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(TikTok) Shop til you Drop?

May 2024 - News • Press

There’s no mistaking the fact that TikTok’s potential for product virality is essentially unmatched. Just one video can cause a sell-out, and that can be without any brand investment. So, naturally, clever executives at the platform are putting commerce at the heart of its offering with TikTok Shop.

It’s a natural fit, allowing brands to create entertaining, inspiring content and react to trends, making the brands on the platform relevant, no matter what the product or service it offers. 

Think SharkNinja, which can pretty much single handedly lay claim to inspiring die-hard ice cream enthusiasts through its social strategy for the CREAMi Ice Cream Maker. This was SharkNinja’s big social ‘moment’ that made them pivot to social-first campaign strategies. 

The announcement at the beginning of the year that TikTok is testing a feature that could make all posts shoppable alongside the fact that big brands are already experimenting (in February Coke launched a TikTok exclusive flavour), demonstrates that there is, to put it lightly, an interest in TikTok’s ecommerce marketplace. 

In fact, TikTok revealed that five million new customers purchased on TikTok Shop during last November’s Black Friday and Cyber Monday weekend in the US alone. Not bad for the month after launch. TikTok Shop breaks the geographical boundaries of traditional shopping allowing anyone to instantly shop from anywhere. Interestingly, according to research from GWI, despite Gen Z being known as the most active audience on TikTok, those leading the purchases are millennials.

Can all brands cash in? 

The TikTok Shop pitch is simple and enticing - don’t just buy ads for products, sell them on TikTok too. At SocialChain, we've got experience of helping clients expand their retail footprint and sell more effectively in social, and with TikTok being a key strategic partner we're excited about the opportunities in the space.

We’ve found that the high-speed retailers of the world, especially, will really thrive in this landscape. We're exploring opportunities with clients to make content and commerce come together in creative ways to create a seamless experience. The innovations in the shoppable social space are a great extension to that.

However, even for the made-for TikTok Shop brands, pressure points still exist, which makes sense. It’s a novel channel. First, brands are unsure of how to do it well and in a brand-fit way; second, they don’t know how to show its value to get the required investment. 

It’s the low acquisition for me

No matter the category, a good TikTok Shop strategy takes time and investment. Sadly, it’s not a case of jumping in and, hey presto! Overnight success. The TikTok customer is a different buyer breed. We pulled audience data from the GWI study, which pointed out that at present shoppers are treating TikTok Shop as an exploratory space and don’t necessarily intend to purchase. 

With impulse-driven purchases you have to be authentic, creative, and have a great offer. Take a step back. Brands should look at it from deciding which product is best suited to the platform first, then move to creative, and then move to sale. 

Naturally, showing value to the CMO is going to be a challenge when the feature is so new. In general, the numbers speak for themselves - brands are remembered 40 per cent  more on TikTok than on other platforms. But a brand is probably going to need a little more to get universal buy-in. 

Fortunately, there are some tangible truths beyond awareness. The seamless nature of TikTok Shop will offer brands access to more data than ever to see the attribution. The line of sight on how people engage with a brand and what they’re purchasing is crystal clear. With data being essentially as valuable as actual sales for long-term growth, this is a serious benefit. 

Added to this, the barrier to entry in TikTok Shop isn’t exactly massive while customer acquisition costs are notably low. Early adoption has an advantage in this sense. Getting involved now will mean much lower costs than other commerce platforms, and if it explodes in popularity, then really, that’s still great. 

Popularity is quite likely to come too. Again, the GWI research suggests that ‘the main reason consumers haven’t purchased from TikTok Shop is because they haven’t heard of it. If brands want more shoppers, they need to advertise TikTok Shop effectively. The potential is hard to ignore as TikTok's cultural significance continues to grow.’ 

Consider that the social commerce model in Southeast Asia (thanks to TikTok’s Chinese parent company, ByteDance) has led to more than quadrupling the norm spending to $4.4bn. That’s a pretty clear indication of what may be to come. And to be fair, what stirs a marketer to life more than the fear of being left behind? 

How to start in TikTok Shop? 

If you’re now camp TikTok Shop, consider applying our proposition in the application: 

  • Listen: Listen to your audience. Understand what their needs are and what they want to see. Listening also allows you to understand what products will be suitable for them. This should come before you even go so far as to think of the words ‘TikTok Shop’.

  • Connect: Adopt a creator mentality. The biggest challenge right now with TikTok Shop is making the aforementioned authentic content that fits the platform while selling a product. Realistically, it’s not a new hurdle, but it will only become more important if, for example, every ad becomes shoppable in TikTok and potential fatigue enters the mix. It must look native, and it must be localised for relevance.

  • Learn: The real beauty will be in experimenting and learning as TikTok Shop gains popularity. Reset and test different creatives and optimisations, or use the learnings from the Connect phase to inform future test and learn paths for impact. 

Tiktok Shop is further evidence that social is becoming a one-stop solution bridging discovery and commerce to create a one-stop for full-funnel marketing. There simply isn't another medium that has this solution. We’re starting to see the magic of what bringing all the pieces under one roof can do for all parties, and with the right strategy, other brands can experience it, too.

Originally published in Direct Commerce Gareth Harrison, Senior Strategist, SocialChain.

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