Snapchat’s design is confusing. But the company was proud of it. Its users could make sense of it. Unfortunately, its earnings report was a disaster. It showed that its current design doesn’t help in picking up new users quickly. Hence, the company announced that it’s going to overhaul the app’s design.
But the company has no idea if the audience would embrace it. Then again, it’s going to take that risk as it believes the new design is sufficient to provide its business with long-term benefits.
Snapchat’s parent company, Snap, reported $206 million revenue. A considerable drop in its expectations of $238 million. After the earnings report, Snap’s shares fell 22 percent in aftermarket trading. But it recovered slightly after.
The app’s daily users are said to be 178 million. It fell short of its expectations of 180.5 million. It also confirmed that Snapchat Spectacles failed and cost the company $40 million. When it filed to go public, the company labeled as a camera company. Although Spectacles didn’t generate much revenue, it was a core product for Snap.
But the company was upfront during its IPO filing and stated that it would find it difficult to turn a profit. Furthermore, it admitted that the app’s appeal was with younger users. However, the experts criticized Snapchat’s ad strategy. The strategy will ensure that it can transform its popularity into a financial success.
A lot of people are skeptical about its advertising because it faces tight competition against Facebook and Google. Many experts stated that the advertising engine of Snap wasn’t proven. They doubted its ability to fight against advertising giants.
After the recent earnings report, the company is facing an uphill battle to get new advertisers to use its platform.
That’s why Snapchat is planning to redesign the app to make the platform more appealing to newcomers and advertisers who wish to use the platform’s popularity. But it has the main problem. Its loyal users might not like it.
Devoted users of the platform are fond of the design, and they like how it operates. Thus, if the redesign would roll out, some loyal users are likely to leave the app.
But it might be necessary for the company to persuade new people in using its service. It might imitate other platform’s playbook on how to attract new users. It’ll also use data analysis to help in personalizing the content that its users want to see.
The company is currently developing a new way to provide its millions of daily active users a better Stories experience that takes advantage of machine learning without compromising the editorial integrity of the platform.
While Snapchat is busy redesigning its app, other tech companies are working on copying and making their own versions of the app’s innovations. Facebook, for example, has rolled out its version of Snapchat Stories for the main app and Instagram.
Snapchat is fast to implement augmented reality. But, this, too, may have a risk of being overtaken as this area becomes the primary focus of Apple, Facebook, and Microsoft.