Commentary

Retail Marketers: Biggest TikTok Risk Is To Ignore Shop's Potential

The distinct possibility remains that TikTok will be banned in the U.S. in a matter of days, and marketers are responding by reallocating TikTok spend on platforms like Instagram and Pinterest. 

Is this a mistake or smart diversification? I’ll make the argument that taking your foot off the gas with TikTok ads -- particularly Shop ads -- right now is a risky move that might put your brand behind the competitive curve if TikTok gets more permanent staying power in the U.S.

Why?

First of all, TikTok is an affiliate beast; its affiliate ecosystem provides brands with an opportunity to grow awareness while driving a wealth of conversions with Gen Z-ers and millennials. According to recent data from CapitalOne Shopping, TikTok affiliate links have an average 5.2% engagement rate, a 160% higher rate than on Instagram.

For retail purposes, TikTok Shop is the pinnacle of intent, purchase-friendly UX, and social proof driven by its creator showcasing. Add in the ability to capitalize on FOMO for trending viral moments, and Shop is already creating tons of incremental revenue growth.

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Second, TikTok is giving affiliate advertisers every reason to jump in by lowering the potential risk of partnering with creators. At the heart of its affiliate program sits the cost-effective revenue share model, where brands on the platform only pay commission to creators for purchases they’re driving. Furthermore, Shop has introduced additional features to lower the risk of partnerships, such as its refundable samples tool where creators purchase their own sample for video creation but have the opportunity to be refunded if they meet the brand’s predisclosed promotional criteria (e.g., produce one video, generate one sale, etc.). 

Third, TikTok’s search algorithm is a blend of intent and discovery that truly shortens the purchase journey, particularly when users interact within the commerce-friendly Shop environment. We’ve seen over and over that one TikTok session can bring a user from being aware of a need or desire to being aware of a brand or product that can address that need or desire -- and then close the purchase, thanks to creators providing testimonials that the brand or product is a great option. It’s a distinctly powerful setup that streamlines the funnel in a way that Instagram (with very limited search functionality) and Google (which is relatively weak at generating demand) do not.

Yes, the next couple of weeks will be consequential for marketers. At my agency, we think the risk of ove-allocating resources to a platform that may have a short shelf life is worth it. We plan to continue full steam ahead on TikTok Shop, leveraging the platform to grow brand and product awareness while also generating impactful revenue.

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