Gen Z is set to account for nearly two-thirds of secondhand purchases in the next five years, according to the April 2023 report from resale company ThredUp. American Eagle is trying to facilitate accessible resale shopping for this customer by selling secondhand products through a Snap AR store. Previous AR stores have driven $10 million in total revenue for the brand, and now it’s leaning further into the technology to drive sales.
Selling secondhand items in a way that’s appealing to Gen Z has been difficult for brands, either because of clunky websites integrations, difficulty sourcing desirable items, or the lack of suitable ways to promote individual products on social platforms and a brand’s website, according to brand executives in prior interviews. Offering resale via owned and third-party channels has been of big interest for brands in recent years. The North Face, for now, launched its Renewed second-hand assortment in 2022.
On April 14, American launched RE/AE, an online resale shop with a corresponding Snap AR pop-up shop featuring 200 items. On the retailer’s app and website, shoppers can now buy pre-loved clothing from a curated assortment of its styles from the ’80s, ’90s and ’00s. Through the Snap Lens filter on the brand’s Snap account, customers can browse a virtual store and try-on the items through AR.
“It’s the first time we’ve put pre-loved clothing in our top navigation, which is prime real estate for any e-commerce site,” said Craig Brommers, CMO at American Eagle. “This has given it more exposure than ever before.”
Brommers said the brand prioritized offering a seamless experience from the Snapchat lens pop-up store to the resale vertical on the site. “If something catches my eye [as a shopper], the selling point for me is that I can buy it right there in that experience,” he said. “I don’t have to go somewhere else, or be sent over to ThredUp or the AE site to [buy] it.”
With Gen Z using TikTok and Snapchat as their two main applications — TikTok for entertainment and Snap for communication, according to AE focus groups — Snapchat is a growing focus for the brand. With 750 million monthly active users, Snap has become the go-to for brand-driven AR activations, especially among brands targeting Gen Z. Brands including New Balance, Pangaia and Gucci have launched AR activations on Snap. So far, the RE/AE Snap AR pop-up store has garnered 5% more swipe-ups on the platform versus the brand’s benchmark rate. American Eagle declined to share the benchmark rate.
Anthony DiMuccio, U.S. head of retail and e-commerce at Snap, said Snap worked with the marketing team at American Eagle to recreate the retailer’s in-store shopping experience. “The AR pop-up store lets them seamlessly select and learn more about the styles they’re interested in. Globally, 92% of Gen Zs are interested in using AR for shopping, and we know that sustainability is so important to them,” he said, citing The Snapchat Generation 2022 report.
According to data from Snap, two out of three Snap users engage with AR daily, and over 70% of users who download the app engage with AR during their first day on the app. In previous conversations, Snap’s head of luxury, Geoffrey Perez, said that high resolution and a seamless experience are key to successful AR activations, as brands see it. American Eagle has run seven augmented reality stores on Snapchat so far.
For American Eagle, AR shops have worked to both build brand image and drive sales. The brand has recorded over $10 million in revenues from the AR stores its run on Snap since 2020. “As a retailer, we’re not just in the retail industry anymore, we’re in the entertainment industry,” said Brommers. “And experiences that are unique, different and eye-catching are dominating and leading to sales.”
But reaching Gen Z on Snapchat is a challenge. “What we have learned so far is to focus on a tight collection with about 20 SKUs, and to keep the store up for a limited time, maybe two-three weeks,” Brommers said, also reiterating the importance of a seamless experience.“It is said with a lot of love, but Gen Z has the attention span of a gnat, and if there’s any friction in that experience, they will bounce and they’ll be on to the new thing.”
American Eagle Outfitters, Inc. reported net revenue of $1.5 billion, down 1% in the fourth quarter of 2022, which beat analyst expectations.