Growing GiftZip With 2.0 Talent


It’s happened to all of us. You’re on your way to a birthday party, baby shower or graduation open house and you realize that you’ve forgotten something important—a gift.

You could stop and buy a bottle of wine, but what if they’re a beer lover? You could try to find something around your house to re-gift, but who wants another lotion and body spray set?

Enter www.GiftZip.com, a web-based business started by 26-year-old Michigan State grad, Sam Hogg. The company gives consumers immediate—and we do mean immediate—access to the perfect gift.

The GiftZip web site has more than 200 retailers. Customers select a retailer and a gift card amount. In a few moments, the gift "card" is sent electronically to the recipient.

It’s not a new take on the supply chain — it lets people shop quickly and comfortably—but it’s proving to be a very successful business model for Hogg, a Cadillac, Mich. native.

Recipients of a GiftZip gift have the option to use the electronic code emailed to them to shop online, or the email can be printed and scanned at the store like a traditional gift card. If the card is lost, it can simply be reprinted. If you have a PDA, the bar code contained in the email can even be scanned at the store.

GiftZip does not charge a site usage fee. “A $50 gift card costs $50, and we’re never going to change that," says Hogg. "We never want there to be a disincentive for using Giftzip.”

Entrepreneurial Hit

GiftZip made its debut at the end of November 2008 and was an instant hit, especially with the holiday shopping crowd. “We had 10,000 hits before Christmas, with zero marketing budget," says Hogg. "The user-ship on the site really speaks for itself. People love the idea. There’s nothing not to like about it—it’s fast and it’s free.”

In late January, GiftZip was selected as the second place winner in the Great Lakes Entrepreneur’s Quest, a statewide competition held each year in Ann Arbor. Out of 111 entrants, Hogg was surprised and pleased that his young company was given such recognition.

It was also evident that Hogg wasn’t necessarily expecting the win and award presentation. At the awards presentation, he was sporting a t-shirt printed with the company’s tagline: “GiftZip—Because Plastic Sucks.”

Although the business is completely web-based, Hogg doesn’t have a background in web design. “I’ve always been extremely interested in web sites, but I didn’t make the web site,” he says. “We contract the work out. I’m 100 percent a business guy. The fact that the web site came out as quickly as it did is a miracle.”

Hogg’s cousin originally designed the web site, which is now mostly maintained by East Lansing-based Netvantage Marketing. “These guys are great,” says Hogg. “They have been integral in getting GiftZip from a startup to where it is now.”

In May, GiftZip moved into the East Lansing Technology Innovation Center (TIC), which opened in 2008 and has quickly become an incubator for the Capital region's best and brightest technology companies.

Gifting 2.0

Aside from adding more local retailers as they become compatible with Giftzip, Hogg also plans to add a wedding registry to the site.

“Couples can come to our site and register for store they’d like gift cards from,” he says. “We will partner with sites like theknot.com and, if you want to get someone a nice wedding gift, this will save you from having to bring a microwave to the reception.”

The future of GiftZip also includes a way to search the site by zip code. “You’ll be able to type in a zip code, like 48912 (the zip of Lansing's Gone Wired Café, where this interview took place), and find all the local retailers we have on GiftZip.”

Since the launch of GiftZip and its wildly successful first few months, Hogg has begun to invest in more Web 2.0 marketing. “We do a lot of nontraditional marketing,” he says. “We go to a lot of expos, give out a lot of t-shirts; we’re doing a lot of viral stuff. We take advantage of sites like Facebook, MySpace, LinkedIn. Those types of things have been very successful for us.”

Very successful is a modest estimate. The Facebook group called “I Use GiftZip and You Should Too!” boasts more than 500 members. Hogg uses the group to keep GiftZip fans and users updated on company news and media attention he has received.

“Grandmas love it. Moms love it, too," say Hogg. "Email is the way everyone is connecting now and there’s no better way to send these things. Think about when you were in college. How many times a day did you check your email?”

Greening Gifting

Hogg says the idea for GiftZip came to him when he was taking a sustainable supply chain class at MSU.

The basic concept behind sustainable supply chains is to take a whole-process approach to products—from securing the raw materials to delivering the final end result—in order to reduce or eliminate waste.

“Gift cards are a great present to get, but they are also extremely wasteful,” says Hogg, who has always considered himself an environmentalist. “Seventy-five million pounds of toxic plastic goes into the waste stream every year because of gift cards," he says. "There's no reason for it."

As Hogg pursues his environmentally-friendly business venture, his idea born during an MSU lecture seem to have taken hold. “We’re signing our first clients now. We’re getting enough attention that we’re forging real agreements.”

And he hasn’t forgotten where this idea came from. “We’re hiring Spartans, my web guys at Netvantage are Spartans, and so am I. We want to keep this an East Lansing story.”

Gabrielle Johnson is a freelance writer for Capital Gains. 

Dave Trumpie is the managing photographer for Capital Gains. He is a freelance photographer and owner of Trumpie Photography.



Photos:

Sam Hogg with his staff in their offices at the East Lansing Technology and Innovation Center

All Photographs © Dave Trumpie

Signup for Email Alerts