Snapchat and other tech giants embrace augmented reality to appeal to homebound shoppers


By Naomi Nix

When American Eagle Outfitters Inc.’s in-person sales were hit by the Covid-19 pandemic last year, the retailer decided to make a bigger bet on an emerging tool to reach customers: augmented reality.

Suffering from declining sales and store closings, the retailer turned to Snap Inc.’s popular Snapchat video-sharing app to connect with teens who could no longer frequent the malls that make up the core business. from American Eagle.

The retailer of casual polo shirts, blue jeans and trendy swimwear launched a virtual snap-up vacation store on Snapchat, which allowed users to browse between 15 and 20 pieces at a time. As shoppers physically moved their phones into their own rooms, they also explored different areas of the digital store, where they could tap certain products to learn more about them and create a wishlist. Then they were invited to go to the American Eagle website to complete the purchase.

By the end of the race, American Eagle had sold $ 2 million worth of store products and had had 50 million pledges. Sales were a drop in the bucket for a company that closed the last quarter of 2020 with $ 1.3 billion in revenue, but represented a new way to reach younger customers.

“It was really a light bulb which, wow, it’s a new way of looking at not just engaging with Gen Z but shopping with Gen Z as well,” said Craig Brommers, director of Gen Z. American Eagle Marketing. “I think we will see an acceleration of this trend in the months and years to come.”

Covid-19 lockdowns and quarantines that have forced consumers to turn to websites for everything from food and household items to clothing and office supplies, have provided an opportunity for new projects to AR advertising. Global e-commerce sales have grown from $ 3.35 trillion in 2019 to $ 4.28 trillion in 2020, according to EMarketer estimates.

This trend was reinforced by advertisers who shifted their spending from traditional advertising media to social media platforms. Social media advertising revenue rose 16.3% to $ 41.5 billion last year, accounting for nearly a third of all digital advertising, according to the Bureau of Interactive Advertising.

“This is the next evolution in e-commerce growth,” said Mark Shmulik, senior technology analyst at Bernstein. “It just creates more categories that will allow me to start or continue shopping online which, otherwise, I might have felt less comfortable because I couldn’t try it.”

While Facebook, Pinterest, and TikTok are rolling out new ways to market using AR on their platforms, Snapchat is well positioned to tackle the problems of the augmented reality advertising boom. The app, which has some 280 million daily active users, first caught the attention of under-24s with endangered videos and photos that could be enhanced with silly automated effects such as funky hair accessories or the ability to turn your face into a cartoon. character.

The company on Thursday launched a slew of new services and technology upgrades to bolster its augmented reality-based shopping experiences. Some of the changes Snap implemented included improving the visibility of its scan feature, which works with industry partners to allow people to use the app’s camera to identify objects. daily routine and receive clothing purchase recommendations.

The number of Snapchatters engaging with augmented reality ‘lenses’ on a daily basis increased by more than 40% in the last quarter, surpassing daily growth in active users by more than 80%. While regular video ads still generate the majority of Snapchat’s revenue, augmented reality is increasingly becoming part of its growth strategy, according to Jeremi Gorman, chief commercial officer of Snap.

“The combination of this immersive behavior and the convenience of augmented reality is really essential for marketers,” she said. “It’s AR time. You have this huge community of people using AR who want to engage with it every day and it’s a wide open space for marketers.”

Frito-Lay Inc. ran a Super Bowl spot last February that asked viewers to point the camera lens of a phone in the Snapchat app at the screen to unlock a free bag of Cheetos Crunch. Pop Mix. Earlier this year, Amazon.com Inc. opened a new hair salon that uses augmented reality to allow customers to virtually try on hair colors and point their phones at products to learn more.

NYX Professional Makeup, Lexus, Gucci and other brands have all offered new, immersive advertising experiences, allowing shoppers to explore their products without having to set foot in a store. Companies are launching trial AR experiences themselves while turning to platforms like Snap, Facebook, and Pinterest to reach new customers.

More than traditional types of marketing like magazines and TV spots, customers who engage in augmented reality campaigns actively choose to explore a brand. Companies using AR marketing are also abandoning old, ambitious forms of advertising, based on Photoshopped models in idealized scenarios, in favor of encouraging customers to transform into brand ambassadors.

In turn, these social media users can adorn their face with a new version of makeup or virtually try on a clothing line and then share the result with their friends. On top of that, users who engage in app trial experiences may be less likely to return the products they purchase, potentially lowering costs for businesses.

Augmented reality “stimulates the user more than ordinary content,” said Antoine Vu, co-founder of augmented reality design company Atomic Digital Design. “You become the actor of the content that you listen to or that you watch or learn [from]. You sort of live the content. “

The technology still has some hurdles to overcome before it becomes a major advertising strategy, according to industry experts. For starters, augmented reality is most popular among Gen Z, who are around 10 to 25 years old, and who may be more digitally savvy but lack the purchasing power of consumers anymore. aged.

And business innovations that might have seemed useful to shoppers who were trapped in their homes during the pandemic may become less appealing once they feel more free to return to physical stores. AR campaigns are also still viewed by some brands as expensive and expensive to produce.

“It behooves us to make sure advertisers are clear that this is no longer an incredibly complex thing to build,” said Gorman of Snap. “It doesn’t take a lot of time. It’s not terribly expensive and they can reach their most engaged audience.” Augmented reality innovations will have to evolve if marketers are to extend the moment in a sustainable and accessible advertising strategy. Most of the companies adopting it so far are beauty, clothing, and furniture brands looking to take advantage of trial experiences.

Industry experts envision a more robust adoption of other potential use cases, even for in-person shoppers, such as labels on department store products that entice potential shoppers to use their phones to explore the history of ‘an augmented reality brand. Buyers at furniture stores can change the color of the wall to see if the sofa they want matches their decor; restaurants could help diners imagine what their food would look like spread over their own kitchen tables.

As Snapchat is a trailblazer, the competition to sell AR advertising opportunities to brands is intensifying. In 2018, Facebook began offering AR-compatible advertising features, which have been adopted by brands such as Universal Music Group and Michael Kors. The company later extended trial AR functionality to Instagram stores, where users browse collections curated by brands, and plans to expand that capability to Facebook stores. The social media company is currently testing adding AR advertising to its dynamic ads service, which allows businesses to target customers who have viewed a product online but haven’t purchased it.

In addition to Snap and Facebook, companies like Google, Pinterest, and Amazon are also taking steps to launch into AR-compatible products and services. As tech companies rush to bring more advanced AR headsets and glasses to market, they will likely pave the way for companies to embrace even more creative types of marketing campaigns.

Now, on a subway ride, “you see everyone sitting down with their necks down, looking at their devices,” Shmulik said. “I think the next wave is going to be a bit more in the lead.”

There are signs that, at the very least, AR advertising will survive the pandemic. As the U.S. economy began to open in late February, more Snapchatters posted stories and engaged with the app’s interactive map. Over the next month, more users made new friendships and chatted more with the ones they already had, according to the company. Snapchat is betting that more user engagement on the app will translate into more engagement with AR campaigns. “This is not, in my opinion, a trend that is going backwards,” Gorman said.

Last year, Snap reached out to Zenni Optical, an exclusively online eyewear brand, to launch an AR advertising campaign. In October, the company launched a trial experiment with several of its eyewear – from polka-dot models to animal-print varieties – and accessory samples, said Deanna Dawson, head of social media and content marketing.

The campaign was so successful that the company set up an experiment for Valentine’s Day, which resulted in 1.5 million trials, according to the company. Zenni Optical is launching another Snapchat AR campaign in June. “We just thought it would really be a branding game more than a performance game,” said Dawson. “We were pleasantly surprised.” As for American Eagle, earlier this year the company announced a new augmented reality jeans guide on Snapchat that allows users to twist and turn pants in three dimensions. “The new day hasn’t just dawned,” Brommers said. “It’s here.”

Bloomberg


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