Home-Grown Firm Climbs Corporate Ladder

James Maguire

Updated · Feb 11, 2004

Yes, GiftTree sells gifts online, but no, its goal is not to be an Internet gift shop. Instead, explains company CEO Craig Bowen, the site is a gift services company. The difference may be slight to an outsider, but it makes all the difference in the site’s e-commerce strategy.

As a gifts services company, GiftTree’s focus is the corporate market. “We manage the gifting functions of their business, and have them outsource it to us,” said Bowen. The Vancouver, Washington-based site handles all of a firm’s gift giving, from baby announcements to holiday perks, sending out anything from fruit baskets and flowers to desk clocks and stationary sets.

The problem, Bowen explains, is that it’s a new concept for many companies. “They’re not really receptive to it,” he admitted. “It’s kind of like the idea of a PR firm, which when it was first introduced, people said ‘what the heck is that?'”

But, he continued, “We are making headway, and after we make little chinks in their armor, they’re like ‘Wow, you’re right, you can do this for us and it does make sense.'”

Apparently it does make sense to some corporations. GiftTree had $8.5 million in sales revenue in 2002, according to Bowen. Although this can’t be independently confirmed because GiftTree is privately held, the Portland Business Journal recognized GiftTree as one of the area’s fastest growing businesses. After hiring its first employee in 1998, the site now employs 60 people.

The corporate gift outsourcing market has grown crowded, notes IDC analyst Jonathan Gaw. Corporate buyers enjoy the flexibility and ease, fueling the rise of top players like GiftCertificates.com. All these competing sites means “it’s a pretty rough market,” Gaw said.

Home Grown
In 1996, Bowen and his wife decided to develop an Internet business. Bowen had studied marketing and computer technology in college, and traveled extensively. His wife, whom he met while traveling in Spain, had no previous business experience. They looked at numerous possibilities, including online DVD rental.

“Gifts made sense because of the distributed nature of family and friends and how busy everybody is,” he said. The couple also saw the potential for repeat business if software could be developed to aid the site’s corporate business. They launched GiftTree out of their house.

Off-the-shelf e-commerce software was scarce then, so they hired programmers to write it from scratch, including an early shopping cart. This provided their first break.

“Yahoo! liked it so much they invited us to be the featured merchant in the 1997 holidays,” Bowen said. “The shopping cart had a gift suggestion tool, where you type in characteristics about a person and it suggested a gift. It was more of a gimmick, it worked about half the time.”

Although the software was extremely expensive to build, “it launched us into an opportunity mode,” said Bowen. The Yahoo! deal attracted publicity and sponsorships from other sites.

Excellence in CRM
GiftTree has learned how to cater to corporate buyers. “In any corporation of any size, administrative assistants place the orders,” Bowen says. “So we’ve built the support they’re looking for.”

The site sends out e-mail reminders for important gifting occasions, and offers live chat and phone help for gift giving questions. It stores address books, lists of gifts given to employees and corporate credit card numbers. Customers provide GiftTree with addresses and gift card messages and the site handles the rest. The site’s software also helps with corporate expense tracking.

For extra peace of mind, the site provides delivery notification. “We have one person who is dedicated to tracking shipped packages. We know within hours if something has not gone out,” Bowen says.

“We’ll spell check their gift card message, but we don’t change it without contacting them. If the message doesn’t come off the way they think it will, we give them a call. That gives us an opportunity to say, ‘Look how on top of it we are.'”

“We’re just killing ourselves to make them look good,” Bowen says.

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