capita.
Besides these start-ups, a handful of larger players are also looking to get into the game. Shopycat, a Facebok app created by WalMart(:WMT), makes gift recommendations based on data it has mined from the social network.
eBay(:EBAY) in September acquired The Gifts Project which allows multiple people to pitch in and pay for gifts, while interacting with their friends across their social networks.
--Written by Olivia Oran in New York.
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