Snapchat, the reality-augmenting social media app, took its time to ramp up its efforts to profit from the billions of dollars spent by social media users annually. Judging by their recent acquisitions and announcements, however, they’re ready to cash in.
Last week, Snapchat announced its Creator Marketplace, a platform that allows brands to connect with stars and influencers to create product-focused AR content and experiences for users. It also recently acquired Screenshop, an app that identifies products in posts and refers users to retailers that sell them based on user-uploaded photos, and Fit Analytics, a Berlin-based footwear and apparel sizing company that boasts relationships with 18,000 retailers worldwide.
Together, they draw the contours of Snapchat’s e-commerce strategy. The marketplace is a lure for both influencers and advertisers, while the new tech acquisitions will make it easier to put products in front of customers and convince them to buy them.
“We’re trying to remove friction from the shopping experience and reflect the fact that consumer behavior has shifted,” said Derek Anderson, CFO of Snap, Snapchat’s parent company, in a recent earnings call. “There will certainly be folks who go to a destination to shop, but more and more what we’re seeing is that content and things like augmented reality experiences can drive new types of behavior and then shopping actually happens downstream of that.”
Still, Snapchat is not only late to the game; it may also have to make substantial changes to its app to make shopping work.
The social shopping rush
With e-commerce spending set to reach $1 trillion by next year according to Adobe’s digital economy index, social media apps, which seldom sell any of their own branded or licensed products, have been making strides to accommodate in-app spending. More than 60% of young shoppers in the US find online shopping more enjoyable than browsing in-person, according to a survey commissioned by Sitecore, a San Francisco-based marketing software company , while 87% say the Covid-19 pandemic has improved their online shopping skills.
While in-app buying has been popular for some time in China, where e-commerce is the norm, it’s just taking off in the US. Instagram was first stateside, debuting its Checkout functionality in 2019. It allows shoppers to purchase items for sale without leaving their feed or opening a browser window. Instagram parent Facebook, for its part, recently announced Facebook Shops, mobile-first stores optimized for app viewing. The company expects some of its Marketplace’s billion-plus monthly visitors to buy clothing and products from brands there. (Facebook charges its online shops an undisclosed selling fee, though it’s waiving it through the end of the year as an incentive for early adopters.)
While Facebook intends to keep its users in a walled commerce garden, other platforms have taken alternate routes, directing users to retailers with livestream events and in-app features. For example, TikTok began letting its users link out to products late last year after partnering with e-commerce firm Shopify. Walmart, whose deal to buy the app alongside Oracle has been delayed by the Biden administration, hosted a live-stream shopping event that the company said garnered seven times more viewers than anticipated and grew its TikTok follower count by 25%. Users shopped live without leaving the interface using the app’s Shop Now button. (TikTok splits ad revenue with influencers who direct shoppers to products using this feature.) Since then, Walmart has written and posted songs for TikTok, like the #WalmartHolidayShuffle, while encouraging staff to post videos while working in exchange for cash.
Twitter, meanwhile, is testing shopping card tweets that display prices and include blue “Shop Now” buttons that link out to retailers. Though Twitter hasn’t disclosed how it will monetize its shopping tweets, it told tech industry news outlet Tech Crunch the test is “the first of many experiments in the commerce space and we will enrich the experience as we learn more.”
Snapchat’s plan
Snapchat plans to build its e-commerce business upon the augmented reality that made it popular among young social media users. With Screenshop’s capabilities, influencers could skip links altogether, simply wearing new products and directing viewers to an in-app checkout window. A customer worried about size and fit could benefit from Fit Analytic’s knowledge base to choose between similar alternatives. Snap CEO Evan Spiegel says Snapchat’s experiments with deploying augmented reality to help users try on and preview products in “more entertaining and immersive” ways have made for purchases downstream.
“They’ve made a move into advertising, which is a big play,” Kristen Groh, Publicis Sapient’s consumer products industry lead for North America, told retail news site Retail Dive. “But if you can take that further and actually own more of that journey all the way through to the point of purchase, you become a more valuable destination for your consumers and for your brands.”
But Snapchat’s current user experience doesn’t quite jibe with how influencers and advertisers have found success elsewhere. It prioritizes frequent interaction between close friends, and valuable metrics like views, reposts, and comments are visible only to individual users. Facebook, Twitter, Instagram, and TikTok each display metrics for other users—and advertisers—to easily gauge a post’s reach.
Furthermore, native content is only shareable within Snapchat, making it difficult for videos to reach viral popularity without recording and posting users’ snaps to other social media platforms. And Snapchat has a less than stellar track record on redesigns. A widely panned redesign in 2018 sent its stock plummeting. Another revamp in 2019 contributed to a 2.8% dip in users. New e-commerce features that too heavily disturb user experience could alienate users again.
Snapchat is also behind its competitors in terms of audience, even as it has continued to add users. Though its 250 million-plus daily active users put it well ahead of Twitter’s 187 million, that number is paltry compared to ByteDance’s nearly 700 million daily users between TikTok and its mainland China-based relative Douyin, and Instagram Stories’ 500 million daily users.
And, while its competitors may lack comparable AR-integration, that hasn’t stopped them from finding varying degrees of e-commerce success in Snapchat’s absence.
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May 12, 2021 at 04:00PM
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Snapchat wants to cash in on social media's e-commerce rush - Quartz
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