Snap SNAP has announced that it acquired Berlin-based start-up Fit Analytics, which counts more than 18,000 retailers and brands as users of its solutions. The financial terms of the deal were not disclosed.
Fit Analytics’ technology lets people enter their measurements into a tool that uses machine learning to match those dimensions up to clothes or shoes and find the best fit.
The Fit Analytics sizing platform combines the world’s largest database of garment and fit information with hundreds of billions of dollars of purchasing records and consumer preferences, which is expected to enhance Snap’s e-commerce technology business.
Snap is acquiring the company as part of a long-term push to bring more e-commerce and in-app purchases to Snapchat. Moreover, Fit Analytics’ tie-up with leading apparel brands and retailers, including North Face, Asos, Calvin Klein, Patagonia, and Puma, are expected to attract ad dollars for the company in the future.
Markedly, Snap has made about 20 acquisitions so far across areas like advertising technology, location-based services and services related to augmented reality products, and forays into music.
Snap Inc. Price and Consensus
Snap Inc. price-consensus-chart | Snap Inc. Quote
Gen Z User Base Aids Snap’s Ad Revenue Growth
Advertising forms the mainstay of Snap’s revenues. The company is helping advertisers reach millennials and Gen Z audiences, who are more active on immersive mobile platforms like Snapchat.
Snapchat’s partnership with e-commerce giant Amazon AMZN to introduce visual Search, a camera-powered search engine in its app, is a tailwind.
In the United States, more than 75% of the Gen Z population, comprising 13-24-year-olds, watched shows and publisher content in the quarter under review. Snapchat platform is also growing rapidly in other international markets, such as India.
On Mar 10, Snap released a report in partnership with Oxford Economics that looks at the role of Gen Z in driving post-pandemic recovery and digital economy across six markets — Australia, France, Germany, the Netherlands, the U.K. and the United States.
Per the report, Gen Z is expected to become a dominant force in the workplace with the number in work across the six markets trebling to 87 million by 2030. Moreover, they are expected to support $3.1 trillion of consumer spending in these markets in 2030.
Snap’s popularity, with 265 million daily active users, provides the company with a competitive edge over the likes of Facebook FB, Google and Twitter in attracting ad dollars. However, competition from Facebook and Apple AAPL is a serious threat as their entry into the AR advertising business might hinder Snap’s dominance.
In fourth-quarter 2020, Snap announced a partnership with cross-platform game engine, Unity Software, which will extend the reach of Unity’s Ad supply to Snapchat advertisers. This will also bring Snap’s technology to game developers through Snap Kit tools.
Additionally, this Zacks Rank #3 (Hold) company’s transition to automated or programmatic auction of Snap Ads is driving its advertising revenues. The company’s advertising products include Snap Ads and Sponsored Creative Tools like Sponsored Lenses and Sponsored Geofilters. Moreover, Snapchat’s new conversion tracking tool, Snap Pixel, is also gaining traction.
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