Adidas, Coty try on Snapchat's new AR shopping tool

Brief:

Snapchat unveiled a new feature enabling brands to combine e-commerce with augmented reality (AR), which overlays digital images on a real background seen through a smartphone camera. Marketers can now sell products to Snapchat users in the U.S. and U.K. with a service the messaging app calls “Shoppable AR,” per the Drum.
Adidas, beauty supplier Coty, gaming company King and STX Entertainment are among the first advertisers to use the shoppable AR format. The technology lets advertisers place an on-screen button in any AR lenses running on Snapchat. The button can be programmed to complete actions like pointing users to online stores or apps where they can buy products.
Shoppable AR is part of Snap’s effort to drive revenue from its camera feature, per Recode. Snap already offered a version of direct-response ads in other parts of its app, including placements amid publisher content in its Discover section.

Insight:

It's clear that brands and social media companies are interested in making social shopping work and developments like Snapchat's AR shopping tool suggest that realizing the potential is closer than ever.

Social shopping has, for years, been held out as an important potential area of growth for social media, but has been slow to take off, in part because consumers haven't trusted sharing their payment credentials on these platforms. Snapchat's new AR shopping tool attempts to address this by directly users to brands' own websites or apps to complete a purchase. On Snapchat, Adidas has an AR selfie lens to promote its Deerupt running shoe that directs users to its website. Coty brand Clairol is letting users try its new hair color in AR before pointing them to its website for purchase.

The downside of directing users to a brand's website, instead of completing the purchase within Snapchat, is that this adds extra steps, which could hamper conversion rates. Snapchat hopes to overcome these hurdles through the use of AR, which give users an opportunity to virtually try-on or otherwise engage with a product in a way that integrates the experience with the real world. This scenario has potential with today's younger consumers as Nike's Jordan Brand discovered earlier this year with a limited-edition prerelease on Snapchat that leveraged AR to recreate Michael Jordan's famous free throw line dunk and quickly sold out. Snapchat's AR lenses are used by 70 million people a day, according to parent company Snap.

Snapchat had been dropping clues over the past few months that a bigger push into shopping was coming for the app. In February, Snap opened an in-app e-commerce store that sells merchandise inspired by its iconic corporate logo and digital characters. The arrival of AR shopping on the platform follows Instagram's recent expansion of shoppable posts into 8 countries. Pinterest is also betting on social shopping and has attracted big retailers like Home Depot.

Snapchat’s shoppable AR comes as parent company Snap seeks additional ways to monetize the app’s features, including the camera that is central to its image-messaging service. In-app shopping follows a successful campaign with Nike this year. Snapchat invited users to scan exclusive Snap codes to open the app and purchase the shoes in minutes. The sneakers sold out in 23 minutes, Snap said.