Snap Inc., parent of Snapchat, has set its sights on social commerce in the wake of its earnings report on Thursday (Apr 23). According to that report, daily active users were up to 280 million, ahead of analyst expectations of 274.62 million. Particularly notable was the growth of Snap’s TikTok analog, Spotlight, which reported 125 million Snapchatters testing the viral video segment of the Snapchat platform. Snapchatters using the app’s augmented reality tool, Lenses, grew 40 percent in the quarter.
The overall driving factor behind increased user engagement on Snapchat is said to have been new content on the platform. According to Snap, the platform added more than 300 new channels to its Discover feature in Q1.
“Snap’s strong results show us that the platform is not only continuing its reign as the app of choice for Gen-Z, but is also a go-to for brands wanting to engage consumers in a fun, entertaining way,” Yuval Ben-Itzhak, president of social media and digital marketing firm Socialbakers a.s., told SiliconANGLE. “While rival platforms like Facebook and YouTube offer similar camera technologies, they haven’t been able to capitalize on them in the same way as Snap. This is partly down to perception – users see Snapchat as the place for fun, visual, real-time content – but it’s also down to Snap’s relentless focus on innovation.”
Ben-Itzhak went on to note that the time is now for Snap to pivot from deriving revenue from its advertising platform – which he notes has an upper limit in terms of how much value it can capture of the company, – to deriving revenue from its status as a social commerce platform.
“Its recent acquisition of Berlin startup Fit Analytics is testament to this,” Ben-Itzhak said. “Snap is known for its powerful features around the camera, so the synergy with Fit Analytics is clear. While it will take some time for Snap to figure out how best to incorporate its sizing technologies into the platform, and for this to diversify its revenue streams, it’s a sign that the future is bright for Snap – a future driven by social commerce.”
And Snap’s social commerce ambitions have been increasingly on display of late, albeit quietly so. In early April, Snap moved to acquire Screenshop, once called the Shazam of fashion. Via that acquisition, a new feature in the Snapchat app will enable users to upload a screenshot of outfits they like and get in-app recommendations for similar purchases. It’s anticipated that Snap will make news of the acquisition official at its annual developer conference next month.
Snap’s expansion more directly into commerce marks an evolution that has been underway to transition from being a social media network to a super app serving a multitude of purposes for consumers. Musicians can now license their music on Snap, and a tie-up with the NBA promoted the All-Stars Game, marking the platform’s more expansive ambitions over the last year. And shortly before the pandemic began, Snap had also started expanding its ecosystem with the launch of eCommerce developer tools and augmented reality (AR) products to open up a wider range of digital commerce for consumers.
“As the shift to online shopping continues to accelerate, we believe there is a massive untapped opportunity for AR-driven product innovation in eCommerce, and that our young audience will continue to be early adopters of these new technologies and shopping experiences,” Snap CEO Evan Spiegel told investors. “One of the key verticals we are tailoring our solutions for is apparel and accessories, which is the largest shopping category by far among U.S. teenagers. We believe that helping buyers find the right size, fit and styles will reduce friction in their online shopping experience, which in turn will improve revenue and margins for our business partners.”
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