87% of social media marketers currently believe that consumers will search for brands on socials more often than on search engines (Hubspot, 2023). With an estimated 4.95 billion social media users around the world (61.4% of the global population!) - that means big things for eCommerce brands.
Social media recently overtook paid search as an advertising channel, growing 25% YoY and exceeding $137 billion in ad revenue (just overtaking search’s $135 billion). For consumers aged 18-54, a confirmed 24% already go to social media first to search for brands. This shoots up to 36% among Gen Z.
Between 2020-2022, TikTok was the fastest-growing platform - with a staggering 100% growth in users. It now boasts over a billion users worldwide - used as a search engine, a source of inspo and discovery, and a powerful product recommender. In the past year, TikTok surpassed Google as the primary source of information for Gen Z (Hubspot). So it’s no surprise that TikTok is now following Meta’s example- integrating online shopping into their app for businesses to sell directly to users.
TikTok Shop
The latest feature that has pricked the ears of the global business community is the recent announcement of its “TikTok Shop” feature.
The TikTok shop introduces a shop tab to the home screen, which takes users to a marketplace. This lets sellers & buyers complete transactions within the TikTok app - eliminating the extra step to convert TikTok fans into customers, by offering shopping options directly on the platform.
Let’s look at the different content formats available in TikTok Shop...
Product Showcase
Here, users can tap the shopping tab (or bag icon) to access a mini storefront. Users can browse product tiles, read reviews, and purchase directly from a brand's profile in just a few taps. Businesses can curate custom product collections directly on their profile page. (Note: Some accounts may have a product showcase without a TikTok Shop. These are usually affiliate accounts that do not own the brand or products being sold.)
In-Feed Video and LIVE Shopping
Shoppable videos on TikTok are content with product links that allow users to buy products without leaving the content. Users can shop directly from a shoppable in-feed video by tapping the product link & basket icon.
Users can also shop directly from a LIVE video - by tapping the pinned products or browsing the shopping basket icon. Live shopping is a great way to demo products and answer questions in real time. Products can be added to the user’s cart during the livestream and they can check out instantly or at the end of the broadcast.
Other additions to support the use of TikTok Shop include:
Shop Tab: Businesses display their products on a new product marketplace and customers can easily search and discover promotions and products. Product recommendations are showcased via product listings and shoppable content, and customers can manage orders, all within a single tab.
Affiliate Program: Creators can connect with sellers through new commission-based product marketing opportunities. Creators have a new way to monetize their creativity by sharing products in short videos and livestreams, and sellers can choose the Affiliate plan that's the right fit for their brand.
Shop Ads: New TikTok Shop Ads bring more opportunities for sellers to promote their TikTok Shops, so customers can discover and complete purchases all within TikTok.
Fulfilled by TikTok: A new logistics solution lets merchants focus on their products while TikTok Shop stores, picks, packs, and then ships sellers' products to customers.
Secure Checkout: TikTok works with trusted third party payment platforms to facilitate transactions on TikTok Shop, to ensure a quick, smooth, and secure checkout process. All TikTok protected US user data is stored in the US and managed by USDS.
Who can leverage TikTok Shop?
TikTok Shop promotors are broken down into four categories of commerce users:
Sellers
Creators
Partners
Affiliates
Each of these groups has different requirements.
Today, we're excited to announce a new way for people to now find and shop for their favorite products with the full launch of TikTok Shop in the US. -Tiktok, Sep 12, 2023
Globally - about 40% of TikTok users have access to the Shop tab. TikTok Shop is available in the UK, Malaysia, the Philippines, Singapore, Thailand and Vietnam. In the United States, where the company says it has 150 million users, the shopping feature began rolling out in August with the aim of being available to all by early October. TikTok aims to quadruple its eCommerce sales up to $20 billion this year, Bloomberg reported in June, though the platform is reportedly foregoing charging commissions from some vendors temporarily to encourage users to sell. A recent crackdown in Indonesia (home to six million sellers on TikTok) could increase the pressure on TikTok Shop in the other countries where it operates as Indonesia is one of its biggest markets currently.
What about Australia?
8.5 million Aussies use TikTok, and more than 350,000 Australian businesses are on the platform, with big players including the likes of Guzman y Gomez.
So far, Australia has not received the shop feature. But for Aussie and Kiwi brands who happen to be on Shopify, BigCommerce or Ecwid (by Lightspeed), you can still take advantage of TikTok shopping. Merchants can now link their account to TikTok For Business to access TikTok shop features, such as syncing your product catalogue, building creative videos using products, and creating TikTok ad campaigns. Through this integration, brands can tag products in their content.
So, what does TikTok shop mean for brands?
TikTok Shop and other shopping integrations allow brands to naturally introduce products into entertaining videos and other content. Let’s zoom in on some of the top benefits...
An opportunity to build brand awareness
TikTok has already been established as a key platform for brands and products to advertise and go viral. TikTok boasts over 50 million daily active users, with 18.68% of all Americans with mobile internet logging in daily. Its huge reach offers brands a chance to capture the attention of potential customers.
Brands savvy in their approach can create a personalised shopping experience based on TikTok user behaviour and benefit from virality with TikTok trends and hashtag challenges. The hashtag #tiktokmademebuyit (in which users show off products they’ve purchased that they learned about on TikTok) has nearly 70 billion views - featuring a vast range of products from skincare products to picnic baskets. Major brands have racked up millions of followers on their TikTok profiles, and some have benefitted from surprise viral campaigns, like the videos that made the McDonald’s Grimace Shake a massive hit. Products that go viral on TikTok often experience sales spikes on Amazon, making it a compelling platform for conversions. TikTok has also developed a solid creator economy, with many brands tapping into influencer marketing to sell goods. Brands who have done their homework on the TikTok cultural landscape can assemble a team of affiliate content creators to drive organic traffic.
This reach provides a captive audience for brands looking to engage in social commerce and a platform to drive product discovery (if done right!).
Conversion at Lower Customer Acquisition Costs
Profitero’s Digitally-Influenced Shopper research reveals that 1 of 3 U.S. shoppers will make a purchase after seeing a product on social media. And with the cost-per-click on Amazon rising, TikTok Shop offers an appealing alternative for brands in terms of costs.
The Affiliate Marketplace within TikTok Shop allows brands to advertise products based on referral sales, only paying when a sale is made. For brands who harness the power of affiliate content creators – resulting growth in organic traffic can also reduce costs.
Seamless Connections with Creators and Influencers
Whilst marketplaces like Amazon and retailers like Walmart are bringing together influencers and creators into the shopping experience, platforms like TikTok are built to serve the creator and user first, allowing brands to partner with trusted creators and use influencer marketing to increase authenticity, reach but now also close the loop on sales. It seamlessly pairs content creators with brands and products, offering an engaging, interactive shopping experience that other platforms fail to rival.
The mindset for TikTok Commerce
“Think like a marketer but act like a creator”.
Whilst TikTok shops offers a significant opportunity to drive incremental sales - brands that derive the biggest benefits will be those who understand that to successfully leverage TikTok shops, you need to think fundamentally differently to other eCommerce channels. Creatively positioning your products in entertaining content is paramount when using TikTok. Anthony Dever - TikTok's Head of Brand & Creative Consultancy describes the sweet spot of TikTok creativity as “entertainment that drives impact”. The idea is to think like a creator, not a brand. Or as Ankita Shetty (TikTok Creative Strategist) put it at TikTok’s recent ForYou Australian summit: “Think like a marketer but act like a creator”.
Social platforms all have their own trends and content formats that work best for each audience. It’s a mistake to blindly copy your strategy from other platforms over to TikTok without understanding the content that performs best. On TikTok, authentic storytelling is what users want to see. Aim for creative content that uses trending TikTok sounds, shares a peek under the hood, jumps on current pop culture conversations, or offers real value to fans through education. Content like this that can incorporate products organically will always perform better than a direct sales pitch. If you’re stuck, start by checking out TikTok’s creative codes:
For busy brands who don’t have the time or budget right now to be creating native TikTok ads and need to pull from existing content that was developed with another platform in mind - recutting and remixing ads is a good compromise. Verticalising the format, adding in early hooks, pushing an emotional presence (ie- adding a human voiceover with a call to view), animation features, text and emoji overlays can help brands tap into trends without having to start from scratch.
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