According to an April 2023 report by resale company ThredUp, Generation Z will account for nearly two-thirds of second-hand purchases over the next five years. American Eagle is trying to facilitate affordable resale shopping for this customer by selling pre-owned products through a Snap AR store. Previous AR stores have brought in $10 million in total revenue for the brand, and now it’s turning even more to the technology to drive sales.
Selling second-hand items in a way that appeals to Gen Z is difficult for brands, either due to clumsy website integrations, difficulty finding desired items, or a lack of appropriate ways to promote individual products on social platforms and the brand’s website , according to brand executives in previous interviews. Offering resale through own and third-party channels has been of great interest to brands in recent years. The North Face has for now released its renewed second-hand assortment in 2022.
On April 14, American launched RE/AE, an online resale store with an accompanying Snap AR pop-up store featuring 200 items. On the retailer’s app and website, shoppers can now purchase favorite clothing from a curated assortment of styles from the 80s, 90s and 2000s. Through the Snap Lens filter on the brand’s Snap account, customers can browse a virtual store and try on items through AR.
“This is 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. “It gave him more exposure than ever before.”
Brommers said the brand is prioritizing offering a seamless experience from the Snapchat lens pop-up shop to the site’s resale vertical. “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 anywhere else or be sent to ThredUp or the AE site [buy] it.”
With Gen Z using TikTok and Snapchat as their two main apps — TikTok for entertainment and Snap for communication, according to AE’s focus groups — Snapchat is a growing focus for the brand. With 750 million monthly active users, Snap has become a vehicle for brand-centric 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 swipes up on the platform than the brand’s benchmark rate. American Eagle declined to share the benchmark rate.
Anthony DiMuccio, Snap’s US head of retail and e-commerce, said Snap is working with American Eagle’s marketing team to recreate the retailer’s in-store shopping experience. “The AR pop-up store allows them to seamlessly choose and learn more about the styles they’re interested in. Globally, 92% of Gen Z 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 on a daily basis, and over 70% of users who download the app engage with AR within their first day on the app. In previous conversations, Snap’s head of luxury, Jeffrey Perez, said that high resolution and a seamless experience are key to successful AR activations, as brands see it. American Eagle operates eight augmented reality stores on Snapchat so far.
For American Eagle, AR stores have worked both to build brand image and drive sales. The brand has recorded over $10 million in revenue from AR stores that run on Snap since 2020. “As a retailer, we’re not just in the retail industry anymore, we’re in the entertainment industry,” Brommer said. “And experiences that are unique, different and eye-catching dominate and drive sales.”
But reaching Gen Z on Snapchat is a challenge. “What we’ve learned so far is to focus on a tight collection of about 20 SKUs and keep the store open for a limited period of time, maybe two to three weeks,” Brummers said, also emphasizing the importance of a seamless experience. is 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’ll bounce back and take on the new one.”
American Eagle Outfitters, Inc. reported net income of $1.5 billion, down 1% in the fourth quarter of 2022, beating analysts’ expectations.