10 minute read
TL/DR: TikTok is a social commerce powerhouse eCommerce teams need to care about, regardless of the category they compete in. It’s capable of driving 83% month-over-month sales lifts on Amazon and enabling a cookie company in Utah to have more reach than Nike. Yet, it’s highly unpredictable and requires brands to move fast, relinquish messaging control, turn over more power to consumers, and create unique content. Best practice case studies can be found with Vita Coco’s speed, blk.’s willingness to let influencers work, and Mondelez’s entertaining content.
Leveraging TikTok to Drive Sales
Social Commerce, or the direct buying of items within social media apps, has underachieved its potential to-date.
This is likely to change over the next three years because:
- Privacy: The move towards greater privacy restrictions from Apple and Google disrupts social platforms’ abilities to measure and target consumers. Thus, investment behind social commerce is coming in a big way, not just as the next growth driver, but as a necessary requirement to maintain the business.
- Consumers: The line between media and commerce continues to blur. Amazon is becoming more important from a product discovery process, and social media is becoming as important as Google for finding more information about a product. Gen Z rates TikTok second only to recommendations from friends and family for product discovery. In other words, consumer behavior is increasing the odds of success for social commerce.
One of the biggest forces in social commerce is TikTok. It’s taken the world by storm, reaching 1 billion monthly users globally in 2021. While lagging Facebook, Instagram and YouTube, it outpaces Snap and Twitter combined.
Peace Out Skincare CMO Junior Pence described TikTok as “the new frontier” compared to Instagram becoming “your lazy uncle at a party”.
Naturally, the platform drives commerce.
The hashtag #TikTokMadeMeBuyIt has 6.1 billion views:
TikTok drove out of stocks on 12-foot skeletons at Home Depot for the SECOND YEAR IN A ROW.
And it is especially important to Amazon:
- 48% of Amazon Prime members use TikTok on a weekly basis
- There’s 10,000+ results for “tik tok items” on Amazon
- Amazon created an “Internet Famous” page that is driven by trending items on TikTok
- SimilarWeb estimates beauty brands like CeraVe, Aquaphor, and Paula’s Choice see an average 83% lift on Amazon after a viral video
- TikTok TV launched on Amazon Fire TV in November
TikTok is looking to capitalize on this by building more shopping capabilities.
- It has enabled Shopify’s 1 million merchants to manage TikTok campaigns from Shopify’s dashboard and measure conversions, in addition to creating shoppable video feeds within the platform.
- It has attracted significant attention from Walmart, which has hosted livestream shopping events and has generated 796,000+ followers to its 4Walls account (+100% growth since September).
- It launched a Creator Marketplace and API offering that helps brands identify the right influencers for their products without having to use intermediaries, removing a key pain point for brands.
- It offers a variety of ad units, including in feed, brand takeover, dynamic product, brand effect ads and more.
So, the opportunity is big. But the platform also brings with it new questions and challenges:
- Is it relevant to my brand and products?
- What needs to change in terms of mindsets and processes to make TikTok work for a consumer brand?
- Can consumer brands use content from other platforms on TikTok?
Is it relevant to my brand and/or product?
I spoke at a home improvement conference earlier this year and a question was asked about TikTok’s relevance to the category.
With a billion people using the platform, and 10.9 billion views of #HomeDecor, the answer is a definitive yes.
Take a category like fasteners. Seemingly a bit boring. But think of how fasteners enable incredible projects. Think about getting creative, showing a product from start to finish, highlighting the fastener as a star of the show.
Brands are making TikTok relevant for them. Crumbl Cookies is a great example in the food space of a small brand outpunching their weight. It now has 3.3 million followers (up from 1.1 million in June!), outpacing Nike’s 2 million reach on the platform. Crumbl had just one storefront just a few years ago.
If it’s relevant for cookies, it’s relevant for you. The only limitation is historical thinking about how your product can be represented.
What needs to change in terms of mindsets and processes to make TikTok work for a consumer brand?
TikTok is a unique social platform, requiring brands to operate differently and accept new risks, like moving fast, letting go of control and empowering consumers.
Moving Fast: Trends come and go VERY quickly on the platform and are highly unpredictable. This ephemeralness means brands must develop a process for identifying trends and then creating content aligned with the trend VERY quickly.
The best example of this is from Vita Coco, a brand that can publish relevant content within 36 hours of identifying the trend. For example, it used technology from Sightly to surface the trending term #NaturesCereal in March, putting out its own take within 36 hours. This fast response led to 2.4 million views compared to its median view of 800.
Interestingly, it posted another video on the same trend a month later, receiving 1,800 views. 2.4 million versus 1,800 - that’s the difference between responding in 36 hours vs. a month.
Giving Up Control: Influencers and brands are building a large following by creating unique content that is highly entertaining. The hugeness of the platform means there are so many niche audiences with influencers that understand what resonates. The challenge for brands is accepting less control when they work with these influencers.
The best example of this is blk., a beverage brand with 434k followers. The company has taken an influencer-driven approach to the platform.
Prior to focusing on TikTok, blk. worked with ~100 influencers a month on different promotions. However, it found success on TikTok by exploding that 10x.
It also loosened up its control over the messaging of those influencers, instead, giving them total freedom to do what they want with the product. It felt this was necessary for influencers to have the greatest impact with their audiences.
Empowering Consumers: TikTok, like other social platforms, enables brands to crowdsource. An example comes from GAP, which decided to relaunch its iconic hoodie after TikToker Barbara Kristoffersen generated millions of views featuring it.
While GAP could not move as quickly as Vita Coco in terms of launching a new colorway, it did tap into the zeitgeist on TikTok by crowdsourcing new colorways. Since it only has ~6,000 followers on the platform, it partnered with Kristoffersen on the launch.
Can consumer brands use content from other platforms on TikTok?
The short answer is no. While biased, TikTok has always said brands should “Make TikToks,” meaning create unique content that fits with the platform’s vibe.
Modern Retail suggests “The old videos were tidier, created by media teams with production budgets and curated towards traditional algorithmic concerns on Facebook and Instagram. Today’s TikToks are messier, DIY recipe iterations that further highlight how TikTok has diverged from older social media platforms.” Examples:
- Kate Spade is taking a platform-specific approach to its marketing, using highly polished content on Instagram, longer-form videos on YouTube, and entertaining, behind-the-scenes, influencer-driven content on TikTok. While the brand only has 0.1% the number of followers on TikTok compared to Instagram, its trending hashtags on TikTok have 950 million views, demonstrating the unique nature of TikTok’s algorithm compared to Instagram’s social graph.
- There are several food and beverage examples that focus on 1 minute or less videos that are simple and visually appealing:
- Swoon: Identified Whipped Lemonade as trending and reached out to TikTok influencers to help launch their products on TikTok via response videos.
- Dunkin’: Official partnership with TikTok’s largest creator, Charli D’Amelio. Dunkin’ has three million followers and 21.4 million likes.
- IHOP: releasing “Panflakes” in response to a mini pancake cereal trend took off
- Starbucks: Recipes for Dalgona coffee on its Coffee at Home website
- Mondelez: The CPG giant has 1.4 million followers each with Sour Patch Kids and Oreo, and creates off the wall content with its Nutter Butter brand.
The unpredictability of virality and the speed at which trends come and go makes capitalizing with sales after a viral video difficult to impossible.
No brands have really mastered this as far as we’ve seen. We expect social listening tools to become more advanced over time, helping speed up trend identification, and refine forecasting capabilities.
Brands may also commit more deeply to the platform developing large amounts of unique content as a means towards maximizing the odds of continued virality.
Questions to Consider:
- Is our strategy on social channels evolving to include directly selling?
- What is the probability TikTok drives notable sales for our business in ’22?
- How does our content creation on TikTok differ from that on Instagram and Facebook?
- What is our competition doing on TikTok?
- What social listening technology are we employing and how does it work on TikTok?