Issue No. 257: Snap Inc. and eCommerce

Watermark_ByTailorBrands

Snapchat, Nike, Darkstore and Shopify teamed up to pre-release the Air Jordan III “Tinker” on Snapchat with same-day delivery. There are a few implications to consider here.

In the United States, eCommerce is dominated by consumer search. Product discovery still lags behind. While Amazon continues their efforts to insource a tried and true discovery mechanism that is currently outsourced to digital publishers (in exchange for affiliate revenue), the hole in the system remains. So, leave it to the embattled media company known for discovery to attempt the leap.

Perhaps Snapchat is attempting to lean into this role? There might just be a product market fit.

Snapchat’s push into eCommerce is a long time coming and it couldn’t happen at a more appropriate time for the Los Angeles media company ($SNAP). Here’s what Jason Del Rey noted about the the partnership between Shopify and Snapchat for Nike’s Jordan brand:

Over the All-Star weekend, Nike hosted a special concert in Los Angeles, the host city of the game. Attendees were guided to use the Snapchat camera to scan a code displayed on a basketball-hoop backboard to view the new Air Jordan III “Tinker” sneaker in the app.

Guests were then able to purchase the sneaker right within Snapchat with the help of technology from the e-commerce software company Shopify. And most of the kicks were delivered to customers on the same day, thanks to a logistics startup called Darkstore.

@DelRey, Recode (read here)

May 2016’s 2PM Issue No. 46 was entitled “Snapchat, the eCommerce Giant.” It was titled as such because it featured a now-noteworthy article by Maya Kossoff that preceded much of the conversation that you will read about Snapchat’s recent experiment with Shopify and the Jordan brand.

The ability to buy tickets without leaving Snapchat is the biggest coup for Snapchat and Twentieth Century Fox, which placed the ad buy, and it suggests the company is making serious moves toward expanding into the e-commerce space.

@MeKosoff, Vanity Fair (read here)

Snapchat’s potential to combine advertising campaigns with ease of purchase sets itself apart from Instagram who has yet to develop a partnership with Stripe or Shopify. I was excited about that direction before Snapchat focused on their Spectacles campaign. But even with Spectacles, Snapchat began honing the ideas that we’re now seeing.


Here’s what I wrote in 2PM Issue 191 (2017): 

The most successful marketing campaign that Snapchat has led in the last two years wasn’t through traditional advertising, it was through traditional retail and eCommerce. […]  There is a virtuous cycle in modern digital media and eCommerce that shouldn’t be ignored. Consumers want to go where they are influenced to act. And advertisers would be smart to create content in those same spaces.


 

With Jordan, Snap is dipping its toe into the possibility of monetizing just about anything via app-integrated sales channels. Snap openly classifies itself a camera company, rather than a social media app. That’s why it’s explored products like Spectacles, which turned sunglasses into a video camera. And while right now, Snap is only selling one limited edition sneaker drop for Jordan through a live event, it’s easy to imagine Snap leveraging the close relationship that its 187 million daily active users have with its camera to any number of third-party brand partners.

Mark Wilson, Fast Company (read here)

Facebook has done a marvelous job of iterating around Snapchat’s original ideas, all but trouncing the high flying Snap, Inc. Only time will tell if this flavor of content x commerce is another one of those ideas that we’ll find reimagined for Instagram.

Read more of the issue here.

Issue No. 223: Content / Commerce 2.0

American Retail Failure

By: Hendrik Laubscher on Issue No. 212

The retail job losses have not become a political hot potato due to the lack of a retail version of UAW (United Auto Workers).  The large labour unions have ensured that mining and other manufacturing jobs have been getting more political attention.

In saying that – in all honesty there a few things at play with this situation:

  • There are way too many retail locations in the US – locations were seen as capital generation instead of capital expenditures. Best example of this for me is when Howard Schultz came back to lead Starbucks they closed under performing locations – I don’t know of any retailers who have done that.
  • Retailers have signed leases that were not properly forecasted. A 20 year lease is a significant investment that has little validation from sales etc.
  • As ecommerce has grown retailers have not invested properly. Target, Nordstrom are but a few that have been future proofing their businesses. I believe their headquarters being in less populated areas Seattle and Minneapolis has lead to them being more nimble than normal retailers.
  • Retailers have forgotten that they are a community asset and employ local breadwinners – they have not evolved with the de-urbanization of retail.
  • Your point on logistics staff being the new low income job champion is spot on and is driven by the location of warehouses of online retailers.
  • Retailers have also lost focus – an experience for customers does not mean having a branded coffee shop or pizza shop inside your location. This hit me while I traveled in the US in October 2016.
  • On demand services have added value that should have been driven by retailers. Instacart, Curbside, etc. are retail functions that were neglected.
  • The retail board of all major retailers have struggled to attract younger members. I hate playing the age card but the progressive retailers (Target, Nordstrom and lately Walmart) they have young blood.
  • Retailers have not adapted the roles that their staff plays. Nike and others have made sure that their staff are helpful, knowledgeable and approachable. This for me boils down to founder DNA and some retailers have struggled with stock price declines and thus have been forced via financial performance to make changes.
  • Off-price retailers are not online but provide customers with pricing that makes purchases and repeat purchases a possibility. Why are TJMaxx able to show good yearly performance? A smaller footprint, I believe.
It is a complicated story that needs data and graphs to communicate this sad tale. Amazon is not the only factor.

See more of the issue here.

Issue No. 215: One 🔥 pitch deck.

0f1bc73b-bb36-4045-b6e0-cf80f683866b.jpg

A last word: 11 easy things

TACTICS: Research by Business Insider indicates that there could be up to $4 trillion dollars in merchandise just waiting to be recovered in abandoned shopping carts. With the right tactics (which we’ll teach you), you could recover up to 64% of that. Before you can do that, however, you must first understand why people leave. First, think about the people who visit your site.
Some are random, some came from paid ads, and some are from social media. Just because they landed on your store on purpose, however, doesn’t mean they’ll buy. But those people who add something to their cart and reach the checkout? They’re motivated.

If they got that far, what caused them to leave without taking the plunge?

Want to decrease cart abandonment? Read on.

See more of the issue here.