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Snapchat and Amazon: Millennial Commerce Dreams Come True?

Not like it needs another one, but Amazon has a new channel and its name is Snapchat.

In a blog posted published on Sept. 24, Snap Inc. confirmed its expansion into visual search, turning the Snapchat camera—most famously known of its augmented reality (AR) puppy dog overlays—into a utilitarian tool to help users point at real-world objects and find them on Amazon.

It’s a bit of icing on Amazon’s proverbial cake; the company will already command nearly half of all U.S. online retail by the close of 2018. If anything, this new partnership cements Amazon’s status as the first stop for product discovery.

A move into visual search could help to turn things around for an embattled Snap, which has seen users vaporize this year even before a disastrous redesign that alienated users in droves, including a negative tweet by social media darling Kylie Jenner that destroyed more than $1 billion in shareholder value seemingly overnight.

At the WWD Digital Forum earlier this month, Snap Inc.’s director of sales Marni Schapiro pointed out Snap’s continuing popularity among a highly desirable, young demographic.

“An 18- to 24-year-old audience kind of lives and breathes on Snap,” she said, noting that the social media app’s hardcore user base actually covers most of the millennial spectrum by extending up to age 34. And despite Snap’s troubles, the app is one of the “big five” that have managed to achieve 50 percent or greater penetration with the global millennial population, alongside Facebook, LinkedIn, Twitter and Instagram. The Snap executive said the social app reaches 72 percent of millennials every day, and they pull up the app 25 times daily on average.

With $3 trillion in current spending power that’s projected to increase to $7 trillion by 2029, millennials are perhaps the most important demographic that brands should be thinking about right now. “They know that they see something, they watch something, they tap on something and they can buy it,” Schapiro said.

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Describing millennials’ credit card spending as “outpacing every other demographic”—which flies in the face of other findings showing these consumers as averse to credit—Schapiro noted that young digital natives spend differently than predecessors, with their expectations of instant gratification.

“This is their life: their phone,” Schapiro added.

That could explain the tie-up with Amazon. In the blog post, Snap said that users simply point their Snapchat cameras at an object—a slogan t-shirt, for example—or a product barcode and the technology behind the scenes work on identifying what that particular item is. It already has similar functionality powered by Shazam that identifies songs playing nearby.

When the camera identifies your object, an Amazon “card” will pop up on screen displaying either the details for that particular product listing or something visually similar. They can then click through and be connected to the Amazon app if it’s installed on their phones or to Amazon’s mobile website to continue transacting. If the product price is over the minimum threshold for free shipping, consumers can check out with a few taps and know their order is on its way.

Brands and retailers have been struggling to reduce the level of friction that separates inspiration and discovery from the all-important transaction. Snap’s visual search, which is available at the moment to a limited group of users, seems to reduce that friction by automatically connecting people with products on Amazon—which is where most product searches happen anyway.

Plus, it could open up a significant revenue stream for Snap, which lost more than $353 million in the second quarter—less than the year-ago period but a loss nonetheless. With enhanced camera functionality, Snap could expand outside its core user base into older demographics, increasing its relevance by giving a more mature audience a reason to join that’s far more compelling than dancing AR hot dogs. As Schapiro said, Snap’s base is beginning to see echoes of what happened years ago at Facebook; as the Mark Zuckerberg-helmed company grew in popularity with young people, their parents and other elders soon followed on board.

Snap has dabbled with mobile commerce initiatives, including opening a store inside its app to sell its branded wares and becoming the de rigueur destination for exclusive sneaker launches. But the announcement with Amazon is the largest move to date that signals Snap’s vision of a future where commerce commences as a camera-first activity.