Snapchat and E-commerce

Over the past few months, there has been plenty of market speculation about the future of Snapchat. While the photo-messaging app is still extremely popular among my friends (19-22 year olds), many question the company’s ability to stay relevant and continue to innovate against fierce competition.

For instance, their recent update received tons of backlash from the community as the “user-flow” was significantly altered. There was even a (comical) petition going around that asked Snap to roll back the update, gaining over 590,000 signatures worth of support. Yet Snap/Spiegel (the CEO of the company), are excited about the direction of their app’s experience. Here is what Spiegel had to say via interview:

Terry: And how are you seeing your community sort of react to the redesign in the way that they’re using the platform, the time that they’re spending with it?

Spiegel: We’re excited about what we’re seeing so far. And I think the best part of is that it’s beginning — even the kind of the complaints we’re seeing reinforce the philosophy. So for example, one of the complaints we got was, “Well, I used to feel like this celebrity was my friend, and now they don’t feel like my friend anymore.” And we’re, like, “Exactly, they’re not your friends.”

Terry: They were never your friend. Kim Kardashian was never your friend.

Spiegel: And so — not your friend. Maybe your friend. I don’t know. But still for us, even some of the frustrations we’re seeing really validate those changes. And It’ll take time for people to adjust, but for me, having used it now for a couple of months, I feel way more attached to an investment of service than I ever have.

As messenger, Instagram and other competitors become popular among young people, it will be interesting to see how Snapchat evolves and builds a defensible moat around their network.

I think what they are perhaps most struggling with is being able to balance advertiser and user needs. They say they do not want to compromise user experience for advertisement optimization (and this is proven via this update), but just how far will they go sacrificing revenue opportunities? As a public company, surely they are receiving tons of pressure from outside sources.

One of the more interesting opportunities I see with Snapchat – the “camera company” – is to jump into the multi-trillion dollar world of e-commerce and began using the Snapchat “lens,” aka the camera, as a means to provide for a shopping experience.

This digital store play may just be the future of Snapchat. Reports show how and why they are beginning to make this move.

Snap had limited success selling its own Spectacles glasses, despite releasing special kiosks in cities across the world to launch them. But maybe the company will have more luck with sneakers: tonight at an NBA All-Star event in downtown Los Angeles, Snap began selling Jordan brand shoes within Snapchat. It’s part of a new plan that could one day make Snap a sizable competitor in the $3 trillion world of e-commerce.

I think that having the Snap camera serve as a portal to a world of augmented reality is an inevitable component of Snap’s future success.

This portal, as they are showing, can be home to anything from Shoe sales to fun games to experiences you can have with your friends.

I am curious to see how this play will turn out…and if Instagram will adopt a similar move soon…

I think one of the defining distinctions between Snap and other platforms is that their application opens with the camera on and running. Others open to a feed, or messages, etc.

Why does this matter?

The de facto move for Snap users is to create…not consume. I think that is not by accident. Other platforms are all about consuming whereas Snapchat users are prompted to post, to film, to snap right from the get go. This advantage could turn into an AR play where the lens is the most important component of the app.