Loop Commerce has been issued a U.S. patent covering its GiftNow e-commerce gifting service, which already is being used by retailers including Macy’s, Saks Fifth Avenue and Neiman Marcus, according to a company press release.
The company describes itself as an enabler of Gift-Commerce, or "G-Commerce." A GiftNow user can purchase and instantly deliver it digitally to a recipient, who then has the option to customize the gift to fit their size and color needs, or exchange the gift altogether before it ships.
Loop Commerce received early stage funding from PayPal and other investors back in 2013, and filed for a patent describing a "Gift Transaction System Architecture" that same year.
Loop Commerce claims to have pioneered e-gifting and four years or so after it got its start, being awarded a patent for its architecture backs up that claim. It's debatable how much a patent has value on influencing where and with whom customers do their shopping, but it doesn't hurt that the company was able to announce this just in time for premium gift-giving season.
On that note, Loop Commerce CEO and co-founder Roy Erez told Retail Dive via e-mail that the company's platform helps fuel last-minute gift shopping that otherwise might not happen because shoppers don't have time to get to a store or extensively browse an entire web site. "Now that gifts can be delivered digitally and instantaneously, without the limits of shipping physical merchandise, some of Loop’s retail partners are seeing at triple digit surge in GiftNow purchases on or before major holidays, such as Christmas," he said.
The patent describes a system that could include buyer, recipient, merchant backend and store front interface modules, among others. It also describes the process under which some of these components would be used to carry out a "G-Commerce" session. Erez said the process allows shoppers buying for others to buy "riskier gifts," adding, "Before GiftNow, a buyer may not have made this kind of purchase because they were afraid of getting it wrong, and burdening the recipient with returns and exchanges."
He said GiftNow also helps broaden a particular retailer's audience beyond their traditional “self-purchase” shopper. "For example, women’s accessories customers are typically female, but GiftNow makes it easier for men to buy these items as gifts, opening a new market for retailers and brands, in this case male (who also spend about 50% more per gift than females)," he added.
Erez claims the company is chasing a $200 billion to $300 billion market opportunity. He declined to comment when asked if the company is planning to pursue any patent infringement claims against any other companies with similar processes.
In recent years, e-gifting in general has been a growing trend, with more retailers and brands becoming interested, and several different companies introducing technology to support it. Swych, for example, has a gifting bot that engages in person-to-person chat sessions. CashStar also has an "eGifting" service, which is currently used by Nordstrom (and on the surface sounds similar to some aspects of GiftNow). In a related development, Walmart-owned U.K. retailer ASDA recently introduced a business-to-business e-commerce gift card marketplace.
Retailers like the idea of e-gifting in part because it feeds sales, but perhaps even more because it also could lead to fewer products being returned, an issue that rears its ugly head especially around this time every year. That's the ultimate aim of a process that allows the recipient to change gift details. Loop Commerce certainly is not alone in this market, but has landed several major retailer relationships, and now has one more thing on its side — a patent.