What’s Snapchat’s Local Play?

Snap continues to make moves in local commerce. Historic steps include geo-filters, while more recent activity includes Local Lenses and business listings in Snap Map. These features are notable on their own, but they get more interesting when you view them together and extrapolate to Snap’s local road map.

Local Lenses enable shared and persistent AR experiences that are associated with physical locations. The “shared and persistent” part is important, as it lets users create AR experiences that stay anchored to a location — viewable across sessions and between different users.

These are the core tenets of the AR Cloud that we often reference. A framework for AR that “just works,” the AR Cloud involves spatial maps and other data that nearby devices can tap into. Because spatial maps for the inhabitable earth are too big to fit on one device, the AR cloud delivers them on demand.

As we examined last week in light of Google’s visual search play, tech giants are all building their own versions of an AR cloud that will power their respective local AR products. For instance, Google uses its Street View imagery as an object-recognition database to localize devices and overlay the right graphics.

Snapchat hopes to similarly use data from existing and ongoing Snaps that happen in specific locations. That will form a sort of location database that will feed into its Local Lenses. That way, users can pull out their phones to effectively create or discover AR content where they’re standing.

If all goes well, the outcome will be the ability to leave persistent AR graphics on local spots. The use case that Snap has promoted is more about fun and whimsy, including painting streets and buildings with digital graffiti. But it could also evolve into commerce-based use cases like storefront UGC.

On the Map

Next on the list of Snapchat local commerce ambitions is Snap Map. Once used for social discovery, it now has a commerce-oriented outcome: business listings, as we examined recently. In other words, Snap Maps’ 200 million users can now search and discover local businesses using the same tool.

This brings a local search use case to Snapchat. Sort of like Apple’s forays into local search and mapping, Snap will rely on third-party partners in various vertical areas to assemble listings data (Foursquare, TripAdvisor, Uber Eats, etc.) But most notably, it will offer self-serve SMB advertising.

Snap Map’s local monetization success will hinge on whether or not Snapchat users are interested in local search, including offline transactional intent. If so, this could be a powerful new competitor in local search, especially among Snapchat’s commercially attractive Millennial and Gen-Z users.

In fact, Snap has more 13-34-year-olds active than any other channel, including Facebook and Instagram. Quantifying that value, Gen-Z has $323 million in direct purchasing power ($1.2 trillion in indirect influence), which will only grow as the generation phases into the workforce.

This essentially means Snap can offer SMBs incremental and non-duplicated reach to an attractive audience. If we pan back to Snap users of all ages, the engagement levels are likewise notable: Snapchat users create 4 billion snaps per day, and the most engaged users activate AR lenses 30x per day.

Micro-transactions and Machine Learning

Moving on to the next piece of evidence in Snap’s local commerce master plan, it recently launched Snap Minis. These HTML 5-based apps will live in Snapchat’s Chat section and include micro-functionality like casual games and utilities. It’s similar in concept to Apple’s AppClips.

Launch partners include Coachella (coordinate and plan a festival experience); Headspace (launch meditation sessions and send to friends); and Movie Tickets by Atom (choose showtimes, watch trailers, buy tickets) — all demonstrating a wide range of use cases.

With that in mind, minis could be developed to discover, plan, and transact local activities such as dining out. The model here is what WeChat has done in China. It’s similarly a chat-based app that’s become a launchpad for micro-apps and transactional features for local commerce.

Along the same lines, Snap ML lets developers import their own machine learning. Launch partners include Wannabe shoe try-ons and Prisma’s artistic selfie renderings but could evolve into lots of local search and commerce use cases that tap into Snap’s Scan tool.

So like Google Lens, this could identify local storefronts. With a training set of local imagery, an ML-fueled tool could allow Snapchat users to point their phones at a restaurant to get business info or user-generated content, then reserve a table or invite friends via mini-apps.

Much of the above is speculative in terms of Snap’s local intentions, and how it could all come together. And the local commerce world is locked down. But it’s also possible that, while Snapchat Lenses are inflecting among shelter-in-place masses, it’s planting seeds for local commerce’s return.