TikTok, primarily known as a video-centered immersive social media platform, has taken a significant leap in the e-commerce world by introducing TikTok Shop in the USA. Over 150 million people across the United States use TikTok, seeking entertainment and inspiration. Many of them use the platform to discover new trends and products. A community-driven trend, #TikTokMadeMeBuyIt inspires people to share product reviews and references. The hashtag has reached a whopping 82.4 billion views. These trends resulted in a whole new, unmatched shopping culture.
In 2021, a simple baked feta pasta recipe went viral on TikTok. What was all the fuss about? The original video involved baking a cube of feta cheese with cherry tomatoes, olive oil, garlic, and salt, then simply adding cooked pasta for an easy, hearty meal. The viral recipe resulted in Feta shortages in some areas of the US. The hashtag #BakedFeta currently has 171.4M views, and #BakedFetaPasta exceeded 240.3M views.
What truly sets TikTok apart from other social media giants, such as Facebook and Instagram, it's algorithm. While other platforms primarily focus on showing you content from your contact network, the TikTok app opens on a ‘For You’ page. Videos from your friends are visible in a separate tab. The ‘For You’ page comprises content carefully selected by TikTok’s algorithm, which is based on your interests and the types of videos you had previously enjoyed.
Why does it matter? This model facilitates and encourages product discovery. TikTok video ads seamlessly blend in with other clips on your ‘For You’ page. In contrast to older generations, Gen Z and Millennial users are wary of social media marketing and do not respond well to traditional, scripted ads. That is why User-Generated Content (UGC) performs so well on TikTok. To sum up, if you are looking to sell in 2024, TikTok is a place to be.
TikTok Shop offers an all-in-one e-commerce solution within the TikTok app. It enables merchants to showcase and sell products through in-feed videos, live streams, and a dedicated Showcase tab. The entire shopping experience, from product discovery to check out, occurs within the app, making it a streamlined process for its users. So, what exactly is Social Commerce? What are the key features offered by TikTok Shop? Here is all every ecommerce owner should know about Byte Dance's latest venture!
The Impact of Social Commerce
What is social commerce, and how is it different from e-commerce? The term social commerce refers to the integration of e-commerce activities within social media platforms. E-commerce, broadly defined, encompasses the online buying and selling of goods and services, including the necessary data handling and monetary transactions, as explained by Shopify.
The world of e-commerce has experienced considerable growth and transformation since the first-ever online sale on August 11, 1994. Today, e-commerce is a diverse field encompassing various selling models and business types, with global sales projected to hit $8 trillion by 2026. Typically, online stores operate through brand-owned channels or third-party platforms like Shopify. The trend towards a holistic, omnichannel approach is gaining traction, recognizing that consumers themselves engage across multiple channels, necessitating a comprehensive marketing strategy that covers all possible customer touchpoints.
Social media platforms have emerged as prominent e-commerce channels. Platforms such as Facebook, Instagram and TikTok now offer native buying and selling features, allowing users to complete purchases within the app itself. This function is particularly beneficial to small business owners who may not have a standalone website.
Note: It is important to differentiate social commerce from social selling! Social selling involves building and nurturing relationships with potential customers, often in a B2B context, focusing on individual interactions and relationship-building as a part of the sales process (via LinkedIn direct messages, for example).
Shopify’s projections indicate that social commerce will continue to expand, with social media playing a crucial role in product discovery, partially eclipsing traditional search engines. Mobile commerce is expected to constitute 43% of online sales in 2023. Additionally, eMarketer projects social commerce revenues in the United States to reach $80 billion by 2025 and $2.9 trillion globally by 2023. Currently, 4.59 billion people, 57% of the worldwide population, use social media. These statistics should be more than enough to get you on board!
Beyond sales, social media platforms are instrumental in establishing a brand’s online identity and fostering a community around it. Your social media accounts are your business card and a digital storefront, capturing attention and igniting interest in your products. Captivating photography, unique and memorable key visuals, engaging storytelling, and a sense of community contribute to the perception of your brand. Research indicates that over half of shoppers globally have discovered products through social media. By optimizing your social media presence and utilizing in-app stores, you can reach customers at every stage of their journey, build a solid brand identity, and offer a seamless shopping experience.
The checkout process is a critical aspect of online shopping. Issues like a slow-loading website, especially on mobile devices, complex checkout procedures, or hidden costs are leading causes of cart abandonment. Even minor frictions can lead to customer frustration or lost sales. Native social commerce features, therefore, offer an ideal solution to these common e-commerce challenges.
The choice of TikTok depending on your target demography
How do you choose a social media platform suitable for your business? It all depends on the demographics of your target group. Since TikTok is the focus of this article, here are a few facts about the platform:
TikTok has a potential ad reach of 945.2 million,
TikTok has approximately 834 million global monthly users,
TikTok is predicted to see the highest user growth worldwide of all social platforms starting in 2024, at 7.0%,
TikTok was expected to have 33.3 million US social commerce buyers in 2023,
According to Hootsuite report, 67% of Americans aged 18 to 19 use TikTok, as do 56% of those aged 20 to 29. Among Americans aged 60 to 64, 16% use the platform,
TikTok is most effective if your target audience includes Millennials and GenZ,
By 2025, TikTok is expected to surpass Instagram with 48.8 million US users, compared to Instagram’s 48.2 million public;
According to TikTok's official Twitter account, 39% of its users say they have discovered a brand or product via the platform, and 47% would purchase based on TikTok recommendations.
TikTok is particularly efficient among high-spenders
Understanding TikTok Shop
Key Features
Here are the main features offered by the ByteDance platform:
Videos and Live Shopping
TikTok Shop enables merchants to sell products directly within in-feed videos and live streams for effortless product discovery. Users can simply click on the product tag to access the product page in TikTok’s catalog or visit the seller’s website.
Product Catalog
Store and organize information about products you want to advertise with the product catalog asset. This feature is invaluable for merchants looking to create and manage ads for various products with different characteristics. TikTok product catalogs allow you to input and organize crucial details like names, descriptions, prices, images, videos, and product tags. You can also create product sets and customized automated rules. This data is then used to generate custom Video Shopping Ads with up-to-date product information using Video Templates and Dynamic Video Generator.
Product Showcase
Users can browse product tiles, access detailed item information, and peruse reviews on the brand’s profile. Sellers can create collections or import them seamlessly from their preferred e-commerce platform.
Shop Tab
When a business sets up its TikTok Shop, a special shopping tab is added to its profile, recognizable by a small shopping bag icon. Users can effortlessly browse products, add them to their cart, and complete the checkout process within the app or choose to finalize their purchase on the store’s website through e-commerce platform integrations. Fun fact: Kylie Cosmetics was one of the first stores that allowed its customers to shop directly on TikTok. Smart move, considering that the seller’s profile had over 3.5 million followers at the time!
Affiliation Program
TikTok introduces a new Affiliate Program, providing creators with a new way to collaborate with sellers. TikTokers can now showcase products in their short videos or live streams and earn commissions in return.
Logistic solutions
TikTok introduces an innovative logistic solution called Fulfilled by TikTok. This feature allows sellers to concentrate on their products and marketing efforts while TikTok manages the storage, packing, and shipping.
Possible integrations
TikTok Shop offers numerous integrations:
With e-commerce platforms:
With multichannel partners:
With other e-commerce services:
TikTok's E-commerce Ads
Following the launch of TikTok Shop, a range of new e-commerce ads have been introduced, enabling the brands to boost sales directly on the platform. This streamlines the conversion process, allowing users to effortlessly discover, browse, and make purchases within the app. From all the ads types offered by the platform, here are the most suitable ones for online retailers:
Collection Ads
Source: TikTok
TikTok Collection Ads allow users to find and discover products through a full-screen, immersive mobile experience. Clicking on Collection Ads takes users to an Instant Gallery Page. Merchants can create collections and set automated rules to customize them to different target groups. As you can see, this type of ad provides a seamless and personalized discovery-to-purchase customer experience.According to TikTok’s survey, Collections Ads have an engagement rate that is 1.8 times higher than that of ads on other social media platforms.
Dynamic showcase ads
Source: TikTok
TikTok Dynamic Showcase Ads (DSAs) are personalized video advertisements. Dynamic Ads are created in real-time with up-to-date product information pulled from a product catalog in TikTok shop or synchronized e-commerce platform. This type of ad will be particularly useful for retargeting.
Deeplink Ads
Source: TikTok
Deeplink TikTok Ads use embedded links to direct users to in-app locations, such as the product page of your e-commerce store. By seamlessly redirecting users, these ads significantly reduce bounce rates and drive traffic to your website.
TikTok Shopping Ads
Source: TikTok
TikTok Shopping Ads encompass three of the latest advertising solutions for promoting products. These ads offer different product display options that you can now adapt to suit your business.
Video Shopping Ads — a way to make your in-feed video ads shoppable!
Catalog Ads allow you to display one or more products from your collections based on your chosen criteria.
LIVE Shopping Ads enable users to browse your products while watching your Live videos.
TikTok Lead Generation Ads
Source: TikTok for Business
TikTok Lead Generation Ads are ideal for building customer relationships and collecting valuable lead information. You can use an Instant Form to gather information within TikTok or redirect users to your website.
Final Thoughts
In conclusion, launching TikTok Shop in the USA is a major leap for social commerce. With its vast user base and powerful algorithm-driven content delivery, TikTok has rapidly become a prime platform for businesses to connect with their target audiences and drive sales. The native in-app shopping functionalities and the new Shopping Ads are set to revolutionize the seamless shopping experience. Moreover, the platform’s dedication to enhancing user engagement through initiatives like the Affiliate Program underscores its commitment to both sellers and shoppers alike.
As businesses look to the future of online retailing, TikTok emerges as a compelling solution for those seeking to expand their reach, build brand recognition, and provide customers with a convenient, frictionless shopping journey. With the platform’s ever-growing user base and innovative advertising solutions, TikTok is poised to play an increasingly pivotal role in the world of e-commerce. So, if you are ready to tap into the dynamic world of social commerce and reach Gen Z and Millennial consumers, TikTok Shop is the place to be. Do not miss out on the opportunity to boost your sales, raise brand awareness, and elevate your business to new heights. For any questions regarding social commerce and marketing solutions suitable for your brand, do not hesitate to reach out to our team. We will be happy to share our experience and insights to help you elevate your marketing strategy!
