Snapchat Product How old is Bobby Murphy

How Snapchat wants to become the big name in fashion e-commerce

The purchasing power of the “Snapchat generation” is $ 4.4 trillion - says Snap. With the gigantic number, the company behind the app, which is often overlooked in Germany and is still extremely popular with US teenagers, is vying for advertisers. It looks like Snap doesn't just want to sell advertising in the future, but wants to become an e-commerce player itself. What exactly is behind this will only be clear after Snap's developer conference in May. But evidence is already mounting. OMR summarizes which activities of the platform are pointing in the direction of e-commerce and explains the technological approach with which Snap could finally live up to its reputation as a social media company with pioneering innovations.

All platforms rely on e-commerce

In the past months of the pandemic, the topic of e-commerce has slid up on the priority lists of all major platforms: Tiktok has pushed the integration of Shopify and is pushing the topic of live shopping. This means that billions are already being sold on the home market of China. In the course of the past year, Facebook switched several shopping features live on its platforms - albeit with apparently rather mixed success.

Manageable selection and mostly sold out: Snapchat and Kylie Cosmetics shops (from left)

In the past, at Snap, the topic of shopping was limited to experiments, show cases and niche solutions. Sometimes a feature was launched through which Snapchat users can order products in photos directly from Amazon, and sometimes a baseball game was published in the app with Adidas, which could be used to buy sneakers. In 2018, the company launched its own in-app shop to sell beach towels, plush ghosts and other Snapchat merch.

But in parallel with these buzz-than-business projects, Snap has continuously built an infrastructure that is tailored for e-commerce. For example, by cloning the “mini” programs known from the Chinese all-round app WeChat. These apps in the app avoid users having to switch to an external website or app for the shopping process. Last year, weChat's mini-programs are said to have generated the equivalent of around 250 billion dollars.

Home for legacy brands and DTC newcomers

In the middle of last year Snap introduced so-called “Brand Profiles”; initially for selected advertisers and only in the USA. There you can collect your content highlights and the "Lenses" you have created - AR filters with which faces can be changed or objects placed in the room - in a central location. In addition, through a partnership with Shopify, companies can create their own shop with their products in the app.

Brands like Ralph Lauren here can use the “Brand Profiles” to collect their content and lenses and set up a shop

With the Brand Profiles, Snap wants to offer major brands and up-and-coming DTC providers a "permanent home" in the app, explained Snap's Chief Business Officer Jeremi Gorman at the Investors Day last February. These advertisers invested in content and promotion on the platform, expecting them to "put a dollar in and get more than a dollar out," Gorman said. That sounds like: Away from the buzz, towards business. Snap wants to be more than the platform for the spectacular - and correspondingly expensive - show cases and drops from experimental brands. It's about long-term partnerships, while Snap makes it as easy as possible for users to spend their money with these brands directly in the app.

From the Dickpic app to the shopping mall

When Snapchat was launched almost ten years ago, it was not really foreseeable that the app could one day become a shopping mall. The app had a user interface that drove people beyond teenage years to despair. And the central innovation of making posted photos disappear after a certain period of time quickly earned Snapchat the reputation of being primarily a tool for sending dick pics. Nevertheless - or because of it - the platform grew rapidly. Takeover bids were therefore only a matter of time. Marc Zuckerberg wanted to buy the up-and-coming competitor two years after it was launched - for $ 3 billion, which at the time seemed absurd. Even more absurd was that Snapchat founder Evan Spiegel turned down the offer.

Spiegel's stubbornness and self-confidence are legendary. Instead of in Silicon Valley, he settled his startup in Venice Beach. The image of his company and the coolness of the products have always been more important to him than anything else. And probably nobody else would have had the idea of ​​initially selling the company's first hardware product, which was developed at a cost of millions, exclusively via vending machines that were set up somewhere between L.A. and Berlin without prior notice. Although, maybe Spiegel would rethink this idea in retrospect.

AR ambitions devour millions

Because the expected hype about the Spectacles sunglasses, with which videos can be recorded and automatically sent to the smartphone and then posted, did not materialize. At some point the camera glasses were easily available to buy online, but very few customers wanted them. In 2017, Snap had to write off $ 40 million for unsold Spectacles. Which, however, did not leave Spiegel in doubt about the basic idea of ​​camera glasses. Despite the brilliant false start of the unsaleable original model introduced in September 2016, two further versions have followed to this day (and just as many new head-of-hardware positions at Snap). The current third iteration can now even record HD videos in 3D.

With a retail price of 370 euros and a design that demands a certain penchant for eccentricity from the wearer, the Spectacles are still not a product for the mass market. But that could change soon. According to information from the US tech news portal "The Information", which is always very well informed about Snap, the company is to work on the fourth generation of Spectacles. And that could finally bring the feature that turns camera glasses into a killer gadget: Augmented Reality. The glasses of the glasses also function as displays in which the real world and virtual content merge in front of the wearer's eyes.

The upcoming hype about AR glasses

Snap isn't the only tech company working on AR glasses for the masses. At Facebook, 10,000 employees * - a fifth of the workforce - are supposed to deal with VR and AR, Google has just advertised a few jobs that point to the development of AR glasses, and Apple has long been traded as the company that it could be possible to make such a gadget perhaps not affordable for everyone, but still desirable.

However, Snap is the only company that has been consistently advancing the topic of AR for years and has made it the focus of its ad products and increasingly also e-commerce ambitions. In 2018, the platforms launched a product called “Shoppable AR” that links Lenses with a “Shop Now” button. For the first time, with the support of AR gimmicks, users could buy Adidas sneakers or order pizza without having to leave the app.

AR shopping and virtual pop-up stores

Gucci launched an AR try-on feature in its own app as early as 2019. In 2020 Snap also made such a function available (Screencast: Snap)

In addition to face lenses for the face and world lenses, which add virtual objects to the image recorded with the smartphone's front camera, Snapchat also has so-called portal lenses that users of the app can use to enter virtual rooms. In February 2019, Lego Wear, the toy manufacturer's fashion line, opened a complete pop-up store (case study) using these functions, which customers could only enter via Snapchat and only shop there using the “Shop Now” button.

In June 2020, a cooperation between Snap and Wanna, the company behind Wanna Kicks, an app for virtual try-ons of shoes, was less spectacular but significantly more groundbreaking for the topic of shoppable AR. For a “Shoppable AR” campaign by the luxury label Gucci, Snap linked the possibility for the first time to “try on” a shoe virtually in real time on the display via the app and then to order the real product directly. The Gucci app has offered this feature for a long time, as has the underlying Wanna Kicks app. But thanks to Snap, virtual try-ons reached a significant audience outside of luxury and sneaker niche target groups for the first time.

Takeovers in the fashion sector

The next step in this development is foreseeable: After shoes, sunglasses and hats, Snapchats users will soon be able to try on clothes virtually and buy the real products in the app. At OMR's request, the company did not want to comment on such plans before the “Partner Summit” scheduled for May 20th. But the evidence clearly points in the direction that Snapchat will be expanded into an e-commerce platform for fashion in the next step.

In mid-May 2021, Snap confirmed the takeover of the Berlin company Fit Analytics. The startup has developed a tool for determining clothing sizes that is now used by 18,000 retailers, including big names such as The North Face, Asos, Calvin Klein, Patagonia and Puma. Fit Analytics with its 100 employees should continue to operate independently. The most important goal of the new snap unit is likely to be the integration of the tool into the social media platform in the future.

Another takeover that became public a few days ago also fits into the picture. "The Information" reported that Snap had bought the startup screenshop, often referred to as "Shazam for clothing". It is said that Snap will launch a new feature based on Screenshop at the developer conference in May. Specifically, in the area of ​​the app, where users * store their photos and videos, there will be the possibility of automatically generated shopping recommendations based on their own recordings.

Increase in the purchase probability by a factor of 2.4

How far it is from there to AR try-ons of the recommended products remains to be seen. At least there are good arguments to go for it quickly. At Snap's latest Investors Day, a product manager not only stated that virtual try-ons play a central role in the company's shopping strategy. He also reported on beta tests that showed that AR try-ons increased the likelihood of purchase by a factor of 2.4.

With the fourth generation of Spectacles, Snap will probably not also present the revolution in fashion shopping as an AR experience. But even if Evan Spiegel and his people have to crush the upcoming model again largely unsold, there will be a successor model to the Spectacles. Because the AR glasses are the central promise that Snap made to its donors at the latest Investors' Day. In addition to a positive development in user numbers and a reduced cash burn rate, the vision of an AR shopping platform played a part in the fact that Snap's share price soared by more than 20 percent in the hours after the event.

Immersive 3D experiences

The currently growing interest in the topic of AR on the smartphone is "a starting point to imagine AR beyond the cell phone," announced Bobby Murphy, Snap co-founder and CTO at the last Investors Day. "Over time, the same lenses that we already see on today's smartphones (...) will be able to be experienced in full, immersive 3D." Murphy named the first of the possible applications: "shopping for new outfits".