Social Commerce – How Augmented Reality Continues to Prove its Commercial Clout

While the industry continues to focus on re-imaging the digital advertising ecosystem, eCommerce has seen significant growth over the past few years and has been experiencing its own reinvention. As we prepare for the upcoming Business of Digital eCommerce event in September, we caught up with Matt McGowan, Country Manager – Canada, Snap Inc. to learn more about the fascinating trends of the GenZ shopper. Snap has notoriously catered to this burgeoning group of emerging consumers and has developed its own eCommerce platform that is capturing the attention of young shoppers. 

IAB Canada (IABC): We are so excited to have you participate in our upcoming eCommerce event. While we’ve grown accustomed to calling on Snap for innovative branding insights, commerce is relatively new. Can you share how Snap has moved to get into the eCommerce space?

Matt McGowan (MM): At Snap, we believe that technology can be a powerful enabler – giving us the opportunity to do things that we haven’t been able to do before, or to do things better. From our beginnings almost a decade ago, we recognised that the camera and augmented reality (AR) was evolving from a tool to preserve memories, to a way in which people could express themselves and share how they were feeling with their friends and family. The camera has become a dynamic link between the physical and online worlds, bringing people closer together.

Snapchatters not only use the camera to express themselves and have fun together – they also use the camera to connect with brands they care about and to learn about products in new and unique ways. There is no better evidence for this than in the eCommerce sector, where retailers use our AR technology to blend the physical and digital, creating immersive shopping experiences that are both entertaining and have real utility. With physical retail locations closing during the pandemic, we saw retailers like Uggs and American Eagle develop virtual store and try-on experiences to give Snapchatters the shopping experience they were missing. 

IABC: When we think of social commerce, the mind goes to the influencer factor. Can you tell us a bit about how social commerce plays out on Snap?

MM: From the very beginning, Snap has focused on helping real friends connect with each other while enabling the Snapchat Generation to feel comfortable expressing themselves in the moment. Friends and family have an impactful role when it comes to shopping as well; Canadian Snapchatters say that their friends and family are six times more influential than celebrities when it comes to making purchasing decisions. Over 80 percent of parents of Gen Z report that this generation influences household spend. 

IABC: Are there any particular categories that are really strong for GenZ on the platform? Any rationale behind the connection to young shoppers?

MM: We’ve seen tremendous growth across Ecommerce verticals over the last few years as brands have leaned into the value of the Snapchat audience (we reach over 2/3 of 13-34 year olds in Canada). A key category has been retail and shopping, especially given the recent surge in online shopping and eCommerce. There’s a clear opportunity for fashion, beauty and home goods brands (to name a few) to bring trial experiences directly to their consumers through Snapchat’s industry-leading AR capabilities. Brands like Levis, Gucci and L’Oreal have all seen impactful business results from recent AR-powered campaigns.

IABC: What does the future of eCommerce look like for GenZ? It seems that their behaviors are being carved out through the platforms they spend most of their time on vs. older generations who brought their offline habits to online environments.

MM:  There are three key behaviours and needs to consider when developing eCommerce strategies for Gen Z. First, technology will drive the shopping experience. We know that 3 in 10 Canadian consumers would go out of their way to visit a store if it had interactive virtual services such as a smart mirror that allowed them to try on clothes or makeup.  This demonstrates the role that advanced retail technologies can play in enhancing in-store experiences.

Secondly, we know that 1 in 3 Gen Z consumers in Canada select mobile devices as their preferred channel when shopping for products, and more than 6 in 10 Gen Z and millennial consumers say they never go shopping without using their cell phone. Mobile devices are empowering connected shoppers across the entire shopping journey, connecting online and offline channels, and bridging shopping and social interactions. 

Finally, shoppers will demand widespread AR. In a recent research study we conducted, it predicted that in less than five years, we will see a 115% increase in the proportion of Canadian Gen Z shoppers who use AR before buying a product. Significantly, 46% of Canadian consumers who have already used AR when shopping, claim it encouraged them to make a purchase. Such findings demonstrate that AR continues to prove its commercial clout, moving consumers closer to the checkout. We can’t wait to delve more deeply into Snap’s perspective on GenZ shopping and look forward to seeing you on September 22. Registration is free for IAB Canada members and tickets are available here.