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Snap Gains in Premarket After Deal with Amazon for In-App Shopping
Shares of Snap climbed over in Tuesday's premarket after the company agreed to a major ads deal with Amazon.
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Snap (NYSE: SNAP), the social media company that owns Snapchat, saw its stock price rise on Tuesday premarket after reports of a new deal with Amazon. Specifically, Snap and Amazon (NASDAQ: AMZN) started a collaboration allowing Snapchat users to buy Amazon products within the app.
Amazon to Let Snapchat Users Make Direct Purchases
According to The Information, Amazon and Snapchat struck a deal allowing users to purchase certain products listed on Amazon directly from the social media app. Snap’s shares rose 6.55% ahead of the Tuesday market open.
The deal is similar to the one Amazon already has with Facebook owner Meta Platforms (NASDAQ: META), underscoring the growing trend of consumers shopping through social media platforms. The deal will let customers purchase directly from Amazon’s ads without leaving the Snapchat app. Also, the users can see all relevant product details, including real-time pricing, delivery estimates, and Prime eligibility.
“For the first time, customers will be able to shop Amazon’s Facebook and Instagram ads and check out with Amazon without leaving the social media apps.”
– Amazon’s spokesperson told PYMNTS.
Meanwhile, the deal also comes at a good time for Snap, which reported better-than-expected revenue and user growth in the latest quarter. The report showed a noteworthy resurgence in advertiser numbers on smaller platforms like Snapchat.
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Amazon Targets Social Media Platforms to Enhance Shoppers’ Experience
From Amazon’s point of view, the collaboration with Snap is the latest in a series of similar deals the e-commerce giant has with social media platforms.
The company recently teamed up with Meta to allow Instagram and Facebook users to link their accounts to Amazon and provide a seamless shopping experience. The collaboration is designed to play to the strengths of both parties – Amazon can better help sellers find customers. At the same time, Meta’s discovery-based model allows users to receive targeted ads without searching.
Amazon cut a similar deal with Pinterest in April, aiming to create more shoppable content by improving its relevant products and brand offerings. Pinterest reported an impressive earnings report two weeks ago, beating Wall Street’s top and bottom lines estimates. At the same time, Amazon saw significant digital ad revenue growth in Q3, fueling better-than-anticipated profits and revenue.
Do you think the trend of social shopping will continue to grow? Let us know in the comments below.
Tim Fries
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
