My note yesterday got quite long digging into the data we have on AppleTV+, but I was going to talk about the Apple Glasses rumor that has gained some traction since so many readers emailed or messaged me on Twitter about it.
As far as the details go, any educated guess could have told you what Jon Presser included in his video as far as features. Given he did not go into any depth of the look or the UI, I strongly doubt he has seen them, and even if he has, he has not seen any final version or design.
Apple develops many product prototypes well in advance, so whatever they are toying around with right now is nowhere near final. Suffice it to say, take any rumors or so-called “leaks” about Apple Glasses with as many grains of salt as possible.
The video was a vast amount of smoke and mirrors, in my opinion. But the one thing I want to spend a moment on is the timing. While I’m as interested and anxious for Apple to release their AR glasses, I do not believe 2021/2022 is the timing. I even think 2023 is a stretch. Part of my conviction is the technology itself. Both the display and projector needed to amplify high-resolution text or images so your eye can see them without straining is not there yet. Some can argue Apple has had some breakthroughs in a lab, and while that is possible, it is also unlikely given the science behind some of the core technologies they would still need to acquire from an outside source. I stay deeply connected to every part of the supply chain and have seen many of the best solutions for AR lens and micro projectors available, and they are all nowhere near ready for a mass-market product.
The other part of my conviction is market readiness. I’ve had the opportunity to research augmented reality products and experiences in the last few years. The responses from even the most enthusiastic of tech adopters convince me the market’s readiness to accept AR glasses is still years away. The eyes the most difficult place to place technology by far. The wrist, ears, etc., are much easier and offer use cases for everyone. The challenge with glasses will be both in the number of use cases where value can be found. The challenge I see comes specifically to non-glasses wearing humans. This is an area where glasses will differ from the watch. Why would a non-glasses wearing human leave glasses on their face for a small number of use cases? Will they just put them on in certain circumstances where they want the AR experience, then take them off and put them back in their pocket? Yes, this isn’t that different from a phone experience, but a phone experience has drastically more use cases today than glasses will at launch.
In my mind, if Apple can crack the value for non-glasses owners that will convince them to leave them on for long periods, even though they don’t need corrective vision, then I think the market will be more willing to adopt. For existing glasses owners, it makes sense since they leave glasses on all day anyway, having an AR experience pop up in certain circumstances makes some sense.
This is an exciting category, and it will also be one of the most difficult to crack we have ever seen in a consumer product. Apple is extremely well-positioned here, but I think they still need a few more years with AR Kit adoption to support enough use cases to appeal to a broader market at launch. That is why I think the next two years are too early.
Facebook has taken one step closer to executing the broad vision of social commerce. This trend has been talked about, but rarely have we seen it executed well and Facebook shops hope to accelerate the potential viral momentum of a brand or product discovered on their service.
Facebook has essentially created a way for merchants to create better storefronts, within Facebook, and provide a complete experience all the way to checkout, and potentially tracking, all through FB. FB working to support Shopify is a huge benefit here since I think Shopify provides the best commerce platform for brands wanting to control their total customer experience. But other backend solutions will be supported as well.
Some data point here for context. When it comes to advertising, and specifically ads that lead to commerce, both Facebook and Instagram have the highest conversion rates. In a recent advertising and media survey conducted by UBS Research, they found Instagram had the highest engagement of monthly users taking action when seeing an ad at 60%. Facebook was a close second at 54%. Both services also had the highest conversion to purchase after clicking an ad than any other services with Instagram at 22% and Facebook at 21%. While those conversion rates seem low, they are among the highest in an industry that usually sees below 10% conversion rates via ads.
UBS does this survey every year in May, and they specifically called out Facebook and Instagram as the only social media services who saw year over year growth in the category of social commerce and conversions where all other services like Pinterest, Snap, Twitter, etc., saw a decline. What this suggests is Facebook remains the best positioned to capitalize on social commerce.
Social Commerce’s Time?
Can social commerce succeed now in ways it could not before? I think the answer is yes, as the foundation has now been laid, partly accelerated by COVID-19, in ways that did not exist years prior. First of all, e-commerce is now so deeply entrenched in the global customer, thanks to COVID-19 in ways we have never seen before.
All you have to do is look at the growth of major merchants e-commerce platforms across the board, and the incredible acceleration in US e-commerce as a percentage of retail which when from 16% to 27% in a matter of 8 weeks. And it is still growing. Merchants everywhere were forced to e-commerce just to stay in business, and I strongly doubt they give up that strategy as a part of their business going forward.
The role of social networks will be critical in the hardest part of commerce, which is product discovery. In particular, connecting commerce to the social graph is an entirely untapped opportunity. I could see either Shopify or Facebook having a dedicated experience where I just see the things friends in my social graph are buying. This is one of the most powerful product discovery mechanisms. This gets even more powerful if the concept of Facebook likes moves to something like recommend. I’d love a way to see what new products bought or discovered by my friends are recommended by them because they like/love them so much. This would be a powerful addition to the social graph concept of social commerce. Here again, Facebook is the best positioned to succeed.