See something out in the world that you want to buy? Now you can just Snap it up.
Santa Monica’s Snap Inc. announced a partnership with Amazon on Monday that will enable users to point their smartphone cameras at a pair of shoes, the barcode on the bottom of a shampoo bottle, or any other object in the world and instantly see how much that object is selling for on Amazon.com.
This partnership marks Snap’s first venture into point-and-shoot shopping, allowing it to compete for social media-driven sales against photo rivals Instagram and Pinterest. Both of those companies recently rolled out e-commerce integrations that allow users to easily buy what they see on their screens.
When Snapchat users scan an object or a barcode with their cameras, a window pops up within the app showing that and similar items, along with price, review scores and Prime availability. If they click on an item, they’re taken to the Amazon app or website in their browser.
The new feature is rolling out to only a small percentage of U.S. users as an initial trial run. Snap declined to share precise user numbers or any details on the financial relationship with Amazon. But the retail giant currently pays out 1% to 10% commissions, varying by product category, to websites that refer customers to its online marketplace.
A nearly identical feature is available in Amazon’s own smartphone app, but Snap’s user base is unique. A report from the Pew Research Center in March 2018 found that 78% of U.S. internet users ages 18 to 24 use Snapchat, and research commissioned by Snap has found that its users are 20% more likely to make mobile purchases and 60% more likely to make impulse buys than the general public.
“Amazon makes decisions really based on the data that you put in front of them,” said Brian Wieser, an analyst with Pivotal Research Group who covers Snap. “Maybe they saw that Snapchat’s user base was less likely to go to Amazon directly. Snap’s strategy is to throw things against the wall and see what sticks. ”
Snap’s stock price saw an initial 1.5% bump in response to the news but ended the day down 2%, to $8.95. Snap stock has fallen almost 45% in the last six months, much of that coming in the last six weeks after a second-quarter earnings report that showed the daily Snapchat user base had shrunk from 191 million to 188 million over the three months.
Scott Galloway, a professor of marketing at the NYU Stern School of Business and founder of the research firm L2 Gartner, sounded a cautionary note, citing Amazon’s track record of putting partner companies out of business once it figures out their business model.
“Amazon partners with firms the way a virus partners with a host,” Galloway said. “It doesn’t usually end well.”
But Snapchat’s user base and a recent connection to an Amazon insider — five months ago, Snap shelled out $20 million in stock to hire a 20-year Amazon veteran, Tim Stone, as its CFO — could point to a deeper relationship down the line, Galloway said.
“Snap is probably going to be below $5 a share within the next six months. It’s being put out of business because Facebook is sucking the oxygen out of the room, and Amazon and Facebook hate each other,” Galloway said.
Snap Chief Executive Evan Spiegel “can’t sell to Facebook, since that would be admitting defeat. The person he most likely wants to sell to is Amazon,” Galloway continued. “So this might be the two of them saying, ‘Let’s date.’”
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