Why Snap is leveraging augmented reality technology to get a leg up in the social commerce arms race

Illustration of a person with a VR headset on and dollar signs above their head.

Snapchat’s iconic special effect filters, or “lenses” as the company calls them, aren’t just for dog ear or flower crown selfies anymore. As the social media commerce race heats up, the platform is asking advertisers to bet on its virtual reality technology to drive sales.

So far, brands like Puma and Dior have, and others like direct-to-consumer intimates brand CUUP say they plan to move more ad dollars to the app because of the offering.

In recent years, the social commerce space has gained momentum with both Amazon and Pinterest launching similar shoppable, virtual try-on technology. This May at Snap’s Partner Summit, the social media platform introduced a slew of new AR try-on experiences that mimic in-person shopping. For example, DTC skincare brand TULA launched an AR lens to promote an under-eye cream. Users could see themselves in the ad as it simulated the cream application and revealed what they would look like after using the product.

“We’re just getting started on taking all the things people love about [in-store] shopping and replicating them through augmented reality,” said Mark McMaster, head of emerging commerce at Snapchat, adding that the social nature — i.e. users can try on, shop and share with friends — differentiates Snap’s offering. “The camera will be meaningful to the shopping experience. Not only when people are on the go with their phones, but also when they’re actually in stores, shopping,” he added.

Since launch, advertisers have shown an interest in Snap’s technology as a way to scale and tap into the platform’s Gen Z audience. Last week, one of the largest agency holding groups, WPP, announced an inaugural partnership with Snap to help WPP clients leverage Snap’s augmented reality capabilities. Apparel brands like Puma, Dior and Hoka sneakers have already launched ad campaigns in which Snapchat users could virtually try on products. 

Moving forward, Snap’s McMaster says his team, vying for more ad dollars, plans to build on that momentum, scaling AR capabilities to more DTC and small businesses. In May, Snap launched a creator marketplace so brands interested in AR advertising can find the right resources. The platform is also touting creator marketplace studios that use machine learning to bring additional try-on capabilities into the advertiser’s campaign. 

Advertising costs on Snap fluctuate depending on advertising goals. But per Snap, those costs can start at $5 per day. For virtual try-on specifically, some brands are achieving as low as $0.01 per product try on, a spokesperson said. Snap is working closely with smaller brands that want to drive awareness as well as those driving sales through product launches. There’s a creative strategy team in place that works category by category to help advertiser, he said.

“We’re really investing in what’s already a thriving ecosystem, but continuing to grow that so that more brands can use AR,” McMaster said. 

Snapchat isn’t the only platform leaning into virtual try-ons. Call it a social commerce arms race as social media platforms like Instagram, Snap and Pinterest look to garner a bigger share of ad dollars, playing catchup as more people shop online. Thanks to the pandemic, online shopping has skyrocketed, pushing advertisers to take a second look at virtual try-on options. According to research from consumer insight company Piplsay, 34% of Americans have already experienced virtual try-on technology, mostly for clothing and eyewear. 

In this arms race, Facebook recently launched Shops, touting sales directly from its app. Quartz reports that TikTok has thrown its hat in the ring, rolling out shoppable links, livestream shopping and product galleries in ads. And Pinterest released virtual makeup try-on capabilities in January, and a new feature that automatically saves shoppable product pins back in June. 

Traditionally, social media advertising has been approached in a “creepy, invasive, bang you over the head way” with high-frequency ads, said Ellie Bamford, svp and global head of media and connections at R/GA. Still, social commerce is yet another way for small businesses and DTC brands to scale, getting in front of more shoppers in a way that’s in sync with the customer journey. 

“Snap has a unique proposition for small to medium businesses to drive DTC shopping and revenue, and this is one of the largest spaces for them as an ad platform to grow,” Bamford said, flicking at the platform’s hyper focused direct response and conversion capabilities DTC brands have gravitated towards. 

The team at Snapchat pointed to two direct-to-consumer brands in particular for this article, who recently wrapped up their own AR campaigns on the platform: CUUP intimates brand and TULA skincare. 

At present, about 10-15% of CUUP’s media spend goes toward Snapchat, the third largest portion of budget behind Facebook and Google, according to CUUP’s director of growth, Sophie Duncan. The DTC brand has advertised on Snap for the last two-and-a-half years to retarget shoppers who were already in the market, she said. But with the recent introduction of virtual try on technologies, the company said there are plans to increase Snap spend.

So far, CUUP has run two shoppable AR lens campaigns as a brand awareness play and to diversify ad spend, something that’s top of mind for many retailers as data privacy measures continue. The first was from last October through December and the second from May of this year through July. 

“Ideally it’s something we want to basically have as an always on strategy,” Duncan said, noting that the brand has seen an increase in site traffic as well as sales, (but declined to share specific figures) “Having that engagement and that exposure through that lens, just skyrockets all the things we care about.”


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