In the digital age, creative, short-form video is taking over the social media marketing landscape. As we approach the holiday season, TikTok is positioning itself to compete with eCommerce platforms like Amazon and Shopify with the launch of TikTok Shop in the US, giving “brands, merchants, and creators the tools to sell directly through shoppable content on the TikTok app.” In our TikTok Shop eBook, we outline key considerations for retailers looking to leverage this platform to reach customers — both for the holiday season and after – and implications for how it will influence their eCommerce marketing strategies.
What is TikTok Shop?
TikTok Shop is poised to revolutionize the way businesses approach eCommerce marketing strategies across diverse industries, ushering in a new era of unprecedented opportunities and challenges for brands looking to reach their target audiences. TikTok’s new shopping capabilities are available in several features: through TikTok’s in-feed video and live streaming that allows creators to earn commissions from products; via custom product collection from profile pages; and within a “Shop” tab where businesses can display their products through a dedicated marketplace. Among TikTok’s new capabilities is the ability to upload video responses to products on a virtual store rather than text-written reviews.
The social media app plans to generate up to $20 billion in merchandise sales through TikTok Shop this year, and consumer spending on TikTok has already surpassed $2.5 billion globally. There’s no doubt that an app used to aimlessly scroll and discover new trends now being flooded with shoppable ads will impact retailers’ eCommerce marketing strategy as a whole, especially in the upcoming holiday season.
In fact, Shopify found that nearly half of Gen Z consumers plan to buy at least some gifts through social media, a greater share than the third of all U.S. consumers that plan to do so this upcoming holiday season. Shopify has integrated with TikTok Shop, allowing for more sales on both platforms. New customers on TikTok Shop receive coupons on their first purchase, which TikTok reimburses to the seller once the product is delivered. This potentially poses challenges for smaller businesses looking to sell on this platform, as they need to manage upfront costs. This is especially timely as TikTok looks to capitalize on the holiday season by offering steep discounts to lure customers.
Key Considerations for Retailers Leveraging TikTok Shop
Download our free eBook to explore the below considerations:
- TikTok should be seen as a technology platform, including for security and data privacy, integration, and management.
- Influencer marketing strategies will shift, as will budgets.
- Be mindful of the increased buying power among Generation Alpha.
- Representation matters on the platform, so marketing teams will need to have a strategy in place to include diverse creators.
Looking to the Future
As TikTok evolves into a multifaceted platform integrating social media and eCommerce, businesses must adapt their strategies to harness its full potential. The launch of TikTok Shop signifies a paradigm shift – not just in how products are marketed, but also in how transactions occur, blurring the lines between social interaction and shopping. In this dynamic new ecosystem, where viral fame and brand reputation can change overnight, areas such as IT, marketing, and eCommerce must work cross-functionally and intentionally to craft inclusive, interactive, and genuine experiences that capture the attention and trust of the digital consumer.
In the coming months, we will see a surge of companies looking to build revenue through TikTok Shop and partnerships with influencers. The potential for diverse industries to flourish on TikTok Shop extends beyond the thriving health and beauty sectors, paving the way for trends like luxury resale and livestream eCommerce to potentially emerge in coming months. Those who successfully align with consumer interests stand to gain significant advantages, while brands that fail to resonate with their audience risk not only financial setbacks but also damage to their overall reputation.
Whether your company opts to focus on TikTok Shop or not, maintaining consistency in your brand representation across eCommerce and social commerce platforms is crucial for preserving your image. TikTok Shop is not merely a marketplace; it’s a cultural phenomenon shaping the future of eCommerce—one where creativity, diversity, and authenticity will be the keys to success, foreshadowing a new era where consumer engagement and brand credibility stand as the cornerstones of lasting market influence.
Subscribe to Clarkston's Insights
Contributions from Julia Hoffman and Brooke Comune