BrightHaus Digital Marketing Agency

Snapchat Redesign Not Working Out

May 6, 2018

Change is usually a good thing, particularly in the world of technology, but the redesign by Snapchat was met with user negativity right from the beginning. Users of the social media platform, which utilizes timed photos and an online story board to share with other users, were not happy to learn that there were going to be changes in the form of a redesign. Now, it seems like the opinions of consumers have hit home as stocks dropped following the first quarter earnings report for the company.

Stockholders watched as a more than 15% drop ricocheted across the market, putting them on edge and allowing the consumer population to echo a well resounding, “I told you so.” The reaction might make you wonder how many users the company lost to make stocks drop so drastically following the earnings report, but it wasn’t users that lost the company stock, it was capital. Snapchat actually saw a growth of just 4 million users to their always expanding market, but it seemed that each user over this quarter spent less on the application, bringing its value down substantially.

 

Why All the Fuss?

So, how much money does it take for the stock market to turn against an otherwise integral part of the social media universe? Apparently, $0.32 can be seen by the drop from $1.53 to $1.21 between last quarter and this quarter. This is an amount spent per user, including the entire user base from around the world. It might seem like a small number, but when you add up each and every $0.32, you get an astounding $55-million-dollar loss between quarters.

It seems the rocky road of social media importance is quick to change as can be seen with the latest losses of Facebook, the once mighty giant of the social media kingdom. Snapchat, which only brought in $150-million a year ago, is now reaping $231-million, and is seen as a risk for investors who bought into the company because of the $286-million it earned just last quarter. Unfortunately, company CDO, Drew Vollero has made it clear that this won’t be the end of Snapchat’s bad luck, the company expects even more loss in the coming quarter.

Loyal users of the snapchat app continue to send photos and captions using the application, enjoying the playful filters and editing tools built into the app. Will this be enough to keep the application afloat following such a loss? It’s hard to say, considering the fickle ways of the stock market. Only last year, stockholders saw the Snap stock increase by 25% following a boom in users and income. A good performance by the company could turn it all around, but they may not see an improvement if the changes continue to be met by negativity from the users. In fact, users were so disheartened by the redesign that a petition went out to force Snap’s hand toward removing the redesign all together.

 

What Needs to Change?

To discover what can be done to improve the next quarter, Snap investigated the loss of income and user dissatisfaction. What they learned was that it wasn’t so much the change that ruffled feathers of otherwise faithful users, it was the disruption felt by these changes. Snapchat users got used to doing things a certain way, and changes to the design means relearning some of the things they already knew how to do. It also meant that the app had bugs to be worked out, especially when it comes to Android, which wasn’t the apps main proprietor when it launched.

Evan Spiegel, Snapchat’s CEO, has commented on the problems with the current Snapchat model and made it clear that the company plans to make changes. He suggested that the app would be streamlined to better suit users’ needs and to help make Android phones a more reliable foundation for users to express themselves and share from. None of this touches on what the public wants, which is for the company to put things back to the way it used to run.

 

Stocks and Users

All this negativity revolving around the stock changes has users wondering if the company will finally give in and change the layout of their favorite app back to how it was before. At this point, a move of this kind could improve overall stock performance and user transactions, but there’s a chance that it could be too little too late.

The company has also been treading water when it comes to their hands-free camera product, Spectacle, which was designed with the Snapchat user in mind. The sunglasses use a built-in camera to give users the chance to share their world with other users without picking up their phones. Unfortunately, the launch of the Spectacles product flopped, losing the company something like $40-million dollars in the process, and leaving them with hundreds of thousands of unsold stock in warehouse boxes. Despite the failure, the company has decided to go ahead with a second product, the new Spectacles, which will be water resistant and sold at a much higher price point, possibly to make back some of the lost profits.

Is it going to be possible for Snapchat to bounce back? That will depend on how closely the company listens to its users and whether they make the changes users want to see. While growing with the competition is important to a social media platform, it doesn’t count for much if users are left unhappy. Looks like Snapchat learned that the hard way, but their future could always improve.


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