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Snapchat could become an augmented reality fitting room in the near future. 

What was once a quirky feature of the app, is now crucial to its push into e-commerce — one that’s been bubbling away ever since AR Lenses arrived on the app in 2015. Like many trends, however, the pandemic changed the way people shop in big and small ways. Snapchat responded in kind. It grew its shoppable formats and Stores functionality during the pandemic, inviting advertisers and creators to connect their content directly to opportunities to purchase within the app.

The investments all served to make commerce on Snapchat more experiential, which is the real draw for marketers and retail bosses alike — in particular, how social commerce on the app is becoming reliant on AR. Walmart, Hollister, JD Sports, Under Armor and Coca-Cola are among a raft of businesses either running or preparing to use the app’s AR features, from shopping lenses to stores, over the key festive shopping period. Not only do they see AR on the app as a way to goose sales given that shoppers can virtually try on the merchandise before they buy, doing so potentially reduces the need to return items they don’t actually want. It’s the latter point that stands to really pique the interest of retail businesses — many of which have had to grapple with the inevitable side effect of the online sales boom: more products are getting returned.

“We’re trying to prove out a hypothesis that if you have a virtual try-on experience are you then less likely to return that item,” said Ed Couchman, the general manager for Snapchat in the U.K. So far, the business has anecdotal evidence to back this theory up. “Conversations have shifted a bit from talking about the app as a marketing and media play to how it can be used to solve wider business challenges,” said Couchman.

Agency execs can vouch for this:

“More so than at any other point, our conversations with Snapchat are moving beyond the ad platform and more about the broader e-commerce system it’s building,” said Jessica Chapplow, head of e-commerce, Havas’ retail division Havas Market. “It’s no longer enough to just understand the exposure of the ad. Increasingly, our clients want to see the tangible sales impact.”

Even publishers are taking a keen interest in commerce on Snapchat. 

“We’ve identified social commerce as a key opportunity for us in 2022, as both a social-first publisher and an e-retailer, but how we weave Snapchat into our e-commerce plans is dependent on the solutions they introduce,” said Mel Chapman, co-CEO at media company Jungle Creations, which runs the Craft Factory arts and craft show on Snapchat Discover. “Key things we’d want to look at are how the user is able to purchase via the platform (for example, do they purchase in-app or are they directed off-site?) and how Snapchat’s solution integrates into our existing e-commerce platforms.”

To push discussions like this more, Snapchat hired former Asos exec Amber Sayer last month as its first senior head of retail and e-commerce in the U.K. Her arrival is seen as something of a step change for this part of the Snapchat Enterprise business. Previously, it was run by someone who wasn’t a retail veteran, for example. Sure, that direction was fine for Snapchat’s retail aspirations to a point. In fact, several beauty and fashion companies have Snapchat’s AR tools and those ads that they’re using all year round, rather than for specific campaigns, said Couchman. But Sayer’s experience should go some way to opening Snapchat to more execs — and subsequently more budget holders — across more organizations and industries. So rather than Snapchat continuing to scrap solely for media dollars that aren’t already locked into Google, Facebook and increasingly Amazon, it can also go after the money they’re yet to dominate. 

“Amber’s arrival means that we have someone who doesn’t just have connections to marketers, but also go to either the trade or shopper marketing teams too,” said Couchman. “She knows how to navigate around businesses when it comes to the tech and development teams too. Think about the pixels that need to be implemented to make sure our ads are able to show whether or not they drove a sale. Amber allows us to have those more three-dimensional relationships across organizations.”

Indeed, social commerce is on track to become a significant sales channel for companies, and it’s a race against the clock to see who can innovate fast enough to win consumer mind share and branded commerce budgets. JD Sports hopes to steal a march on the rest of the pack. Currently, the sportswear retailer is working with Snapchat to figure out how to get people to use the media it buys on the app while they’re waiting to try on a pair of sneakers. “At those moments, people will be taking out their phones anyway and we think that there’s a way to enhance that experience,” said Couchman.

While the growth of retail over the last two years may have come in part from the fact that shoppers have been avoiding busy high streets for some time, in the future that won’t be so much the case. Rather, the growth will come from how apps like Snapchat are able to help businesses enhance the in-store experience. Doing so will be key to Snapchat carving out a sustainable business from the blurring lines between retail and media — particularly when it comes to how younger shoppers behave. This audience has always been central to the app’s pitch for media dollars. Expect the same for retail.

“Despite a fantastic last few quarters, headwinds are still heavy for Snap,” said Yuval Ben-Itzhak, chief of strategy at Emplifi. “Instagram and TikTok are grabbing more and more eyeballs, especially among the all-important Gen Z age group. And their feeds are better optimized for ads to display. Over the coming few quarters we will likely see that its social commerce offering will be its rocketship.”

It’s a rocketship that may get an unintended boost from Apple, which has made it harder for advertisers to measure the effectiveness of their ads. Understandably, marketers are weighing up whether they can continue advertising somewhere they can’t see clearly how well it works. Natalie Silverstein, chief innovation officer at Collectively expanded on the point: “Snapchat’s efforts to reduce friction on the path to purchase will be appealing to brands that may be seeing decreases in conversions from other media.”

So, by trying to get those sales to come from within Snapchat via features like in-app shopping or by giving users the possibility to virtually try on clothes and purchase them without leaving the app, the platform can show direct business impact by connecting a purchase decision to a brand’s ad investment. That will likely appeal to advertisers that are now unable to do multi-touch attribution as a result of Apple’s changes, said Couchman.

“What we’re doing here could help advertisers circumvent some of the challenges thrown up by Apple’s App Tracking Transparency protocol because it’s a useful way for them to make proper assessments because they’re able to get a true read on sales from the app,” he continued. The idea being that it could encourage more marketers to buy more inventory in the app if they believe it will drive sales, Couchman said. “We’re telling advertisers don’t just do one thing like a try-on campaign, do multiple things like building a profile page that can hold all of your AR experiences.”

That said, the benefits are more likely to be felt early next year, not now. 

“It’s too big a time for advertisers to miss out on during the holiday spending so the appetite to experiment isn’t as strong,” said Couchman. “Once we move into Q1 when there will be more rigorous analysis on media spending then we will see more of that demand come over on the back of ATT. We’re in a great place because we can draw a straight line between ad exposure and purchase.”

The post Snapchat eyes trade marketing dollars as AR-driven commerce grows and the holidays approach appeared first on Digiday.