drop shipping, so that when you chose the hammock or the earrings, we pass the instructions to that partner and they package it up and send it directly to you and invoice us. The shipping is built into the cost.
X: On the Wantful site the gift amounts are in specific denominations like $100, $150, $200, $300, and so on. How does that fit with your hunt for new merchandise?
JP: We find products that fit those denominations. If I am buying a gift for $200, the wholesale price might be $97 or $102, but it’s a very narrow band. If we found a product with a wholesale price of $165, that is an awkward number for us, so we would tend to skip it.
X: So you’re mainly profiting on the retail markup. But is that the whole idea, or is there another business embedded in here, such as analytics? You must be gathering a lot of data about which products people are choosing for the gift books, and which ones gift recipients are choosing from the books.
JP: I wouldn’t say there is an analytics play. What is most interesting to our partners is that we are selling their products to customers who are perfectly suited for them. And we are presenting their product beautifully, shot by us, in this book alongside other equally brilliant products. We are not in the business of selling user data. We are starting to understand some very interesting things about how people buy and give and so forth, but that is not what our business is all about.
X: But surely, you’re able to see which products aren’t selling well, and make decisions about what options to offer to givers.
JP: Our recommendation algorithms take care of that for us. And because we don’t own any of the inventory, there is no risk to having items that don’t sell well. There might only be one person who would want a product. If we can discover them and present it to that recipient, we have done a great job. That is what mainstream retailers cannot do. They can’t afford the risk.
X: You showed me around the office before we sat down, and it looked like the biggest part of your team were the merchandise people. Do you think of finding great products as one of your big strengths?
JP: If you look at some of the other plays, the mobile-focused gift giving sites, they are basically gift cards. They are using affiliate models that are not going to make them a lot of money. A big part of what we do is help the gift giver find the perfect gift. We have six or seven people on that. We have one woman who wanted to join the team when we first started, but she was about to go on a year-long honeymoon. We engaged her to be a buyer while she was on her honeymoon, so she spent time in every country she visited finding great products for us. Likewise, we do that in San Francisco and New York. We ask people for recommendations. We stop people on the street and ask ‘Where did you get that scarf?’ So it’s equally that, and crafting a really thoughtful, meaningful experience around gift giving.
X: Yes, speaking of that—how do you pull off the mass customization of the gift books? They have an expensive feel to them.
JP: Without saying too much about who our partner is and how they do it—it’s not Shutterfly, but the time I spent at Shutterfly taught me a lot about what is possible in the world of mass-customized printing. When I first found a partner to manufacture the books, they were skeptical. They said ‘That is a low price point and a quick turnaround and a very high level of fit and finish.’ But knowing what is possible, I was able to push our partner in a direction that they are quite excited about. The problem was, how do you find that balance between something that feels super-high-quality, but comes in below a certain price point.
X: You said you were inspired by the Japanese gift-giving culture. What do you think that culture is all about, and what elements were you able to appropriate for Wantful?
JP: It’s a big question. Japanese gift-giving culture is very different from what we do in the West. But one of the things that has always inspired me about Japanese culture is the care with which they present things. I think it’s all about ritual. It’s very easy to interpret it as being transactional, because it’s very codified—‘In this context, you bring the $100 melon, and it’s the most perfect cantaloupe with the perfect stem and the perfect box.’ But it’s not about the melon. It’s about the ritual of having given this perfect gift and knowing the rules and being generous and kind in that way. That’s a little bit different from the Western style of gift-giving, which is more focused on the individual and their interests, but I think the presentation and ritual of it is something that we want to bring back to the mass market, as opposed to the Hallmark or Walgreens approach to gift-giving.
X: What will be the big challenges for Wantful as you try to scale up to 10 times your current size, or 100 times?
JP: Holding true to our standards on the merchandising side is quite important—making sure we are following through on our promise of delivering a great gift and helping you give well, so the recipient is actually happy. We see that manifest in the number of people who discover us first as a recipient, and then become gift givers, and in the number of gifts each individual gives. Those numbers are much higher than we anticipated, given how early we are.
The way we have designed it, we can scale very quickly. Our vendor relationships work as a sort of capillary system, so that with even our smallest, one-person design partners who are only able to handle a small number of orders, we can throttle their presence so they don’t get overtaxed. Beyond that, there are essentially no restrictions.
