Impact of Snap Inc.’s Foray into the USD18 Billion Sunglasses Market
Snap Inc’s entry into the USD18 billion sunglasses market is primarily motivated by the instant messaging company’s need to differentiate itself from other competitors, like Instagram and Whatsapp. Spectacles (the name of its sunglasses) is priced at near cost to encourage take-up rates as well as to propagate continued usage of Snapchat, in an environment where new social media platforms threaten their core business every day. Snap Inc.’s foray into the sunglasses market is a bold move, which is saturated with big players like Luxottica Group SpA, Safilo Group SpA and Essilor International SA.
2011-2015: % Brand shares of sunglasses in the world
|Brand||Company Name (GBO)||2011||2012||2013||2014||2015|
|Ray-Ban||Luxottica Group SpA||18.3||18.1||18.1||18.2||19.5|
|Oakley||Luxottica Group SpA||4.9||5.1||5.1||5.1||5.3|
|Gucci||Safilo Group SpA||2.3||2.3||2.3||2.3||2.4|
|Nike||Vision Service Plan Global||1.9||1.8||1.8||1.8||1.9|
|Dolce & Gabbana||Luxottica Group SpA||1.7||1.7||1.7||1.7||1.8|
Snap Inc’s Spectacles a ‘hit’, Google Glass a ‘miss’
One key factor why Snap Inc. excelled in launching its sunglasses as compared to Google was its price point of USD130, as compared to the latter’s hefty USD1,500, which hovers around the price range of the number one sunglasses brand in the world, Ray-Ban. This price point is efficacious in attracting buyers for its novelty, reflected in the snaking queues for these spectacles at their special pop-up locations. Moreover, the short lifecycle of tech products and the initial hurdle for consumers in adopting tech products is probably why Snap Inc.’s video camera sunglasses are priced at less than one tenth of Google Glass in order to encourage a high take up rate. Positioning itself in the mid-priced sector is perhaps the best way for Snap Inc. to infiltrate the market like how Snapchat infiltrated young minds – instant.
Secondly, Spectacles answered the demand of a key target audience – the millennials. This generation which grew up in the proliferation of social media sites, are inclined to record every moment of their life and to upload these onto their social media to share with their friends. This is exactly what the Snapchat app allows them to do. Now, Spectacles will become an important tool to facilitate this process in no less than a discrete manner, just like how Snapchat users allow their audience to view their snaps only at one glance and where any screenshot of these fleeting snaps in a bid to record the moment permanently is a social media faux pas.
Thirdly, rather than marketing the product as a tech gadget which would then reduce their target audience to a limited pool of early adopters of technology products, Spectacles launched its product for the masses via pop-up vending machines through the “Snapbot”. This is in comparison to technological products that are typically showcased to industry experts first at electronic conferences/exhibitions. Spectacles is also managing and limiting the distribution of its product and keeping consumers glued to their pages on where the next “Snapbot” would land. This helps to maintain its novelty as it aims to defy the odds of the short product lifecycle of technology products.
Spectacles not a threat to traditional sunglasses makers but serves as a wakeup call
However, the impact of Snap Inc.’s Spectacles would be minute on the USD18 billion sunglasses industry. Despite being vulnerable to changes in fashion trends and consumer preferences, in order to sustain a steady stream of revenue in the sunglasses market, superior production capabilities that improves prescription lenses remains key. After all, consumers would want a pair of sunglasses that serves its primary purpose – to protect their eyes from harmful UV rays.
Instead, Snap Inc.’s entry should serves as a wakeup call to traditional sunglasses manufacturers to be aware of the change in technological advancements and to be constantly seeking to leverage on technology to improve the quality and function of sunglasses.