Shopper Experience
29 April 2022
AR shopping is about to get even bigger on Snapchat
Snap's latest tools enable brands and users to curate augmented reality experiences.
Puma is an early adopter of Snap's Camera Kit. (Photo by Snap)
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Snap is rolling out a new line of tools designed to bring more products into augmented reality.
At the Snap Partner Summit on Thursday, shopping tools for Snapchat played a prominent role in the new announcements made by the Los Angeles-based company.
Snapchat’s camera capabilities have long made the social media platform a leader in augmented reality. In turn, the company is leveraging AR to grow shopping features, offering the equivalent of a mirror at the mall in social media form. One milestone came earlier this year, when it rolled out tools such as AR Shopping Lenses that allow users to get a taste of what they would look like in a brand's items through images of products superimposed on their likeness. With a big audience on the platform and cameras built-in, it's at the forefront of platforms transforming the try-on, and making social media more shoppable in the meantime.
With this week’s launch, it has a new slate of tools that allow brands and retailers to add to the available items and create new augmented reality experiences, both on Snapchat and, with one feature, within their own ecommerce marketplaces. Here’s a quick rundown:
Dress Up
Snap has a new home for augmented reality shopping for users within its app. Dress Up offers a dedicated destination to browse and try on looks from brands, retailers and creators. This is currently available through Lens Explorer, and will soon appear near the camera in navigation. Snap is also creating space for shopping on its profile pages, where users can return to looks they have favorited or added to a cart.
3D Asset Manager
This is a web content management platform that allows businesses to “request, approve and optimize” 3D models for any product in their shopping catalog, Snap states. This feature also has sharing capabilities that allow retailers and brands to approve 3D models from other brands that are already in Snap’s asset management system.
AR Image Processing
This technology, developed by Forma, offers a way to turn existing product photos into augmented reality-read assets for Snapchat’s Lens experience. Snap describes the steps like this:
Step 1: Partners upload their existing product photography for product SKUs they currently sell on their websites.
Step 2: Product photography is processed with a deep-learning module that transforms retailer’s photography into AR Image assets.
Step 3: Businesses can then select SKUs with AR Image Assets to create try-on Lenses using new templates in a simple web interface.
AR Shopping Templates
Now in beta, this feature is designed to allow brands to import assets and create AR experiences, without having any prior AR skills. It expands a capability that was previously available for beauty brands to apparel, eyewear and footwear. Snap will also expand into furniture and handbags, allowing items in AR to be placed on a surface.
Camera Kit for AR Shopping
This software development kit allows brands and retailers to bring Snap’s AR try-on capabilities to their product detail pages. Available for mobile devices and soon on websites, Puma will be the first brand to use this tool to integrate its Snap experience on to its own website.
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Macy's sees 'reset year' for ecommerce
The retailer's marketplace is expanding quickly.
When it comes to ecommerce growth, was the pandemic a blip or a new trendsetter?
As we move further from the height of COVID-related closures, it’s a question that will start to be answered through the lens of history.
So far, the narrative of ecommerce growth in the U.S. from 2019-2022 has gone like this: Ecommerce’s share of overall retail saw a huge spike at the height of the pandemic in 2020-21, when goods in general were in demand and online shopping was necessary to preserve health and safety. Experts looked out and saw a permanent exponential change in the penetration of ecommerce as a share of retail that would last beyond the pandemic. Then, in 2022, everyone went back to stores and the trendline came back to 2019 levels. Growth was no longer exponential. There was still growth, but it was not happening as fast as during the pandemic period.
With this in mind, it’s worth pointing out that 2023 is the first year that there likely won’t be a pandemic-influenced swing to influence ecommerce growth. It is also a year where demand has suffered challenges amid inflation and interest rate hikes.
So as we seek to determine the importance of ecommerce to overall retail, it’s worth it to continue taking a close look at what growth trends retailers are seeing now, whether ecommerce is remaining resilient amid consumer pullback and how retailers are preparing for the future.
The latest example arrived this week from Macy’s. It’s a fitting one for the times. Overall, Macy’s is seeing a slowdown as consumers pull back on discretionary purchases, with sales declining 7% in the first quarter versus the same quarter of 2022. Digital sales were down 8%.
Macy’s is particularly susceptible to the macroeconomic headwinds that many brands and retailers are facing, as spending among the middle-income consumers it counts as a primary customer base is particularly softening, said GlobalData Managing Director Neil Saunders.
But while ecommerce is slowing overall, the importance it gained to Macy’s business during the pandemic is remaining in place.
In 2019, ecommerce made up 25% of Macy’s revenue, CEO Jeff Gennette told analysts on the company’s earnings call. That jumped to a high of 44% in 2020. By 2022, digital reached 33% of sales after the pandemic boom. In the first quarter of 2023, it remained at 33%. So, while the trend line dipped after shoppers returned to stores, ecommerce share still settled in at a higher post-lockdown point than it was before the pandemic.
This came in a quarter in which traffic was “relatively good” across both online and in-store, Macy’s CEO Jeff Gennette said. It was “flattish” online, and slightly up in stores.
“We do expect that this is the reset year with the penetration between them,” Gennette said. “But we do expect more aggressive growth in digital in the future versus stores as we think about '24 and beyond. And that's going to be foisted by a lot of ideas and strategies.
Over the last year, the retailer has made investments in boosting ecommerce, even as shoppers returned to stores. In a bid to boost the assortment of goods available online, Macy’s launched a marketplace in September 2022 that welcomes goods from third-party sellers.
The marketplace had an “outstanding” first quarter, said Macy’s President Tony Spring, who is poised to succeed Gennette as CEO next year. Gross merchandise value increased over 50% when compared to the fourth quarter of 2022, while the average order value and units per order for marketplace customers was 50% above those not shopping at the marketplace.
Macy’s is continuing to build the marketplace even as it racks up sales. The retailer added 450 brands, ending the quarter with 950 brands.
This is helping to draw in new customers, as well as younger existing customers who are buying more items, resulting in increased basket size.
“We're very excited as to how marketplace is really attracting the Gen Z customer, particularly in categories where it was not economically feasible for us to carry in the past,” Gennette said.
In the end, Gennette said a strong digital and social presence is key to attracting younger consumers. That's a different type of shopper than other age groups.
“We know the younger customer starts first online,” Gennette said. That behavior will still be in place as the generation gets older, and gains more buying power in the process.
Going forward, Macy’s is seeking to expand the model to other retail banners in its portfolio. Bloomingdale’s will open a marketplace in the early fall.
The Macy’s ecommerce trajectory isn’t that different from the wider U.S. ecommerce narrative detailed above. With one quarter of 2023 data, there is evidence that ecommerce share settled out at a higher point after the pandemic than where it started before COVID arrived. There is flattening now, but the retailer is taking it not as a sign of a slowdown, or a signal to change course. Rather, it sees changing consumer behavior as a reason to build for the future.
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