Snapchat’s Latest Updates to Its Commerce Experience Hint at Things to Come

On June 6, Kylie Jenner, Kim Kardashian West, Shay Mitchell, Spencer Pratt and Bhad Bhabie received a small update to their profiles: a shop button that lets users buy items from their respective brands (Kylie Cosmetics, KKW Beauty, Béis, Pratt Daddy Crystals and BHAD Goods). The native commerce feature is powered by Shopify and is the same technology that was previously used with SeatGeek to sell tickets to live events and in a small beta with Kylie Jenner last year.

As of now, the influencers keep all revenue on sales. Merchants receive no customer data unless someone follows through with a purchase.

The news follows after Instagram rolled out checkout on Instagram to 50 creators and five publishers in April and introduced branded content ads on June 4. Industry experts said that these new moves from Snapchat position the brand to improve its ad business, as well the new normal of brands and influencers needing to diversify their sales channels.

“This is clearly a move to cater to the top-end influencers and get them focused on Shopify and Snapchat as top-of-the funnel channels, as opposed to just their Instagram page,” said Mike Rossi, CEO of Smile.io, a rewards program company. “Snapchat’s ability to monetize becomes much stronger if they become the source of the customer data.”

Rossi said this new feature puts brands and influencers in a position to use Snapchat’s ad services more to retarget customers who didn’t end up purchasing anything. For Shopify, he said the ecommerce platform sees Snapchat as a yet another sales channel where Shopify wins because it’s simplified the checkout experience. However, it does leave Snapchat open to attempting to replicate checkout and eventually kick Shopify off the platform. It’s similar to the relationship Shopify has with its merchants that sell on Amazon; it’s just another channel.

It also puts Snapchat in a better position with brands as Instagram grows more and more expensive for brands—particularly digitally native ones—to advertise on, said Tomer Tagrin, CEO and co-founder of Yotpo, a commerce marketing company. It gives Shopify an edge as well, as the company gains customer acquisition costs on all of these Snapchat stores, while also improving the checkout experience as well.

“If the native checkout experience is successful, this has a chance to be the big change in momentum Snapchat is wishing for,” Tagrin said.

Kyle Wong, CEO and co-founder of Pixlee, a user-generated-content marketing company, said this also leaves room for Snapchat to grow its ecommerce advertising market. As Snapchat and Instagram build out a shopping experience, the two companies can better attribute direct sales of an ad.

But direct response marketing opportunities aside, Wong said Snapchat’s power lies in its augmented reality technology—so it would make sense if Snap offered that as a self-serve option down the line. This, combined with the native checkout on Snapchat, would improve brands’ ability to switch their brand marketing from creating various types of content to selecting 20 creators to micro target and segment out instead, said Wong.

“The influencer community is one of the fastest ways to co-create content to resonate with different buyers and personas,” Wong said. “Doing this with the influencers versus just the brands removes the bottleneck of creating that content.”

Plus, it gives added power and relevance to influencers and how they can, well, influence the customer funnel. Influencers gain a “hand-picked shopping experience” that’s accessible and “builds out their personal brands further,” said Kamiu Lee, CEO of Activate, an influencer marketing company. And there’s better attribution to what influencers can do, since purchases can be tracked by companies. But Lee cautions that influencers are better suited for impulse purchases than long-tail ones.

Rachel Tippograh, CEO and founder of MikMak, a video commerce company, said the the deeper integration between Shopify and Snapchat further shows how ecommerce continues to grow into distribution channels as opposed to customers going directly to the brand’s website.

“The Snapchat [and] Shopify influencer integration is similar to Instagram checkout,” said Tippograh. “Snapchat is the merchant of record, the brand gets little to no customer data, and the brand cannot capture the audience to close the sale via remarketing, which is how the majority of ecommerce sales occur. For Snapchat, and all social platforms, they’re now being put in a position to achieve competitive feature parity regardless of whether the feature performs.”