Snap Inc. SNAP owned Snapchat has published a new report on the rising value of Augmented Reality (AR) as a complement to the online purchase process and how modern shoppers are using AR tools – like try-virtual on and other visualization elements – to make more informed product choices.
The report, based on a survey commissioned by Snap and Publicis Media, covers responses of 4,028 shoppers aged between 13-49 years in the United States, the U.K., France and Saudi Arabia. Per the report, two-thirds of consumers are less likely to return a product after using an augmented reality feature.
Nearly three-quarters of respondents are likely to buy clothing after using an AR experience in the future, followed by retail (70%), beauty (69%), travel (64%) and food and beverages (60%).
Per the survey, 80% of respondents feel more confident in their purchases using augmented reality tools.
Snap Inc. Price and Consensus
Snap Inc. price-consensus-chart | Snap Inc. Quote
Snap Pushes Into AR Shopping to Attract Users
Snap has been promoting its research surrounding AR commerce on the Snapchat platform. An Accenture report found that the global social commerce market could reach $1.2 trillion by 2025.
In the first quarter of 2022, the social network’s revenues rose 38% year over year to $1.06 billion. More than 250 million Snapchat users engaged with its AR features daily, on average, and its daily active users increased 18% year over year to 332 million.
In April, the social network released a report indicating that 92% of Gen Z shoppers prefer AR reality tools for e-commerce. That survey of 16,000 consumers across 16 markets found that Gen Z consumers favored AR shopping tools over millennials and Gen Xers.
In May, the company unveiled multiple new AR tools, including a flying camera called Pixy, designed to connect brands with shoppers on its platform. Pixy will cost $230 and will be sold in the United States and France.
Moreover, the company released new AR lenses at Electric Daisy Carnival, Las Vegas, as a part of Snap’s Live Nation Entertainment LYV partnership. Snapchat entered into a multi-year partnership with Live Nation to use AR experiences, which have been created with artists. The companies plan to collaborate with artists at various music festivals throughout the partnership.
Snap will begin offering a variety of free services for AR developers, including data storage, to help developers in creating more complex AR experiences.
Snap will also roll out a new feature called "Dress Up" on Snapchat in which users can browse AR shopping filters that let them virtually try on clothing and accessories.
Over the years, Snapchat has partnered with brands and companies like Toys R Us Canada, American Eagle, Gucci and Adidas to engage with products beyond the typical 2D images.
While Snapchat tries to attract brands to its platform with its AR tools, this Zacks Rank #4 (Sell) company is expected to face stiff competition from retailers like Amazon AMZN and Pinterest PINS, which have begun releasing their virtual product testing features.
Snap’s shares have fallen 72.7% in the year-to-date period compared with the Zacks Internet-Software industry’s decline of 53.3% and the Zacks Computer and Technology sector’s decrease of 32.3% in the said time frame.
Earlier this month, Amazon released an AR tool to allow shoppers to try on their shoes virtually. Last year, AMZN had released its Room Decorator tool, an augmented reality feature that lets consumers virtually style their homes with furniture.
Similarly, Pinterest launched its tool, Try-On for Home Decor in February, enabling furniture shoppers to visualize furniture in their homes using AR technology.
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