Need to Know
- After a series of strategic acquisitions, Snap is solidifying its position as a social commerce platform.
- Primarily targeting US teens, new Snapchat integrations allow users to try on clothing and makeup using augmented reality, shop within the app, and search for products visually.
- Last quarter, Snap grew 66% from the year prior, reaching a revenue of $770 million.
Snapchat parent company Snap Inc. is experiencing better-than-expected growth rates, according to its latest earnings report, solidifying the app’s status as not just a social media network, but a social commerce platform.
With 280 million daily active users, the image-based social platform is expanding its role within commerce. Like many platforms, brand advertising was initially the main source of Snapchat’s revenue. But now, as social commerce expands, these brands are evolving too.
“First, brands were experimenting and weren’t sure about the value in reaching such young audiences, but this continuous innovation has paid off,” explains Yuval Ben-Itzhak, president of digital marketing firm Socialbakers. “Now, brands are getting the engagement they need in ways unique to Snapchat. But a focus on innovating for advertising will only get them so far.”
After a series of acquisitions and innovations, Snapchat not only allows friends to easily send photos and videos, but they can now utilize augmented reality to try on clothes and makeup, search for wine and food products visually, and scan certain brand logos to unlock new features. Musicians can now license their music on Snapchat, too.
As the most popular social media platform among US teenagers, Snapchat is tailoring its innovations to suit teens.
“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,” said Snap CEO Evan Spiegel. “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.”
Snap recently acquired Fit Analytics, a company that provides tools to help customers find properly fitting clothing when shopping online. The acquisition is intended to encourage more in-app purchases within Snapchat.
And the social app also acquired Screenshop (a Kim Kardashian-approved app), which is expected to lead to a new Snapchat feature that allows “users to upload a screenshot of outfits they like and get in-app recommendations for similar purchases.”
Snap’s reported revenue last quarter was $770 million, up 66% from the year prior. Its augmented reality integration, Lenses, grew 40%.