eCommerce: Social Commerce Players

Snapchat in eCommerce: Key Insights 

• User Base Growth: Growing to 406 million daily active users as of Q3 2023, Snapchat's user base, largely comprising young adults and teenagers, demonstrates its strong appeal to the younger generation and wide demographic reach.

• Diverse Ad Formats: With its range of advertising formats, Snapchat engages users in varied ways, from direct purchases to immersive experiences, enhancing eCommerce marketing. 

• eCommerce Appeal: For eCommerce, Snapchat's strength lies in its Gen Z and Millennial audience and distinctive ad features like Video Ads and Augmented Reality (AR), encouraging brands to innovate, streamline the checkout process, and use A/B testing for enhanced engagement. 

• AR Strategy Shift: Responding to the evolving AR landscape, Snapchat's recent shutdown of its AR Enterprise Service (ARES) signifies a strategic shift towards web-focused tools, balancing its significant daily AR user engagement. 

• Educational Resources: Beyond advertising, Snapchat bolsters its eCommerce role by offering "E-Commerce Essentials," an online course that educates advertisers on its solutions, aiding businesses in maximizing their digital advertising effectiveness. 

Snapchat, a familiar name in social media, has been making its mark in the eCommerce world as well. It's more than just a platform for sharing photos and videos; it's evolving into a useful tool for businesses. 

With a user base leaning heavily towards younger demographics, Snapchat offers unique opportunities for brands to connect with a tech-savvy and trend-conscious audience. As we explore Snapchat's functionalities and advertising strategies, you'll see how it's adapting to the ever-changing landscape of digital marketing, providing fresh avenues for eCommerce engagement.

Snapchat's User Base: More Than Half Are Under 24 

Snapchat's user base, based on the Q3 2023 report published by the company, stands at an impressive 406 million daily active users (DAU) globally, showcasing a consistent upward trajectory since 2019. 

The core demographic of Snapchat's user base is young adults, with men aged 18 to 24 years making up 20.5% of global users, and women in the same age group comprising 18.3%. Moreover, approximately one fifth of Snapchat's users are teenagers (13 to 17 years), further emphasizing its stronghold among the younger generation. In contrast, individuals over 35 years are significantly less inclined to use the app, highlighting a clear demographic divide.

Snapchat's geographic user distribution is also noteworthy. As per the same report referred to earlier, North America accounted for 101 million DAU in the third quarter of 2023, while Europe contributed 95 million DAU. Interestingly, the most substantial growth was observed outside these regions, where the user count surged to 211 million in the same quarter, up from 202 million in the second quarter of 2023. 

The impressive reach and demographic diversity of Snapchat's user base, as highlighted earlier, sets the stage for the platform's innovative advertising solutions. These solutions are not just varied in format but are also intricately designed to resonate with Snapchat's unique audience, blending seamlessly into the daily digital interactions of millions of users.

Snapchat's Diverse Advertising Arsenal 

Snapchat presents various advertising formats, each designed to cater to different aspects of eCommerce marketing. Let’s have a brief look at them to assess what they are, as well as their best use scenarios. 

Single Image or Video Ads are effective full-screen ads with recommended shorter durations, featuring call-to-actions (CTA) and links to online stores. Story Ads, a series of 3-20 single image or video ads, are placed in friends' Stories or the Discover section, allowing brands to narratively engage audiences. 

Collection Ads display products in four tiles for direct purchase, tailored for eCommerce. Dynamic Ads target users based on past interactions, requiring a Product Catalog and Snap Pixel for tracking.

Lenses Ads use AR for immersive product experiences, enabling virtual try-ons. Filters Ads, aimed at increasing brand awareness, add creative overlays to photos for fun and visibility. 

With an understanding of Snapchat's advertising formats, it becomes clear how these tools are tailored to engage the platform's dynamic audience. This engagement strategy is not just about catching the eye but also about creating meaningful interactions, which shape the way brands should approach their presence on Snapchat.

How to Best Utilize Snapchat for eCommerce

As referred to earlier, Snapchat's strength lies in its concentrated Gen Z and Millennial audience. The platform’s non-skippable Video Ads, Collection Ads, and AR features, like virtual product try-ons, make it an attractive choice for brands targeting a younger demographic. 

To effectively use Snapchat for eCommerce, brands should: 

• Set specific goals tailored for Snapchat. 

• Re-use high-performing ad assets from other channels. 

• Experiment with AR ads, particularly Lenses, for a unique brand representation. 

• Ensure a seamless and frictionless checkout process. 

Snapchat’s ad formats support various stages of the commerce journey, from retargeting to defining lookalike audiences. Brands should focus on clear branding and CTAs, keeping creatives simple yet purposeful. A/B testing is encouraged to optimize performance and understand consumer preferences.

Augmented Reality in eCommerce: Snap Changes Focus

While exploring the strategic potential of Snapchat in eCommerce, it's essential to consider recent developments that impact the platform's approach to AR and its application in the eCommerce sector.

Snap recently decided to shut down its AR Enterprise Service (ARES), an initiative launched earlier this year to provide AR expertise to enterprise customers. ARES included a Shopping Suite offering AR try-on features, a 3D product viewer, fit and sizing technology, and an enterprise manager for digital assets. This decision is attributed to the rise of generative AI tools that have lessened Snap's competitive edge in AR and the company's strategic shift towards investing in web tools over mobile technology. 

The company’s CEO, Evan Spiegel, noted the increasing ease for companies to create their own AR experiences, making it challenging for Snap to stand out. Despite the closure of ARES, Snap continues to engage 250 million people daily with its AR experiences.

eCommerce Courses Offered by Snap 

Adding one last nugget of information to our insights on how Snapchat can enhance eCommerce strategies, it's worth noting the educational resources offered by the platform. Snapchat provides an online course titled "E-Commerce Essentials", specifically designed to educate eCommerce advertisers on leveraging its unique direct-response solutions. 

This course is a valuable tool for businesses looking to tap into Snapchat's unduplicated audience and drive actionable results. By completing one of the two tracks offered, participants can earn a certification, solidifying their understanding and proficiency in using Snapchat's diverse advertising tools for eCommerce. This course is particularly relevant for brands seeking to deepen their knowledge of digital advertising and maximize their impact on this visually engaging platform. 

Sources: Snap, Data Reportal, Bolt, MikMak, TechCrunch, Statista