After months of testing, TikTok Shop is ready for action this holiday season, with plans to offer up to 50% discounts on Black Friday and Cyber Monday.
And according to a Shopify-Gallup survey, consumers may show up in droves, with half of Americans between the ages of 18 and 29 saying they will do at least some of their holiday shopping on TikTok and Instagram.
TikTok Shop officially launched in the U.S. in September, with over 200,000 registered sellers and 100,000 content creators participating in an affiliate program that allows users who have 5,000 followers to create videos go straight to the platform's “For You” feed.
With this emerging e-commerce offering, the ByteDance-owned company is looking to replicate Douyin’s success in the West -- taking on major retailers like Amazon and Walmart over the next two months, with hopes to move $20 billion worth of products this year worldwide.
To get a better sense of how TikTok Shop works, and how brands can experiment with and plan their campaign strategies on the social platform, MediaPost spoke with Ryan Detert, CEO of influencer marketing company Influential.
Heading one of the first agencies to partner and integrate with TikTok’s Creator Marketplace API, Detert provides insight into the inner workings of TikTok Shop, how the feature may evolve in coming months, which content formats are most effective in selling products, campaign approaches and more.
MediaPost: What is the performance-measurement process like on TikTok Shop right now?
RD: It’s not much different than Shopify if you’re doing an affiliate or direct-to-consumer (D2C)-type model with them. All the same tools to identify talent and put custom audiences towards your shop exist.
On the back end, we start seeing conversions -- you get information on people to be able to ship to them and deliver that piece accordingly. You can retarget them and hit them with more opportunities.
MP: What is the most popular content format on TikTok Shop?
RD: While it’s very sexy to talk about live shopping, the vast majority of sales are originating on shoppable video. You can fire off 50-plus people, their affiliates or regular creators and get results, and then you know how to optimize.
This is the difference between Douyin in China and the West, which isn’t used to live shopping yet. But it's starting to move in that direction.
MP: How will live shopping continue to evolve on TikTok?
RD: When you’re on TikTok you might see that every third or fourth post is driving you to a livestream, whether it’s gaming or people talking about their passions -- it’s usually lifestyle-based content, and it’s almost never shoppable.
But that consistency is picking up. It’s only a matter of time before these creators and streamers begin selling things in their TikTok shop.
MP: Will TikTok Shop be able to compete with Amazon and Walmart this holiday season?
RD: I always say that Amazon is a BYOA company -- a big Bring Your Own Audience platform. TikTok has an audience but they don't have Amazon’s one-click buying setup. So the numbers won't compare just because the numbers are so big for Amazon. But in terms of growth trajectory, yes.
It’s instantly going to grow faster than every other platform because it has this built in audience. Douyin and ByteDance make $200 billion-plus in a different market using this exact model.
TikTok Shop will show a fraction of where it's going to be in the coming years. The fourth quarter will be a testing ground for the scale.
MP: What should brands know when experimenting on TikTok Shop?
RD: Our number-one suggestion involves creating engaging content that is specific to your vertical. And it’s not about generating one viral video -- it’s a volume play. The brand itself must post on their own handle and employ larger creators or a bunch of affiliate creators to push out content.
The aim should be to have two or three videos that reach the Zeitgeist, gather 1,000 views, and drive tens and tens of sales, as opposed to one big celebrity post and $10,000 in sales.
MP: Does the emergence of TikTok Shop mark a cultural shift away from official brand websites?
RD: You'll always have website real estate. Look at Amazon -- that's where the majority of sales are going to happen. I also think Shopify would say that websites will be around for a while -- it's kind of their entire business model. It's all interconnected.
MP: What do you make of TikTok’s fulfillment centers?
RD: It is the least sexy part of all of this, but it's obviously the backbone of TikTok Shop. I think it's gotten pretty consistent because of the integrations they've made with big commerce and Shopify.
MP: How effective do you see the 50% discounts TikTok Shop is promising consumers over the holidays?
RD: All that stuff helps, it gets your feet wet. But it’s all going to come down to performance. It reminds me of Bed Bath & Beyond’s automatic 20% off deals to just get you in the store -- once consumers are inside, it’s up to the delivery of that campaign to keep them coming back.
MP: What might be holding TikTok Shop back in this early stage?
RD: Just nascency and adoption. They do want to make this truly scaled. They want the 100 to 500 small DTC brands with dedicated content and ecommerce enthusiasts because sales across 500 brands is more than one massive brand.
MP: Is there anything else you think brands should know in preparation for the holidays?
RD: Get into TikTok Shop early and start testing now. It’s going to take weeks and weeks of testing and learning to get results worth replicating. Brands probably won’t get a direct return on their investment until they spend time identifying what trends have performed.
It’s going to require human setup and creators. The initial few campaigns might not lead to ROI.