How Snapchat and Instagram are elevating their shopping games

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The Snapchat ad, left, offers a carousel of product images. Instagram Stories, right, have shopping stickers.
The Snapchat ad, left, offers a carousel of product images. Instagram Stories, right, have shopping stickers. Credit: Snapchat and Instagram

Snapchat and Instagram are stepping up their shopping rivalry as they both work e-commerce into new areas of their apps.

Snapchat is testing new Shoppable Snap Ads, a format it is first using to promote its Spectacles camera sunglasses. Meanwhile, on Tuesday, Instagram brought shopping into Stories, the vertical-video section that was copied from Snapchat. (Instagram developed Stories after Snapchat popularized the video style, which lets people string snippets of film together into a fast-paced narrative, which disappears within 24 hours.)

Brands on Instagram will now be able to drop shopping bag stickers into their Stories and sell products featured in the videos. The stickers had already been available for use on posts in Instagram's main feed, where they also indicate that an item is for sale. Stories is becoming one of the more popular features of Instagram, with 300 million people using it daily, according to the company.

"Instagrammers said they often watch Stories to stay in-the-know with brands they're interested in, get an insider view of products they like, and find out about new products that are relevant to them," Instagram said in its announcement on Tuesday.

Snapchat, for its part, has been trying to catch up with Facebook-owned Instagram.

This week, Snapchat said it was testing a new Shoppable Snap Ad that shows multiple products in a carousel of images. The company is testing the new shopping ad unit to promote its latest version of Spectacles. Snapchat is trying a new sales strategy with the camera glasses after the first-generation of the product flopped in 2016. It also started selling them on Amazon for the first time this week.

Also, Snapchat is working with more brands on what it calls Sponsored Snappable ads, which are augmented reality games created by brands with the same technology used in games like "Pokémon Go." This week, Snapchat revealed Dunkin' Donuts, the gamemaker King and Anheuser-Busch InBev were among the first brands to create the augmented reality games as ads.

Instagram has been a persistent challenge for Snapchat, because it has access to all of Facebook's resources, co-opts its best features, and undermines its unique proposition with advertisers. Snapchat's ad business is growing—54 percent last quarter year over year to $230 million—only more slowly than some of its investors hoped. It has fewer users, too, 191 million daily users to Instagram's more than 500 million.

Snapchat, however, boasts of its popularity with the young set, especially in the U.S. It was the most popular app among U.S. teens recently surveyed by the Pew Research Center.

Snapchat's new carousel-style shopping ads come on top of new augmented reality ads that also include e-commerce capabilities. Augmented reality is the technology behind the animated lenses that people put on their video selfies for fun.

Craig Elimeliah, executive director of creative technology at VML, said that Snapchat and Instagram are trying "crack commerce."

"Commerce is becoming very creative," Elimeliah says. "Fitting it naturally into Stories, on Instagram or Snapchat, makes them more valuable to brands."

Stories are becoming the main time-suck on social media, too, and they are seen as the new News Feed, an unending lineup of messages from friends and brands, only all of it is video. "People are fascinated by Stories," Elimeliah says. "There's just a lot of traction there."

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