By LESLIE ANNE JONES
Reporter with Silicon Hills News
Jeffrey Schwartz and Sara Rodell, co-founders of Loop & Tie, an online gift site, based in Austin., photo by
“I was a stressed-out gifter,” she said, but a few years ago she became so obsessed with removing the stress involved in gift-giving that she quit her stock broker job in New York and moved home to Austin to figure it out.
Her solution is Loop & Tie, an e-commerce site that curates products from Texas and around the world that have a “maker aesthetic” (handcrafted cherrywood coasters, a meat sampler from Kickstarter-funded Lawless Jerky). The site gives the gift of choice: The giver chooses a price tier ($25-100), then places his order for one or multiple recipients, whom are then able to choose any item within the category, though recipients can’t see how much the items cost. The site went live in November and over the holiday season tripled initial sales projections, according to Rodell.
Owner of Tuscan Trading Ian Meltzer said in the past he usually only sent holiday gifts to four to six clients, but this year he gave to 25 people using Loop & Tie.
“Most of my customer base is men,” Meltzer said. “So in the past, I would send them something and they would bring it home and their wives would probably throw it out. This year, they could pick out their gift with their wives so everyone’s happy.”
The speed and the fact it’s possible to slate gifts for delivery months in advance are useful features for corporate gifters, but Rodell says Loop & Tie has attracted both individuals and companies, without a clear trend emerging either way.
To date, the company has raised $625,000 and would like to add $375,000. Loop & Tie is based at Capital Factory and is part of its accelerator program. The main tasks for the year ahead are raising brand awareness and gathering data to tweak the user experience where needed. “Where we go will be dictated by the consumers,” Rodell said.Her quest to close the gap between intentions and results in gift-giving started more than two years ago with a different concept. The first effort was a phone app called NOOM (Next One’s On Me) that let users give a friend a treat, like a coffee or beer, from a local Austin outlet without having to buy it in person.
In August 2011, Rodell was visiting Austin from New York when she was introduced to Jeffrey Schwartz, who also happened to be visiting. At the time, he was working in business development for Sony Pictures in Los Angeles.
“We met for coffee for thirty minutes,” Schwartz recalled. “Her dad dropped her off and waited on the other side of the coffee shop.” That was enough time to convince: Schwartz quit his job three weeks later and moved to Austin to work on NOOM.
NOOM went live in March 2012. Geographically, it was limited to Austin, but Schwartz and Rodell discovered that 70 percent of users were from outside the redeemable area. (Rodell guesses this was because Austin is a major event destination and people were using the app during travel.) The profit margins are better in the gifting business than in restaurant food, but Rodell says the main impetus to pivot directions was to remove the locational restraint.
Rodell and Schwartz have been across the country searching for worthy products. They spend a lot of time looking for items that have both quality design and a good brand story; many of the things they carry are made by people who left careers to become artisans.
“When you give a gift, you’re also giving an impression of what your tastes are,” Rodell said. The idea is to curate products that customers don’t have the time to suss out themselves.
The question of content curation in the digital sphere is almost as old as the Internet, but there’s been a market push in the past couple years leading to an increased number of e-commerce sites offering a more personalized experience, according to industry analyst Daniel Rasmus, a former director of business insights at Microsoft. “The idea of curation is fairly recent, outside of us knowledge-management people who’ve been talking about it for twenty some years,” he said.
Loop & Tie has been compared to Wantful, a start-up gifting site that helped gift givers assemble a selection of gift options for the recipient to choose from. That start-up raised $5.5 million before abruptly shuttering in September for lack of investment.Rodell pointed out that check-out time at Loop & Tie can take less than one minute because the products have already been curated for the recipient, whereas at Wantful users had to go through a longer process putting together a catalogue of products for the receiver.
For Rodell, the challenge was always to simplify the task but retain the meaningfulness of the gifting ritual in a way where fruit baskets and random bottles of wine typically fail.
“The thought doesn’t count if you don’t do anything,” Rodell said, and she’s thought a lot about how to make the thought count. In college, she majored in economics and has ever since been interested in areas where emotions interfere with making the most market-efficient decision. “Economics,” Rodell laughed, “says we should just give people cash.”