Averaging 1B active users each month, TikTok continues to take the social media landscape by storm—even as the government fight to ban the app has reached a new level. TikTok is the single largest source of new social buyers in the U.S, with aims to grow its ecommerce tenfold this year, to around $17.5B, through TikTok Shop (TTS), which was launched last September.
IS TIKTOK SHOP THE NEXT BIG THING?
Lots of signs point to yes! TikTok Shop is an in-app shopping experience that allows TikTok’s huge audience to see a product, learn more about it, and purchase it without ever having to leave the app. TTS’s user-friendly setup cuts the customer journey down to five milestones: product introduction -> product link -> product details -> selection -> checkout.
Because TTS can be leveraged both organically or with paid media spend, it can integrate into a full-funnel strategy in multiple ways.
WHAT DIFFERENTIATES TIKTOK SHOP?
A few key differentiators make us especially excited about the future of TTS for our clients: TikTok is the leading platform for impulse purchases. 55% of users have made an impulse purchase on TikTok and 72.1% have made a purchase after seeing a product on their For You Page.
TikTok Shop operates differently than any other social media in-app shopping feature. Along with the multiple advertising options, TTS offers secure checkouts that are more comparable to Amazon than Meta platforms. Important caveats for brands are that TikTok requires that orders are shipped within three business days and brands must undergo a probationary period before becoming eligible to use promotional tools.
HOW DOES TTS WORK?
There is no ‘Shop Tab’ on Instagram, but TikTok places its digital marketplace right next to users’ For You Page. Instead of going to Amazon to find things they saw on TikTok, users can simply swipe right to reveal an array of products trending across the platform.
TTS also highlights free shipping, new customer deals, and coupon offerings as users scroll through the Shop page. TikTok shoppers are also able to see the number of units an item has sold, a brand’s rating (out of five stars) and customer reviews. These Amazon-like features reenforce product quality and popularity, which in return encourages more purchases.
TTS LIVE IN THE MARKET: HOW’S IT GOING?
Currently, TikTok Shop’s biggest selling category is Health and Beauty. Stella clients, including Dr. Dennis Gross, have seen strong success and engagement with TTS—but the general report is not all rosy.
According to Jeremy Lowenstein, CMO of makeup brand Milani, "[The TTS influencer] is a very different type of influencer. The influencers that we all know and love and have cultivated relationships with don’t necessarily want to be promoting TikTok Shop because they see it as a conflict of interest: They’re getting a commission, yet they know their community [follows] them for their authentic voice—even though everyone does sponsored brand content.”
That summarizes a new conflict for the platform: TikTok, initially famed for its entertainment factor, has now focused on selling. Brands must navigate the fine line between crafting content that fits the platform's vibe and pursuing their ecommerce goals on it. Marni Levine, GM TikTok Commerce, is “not considering” dialing back the amount of ecommerce content on the For You Page, even as some users lament that they are experiencing too much selling on the app.
We’d add that there is a history of users growing accustomed to advertising enhancements on platforms—users disliked sponsored ads taking over Instagram at first—but then a new normal settled in. TTS features, paired with education and entertaining content and an easy shopping UX makes the platform compelling enough to withstand any initial resistance.
A final, more practical complication to consider: TikTok Shop has subsidized shipping costs and sales discounts, but brands need to be aware of fees: 6% of each sale beginning this month and 8% in July for most product categories.
THE NEXT STEP IN YOUR TIKTOK SHOP STRATEGY
We’re excited to bring you this as part of a blog series on TikTok Shop. Connect with us to stay tuned: in part two we will uncover advertising and creative best practices when getting started on TikTok Shop.
Sources: Glossy: “Gen Z Wants to ‘Turn Off’ TikTok Shop, as Beauty Brands Test the Waters,” 5 March 2024, “Can TikTok Shop Succeed?” 2 April 2024, The Information, “TikTok Shop Chief: No Plans to Dial Back Shop Content,” 2 April 2024, Sprout Social, "27 TikTok Statistics Marketers Need to Know in 2024," 10 February 2024
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