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Snapchat to win social commerce?

Updated: Jan 27, 2021

Remember Snapchat? The AR leader’s got some snazzy new features that could outshine your latest crush, TikTok, and capture a much broader audience than Gen Z too.

Since COVID-19 kicked off its chaos, we’ve all been obsessed with TikTok. It’s the new kid in school, super cute and hella funny, we Just.Can’t.Get.Enough. Right?

But as the dust starts to settle from its dashing, mood-lifting arrival, and more information comes to light about how many liberties its potentially taking with our privacy and data, our ex, Snapchat, has been working on itself. And it’s looking pretty good, let me tell you.

Will Snapchat become a titan of ecommerce?

Snapchat has given itself a breakup makeover and a half, with a new look and new product features that amp up its augmented reality and shopability, including:

Dynamic Product Ads initiative: Free to access, it allows a business to automatically generate ads based on the product categories it sells, which are then showcased in different formats and pushed over multiple international markets – saving advertisers time and effort and allowing them to launch measurable ‘always on’ campaigns that will drive e-commerce sales. Sports retailer JD Sports is among the first to adopt DPAs in APAC.

Leaning into its gifts – aka - gamified, play moments: Sponsored lens opportunities are still 🔥 fire🔥 in 2020, so Snapchat continues to push its Lens AR feature, which can transform a person’s face. In April, L’Oréal debuted eight branded Lenses for Garnier, Lancôme, L’Oréal Paris and Maybelline, and in June, Procter & Gamble launched a new special Lens for its Aussie brand called Embrace the Curl that features its purple branding and connects women being reticent to go to hair salons.

Introducing the ‘shoefie’: Why stop at a lens-enhanced face? ‘Shoefies’ will allow users to digitally “try on” shoes and shop them, much the same way they try on makeup and sunglasses. T the new tool takes Snapchat one step closer to enabling users to digitally try on a full wardrobe, and in turn, attract the fashion industry’s advertising spend.

Enhancing localisation: Places on Maps is a new feature that will allow businesses to promote themselves as communities exit lockdowns, and give Snapchat a bigger slice of advertising revenue from small businesses.

While Snapchat has introduced updates that make it easier for people to discover, advertise and buy products on the platform, Instagram has dominated the social shopping conversation with multiple shopping-centric features including product tagging, checkout and a tab devoted to shoppable posts. TikTok is also offering a ‘Shop Now’ button, tested by Levi’s.

But Snapchat is in a unique position: it has a largely Gen Z and millennial audience (latest stats show it now reaches more than six million Australians, including 85% of all 13-24-year-olds, 90% of all 18-24-year-olds and 65% of 13-34-year-olds) and sophisticated augmented reality lenses are endemic to the platform. It's a natural complement to fashion, which has struggled to solve the problem of online try-on.

A new augmented reality

While puppy and aging filters aren’t an obvious bridge to shopping, Snapchat has been playing the long game on augmented reality. It reports that more than 170 million users engage with AR daily, nearly 30 times a day.

To get there, Snapchat had to partner with an external developer called Wannaby, who worked on a similar thing with Gucci’s Ace sneakers in Gucci's own app. The new shoe try-on feature will allow users to try on products or click out to buy the product (which Snapchat calls shoppable AR) and also lets brands gauge customer response to product launches and understand purchase intent, says Wannaby CEO Sergey Arkhangelskiy.

One brand that worked with Wannaby found that customers who interact with AR are twice as likely to make a purchase; another noted that customers who used AR try-on before purchasing returned 30 per cent less than the customers who did not.

Snapchat is the AR OG, but TikTok is a formidable opponent

Snapchat might be the home of social AR, but it isn’t the only tech company investing in it.

Like Snapchat, Instagram allows AR try-on for makeup and sunglasses. It hasn’t expanded AR try-on to shoes or clothes, but filters can be triggered by a specific design, like a logo. Through this, one company created a T-shirt that lets people “change” the design of their shirt through AR. And Pinterest, while not a social media platform, added makeup try-on in January.

TikTok might not be far behind: it is preparing to offer an AR ad format, but it's not clear if this will include try-ons.

“TikTok has eaten Snap's lunch in terms of being the epicentre of culture among younger generations,” says Rachel Tipograph, founder of digital media analytics company MikMak told Vogue Business. Thus, she says, it’s no surprise Snap felt the need to build products like dynamic ads and AR shopping - both allow brands to measure their return on investments.


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