Snap Wants To Reinvent the Camera
Snap’s (SNAP) – Get Snap, Inc. Class A Report much-hyped camera sunglasses that released in 2016 sank without a trace.
Snap had been working to develop the glasses, which had a tiny, wireless video camera built in them, for the past few years. The bright-colored sunglasses also recorded video and connected directly to Snapchat via bluetooth or wi-fi.
So when they failed, it was a major setback for the social media company.
The “Spectacles” episode was similar to Alphabet’s (GOOGL) – Get Alphabet Inc. Class A Report Google Glass, which also failed spectacularly, and the losses from creating and banking on the product succeeding were substantial.
“Snap badly overestimated demand for its Spectacles and now has hundreds of thousands of unsold units sitting in warehouses, either fully assembled or in parts,” tech news website The Information reported.
Last year, Snap introduced its first pair of glasses that bring augmented reality to life.
But Snap said these sunglasses aren’t for sale —they went to AR creators who wanted to learn what people do in real-time, to make AR as realistic as possible
“Over the years, our journey building Spectacles alongside the creator community has been one of exploration, learning, and fun,” the company said in a May 2021 blogpost.
“We’ve used every iteration as a building block, opening the door to a whole new dimension of AR,”
Snap’s AR Journey
The company said during its latest earnings call that it now sees wide adoption of its Lenses across its users.
“What began as an application for visual communication has evolved into a leading augmented reality platform, where Creators are building unique and innovative AR experiences in Lens Studio and distributing them on Snapchat,” said Snap Chief Executive Evan Spiegel on the call.
“We believe that augmented reality belongs everywhere, not just on Snapchat,” Spiegel said.
Snapchat said during the same call that it has over 2.5 million lenses created, that it estimates are used by 250 million people.
The company said that was double what the same metric was during the same period last year.
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So What Do Lenses Do?
Lenses allows Snapchat users to add 3D effects, objects, characters, and transformations to their snaps.
They can also download the Lens Studio, free software that lets users create their own types of Snapchat.
“We believe that reinventing the camera represents our greatest opportunity to improve the way people live and communicate,” added Speigel.
The company said it will continue to invest in augmented reality going forward, as it attempts to gain market share in an already-crowded field of AR creators.
Snap had a challenging start to 2022 and reported a loss of nearly $360 million at the end of the March quarter.
“Our brand advertising business grew at a relatively slower rate of 26% year over year in Q1,” said Snap Chief Financial Officer Derek Andersen.
Snap Hints at E-Commerce
Snap says it wants to use augmented reality to improve the top and bottom line for retailers.
Snapchat said that it had added buying features that were making it more competitive in the AR space.
“We’re most excited about is really this intersection between augmented reality and commerce. So what we found as we’ve been growing our AR business over the years, that people use all sorts of accessories and fashion items to express themselves through augmented reality,” said Spiegel.
The company said it has also tested their product catalogs directly with retailers including MAC Cosmetics and Ulta Beauty (ULTA) – Get Ulta Beauty Inc Report, which then link to a Spectacles lens designed for shoppers.
“And we found that by partnering with retailers and fashion brands, that if we can actually use their real products in augmented reality, it dramatically improves conversion for those businesses, and so it can lead to higher sales,” Spiegel added.
Similarly Nike (NKE) – Get NIKE, Inc. Class B Report recently launched its Nike By You Sneaker customization lens in order to drive increased engagement with its Nike app and generate membership sign-ups.
Sign-ups increased as a result of the multi-cell campaign, particularly among 13- to 17-year-olds, a critical demographic for Nike’s program.
Following the success of the AR campaign in the United States, Nike has expanded its Lens effort to other parts of the world.
“These results are emblematic of a larger shift we’re seeing with AR transforming e-commerce by increasing conversion rates,” added Speigel.
