More product improvements — and quick ones at that — seem to be in the mix for Snap as its daily active user base and its Q3 loss disappointed investors late Thursday (October 25), despite a 5 percent increase in average revenue per consumer.
Snap, the developer of Snapchat, said it had 186 million daily active users in the third quarter of 2018, which represents a 5 percent year-over-year increase. But that user base is down 1 percent from the second quarter of 2018, and that decline comes as the company is still trying to get past a backlash from the Snapchat redesign earlier this year.
Snap also posted a Q3 loss of about $325.1 million, 26 percent lower than its net loss for the same period last year — and beating analyst expectations. Revenue increased 43 percent year over year, to $298 million.
Still, investors sent the company’s stock down 12 percent after the earnings report as investors apparently reacted to the company warning of more user defections.
Product upgrades are in the works, company officials said.
“I think there’s a lot of opportunity to continue improving [the Discover] product,” CEO Evan Spiegel said in the post-earnings conference call with investors. “Right now those different types of stories are all blended together in a personalized ‘For You’ feed and I think there are opportunities to improve that layout and potentially separate out that content.”
Earlier his year, Snapchat said it would close down its P2P payments offering, unable to gain significant traction in a sector of the industry that is growing and dominated by the likes of Venmo, Zelle and others, and seeking to cut expenses.
More recently, though, Snapchat announced a new eCommerce push.
One product that’s part of the effort is called Collection Ads. According to a report, that offering will “let advertisers feature different products in small boxes within an ad. This will help an advertiser better tell a story about their product.” Another tool, product catalogs, enable companies to “upload thousands of iterations” of existing product feeds, which in turn help to automate online marketing campaigns.
As well, Snap said that it was testing out a way to search for products on Amazon using the Snapchat camera. The new feature requires that the consumer point his or her Snapchat camera at a physical product or barcode to grab the relevant information via the image. The underlying software recognizes the product, after which an Amazon card appears on screen, along with a link for the specific or similar product in question. The consumer can then make a purchase via the Amazon mobile app or through Amazon.com.
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