TikTok Shopping and Social Commerce: Why DTC Sellers Should Take Note
A new chapter has been written in social commerce.
Social commerce is essentially the selling of products directly on social media platforms. This shift in sales channels has brought with it an overhaul of the way brands and products are promoted and the instrumental role content creators play in this new age of sales and marketing.
Shopify anticipates the rapidly growing creator industry will enter an era where creators become entrepreneurs and redefine the role that social content plays in the way merchants and consumers interact.
E-commerce marketing is now becoming more personal, with brands speaking directly to the individuals in their audience. It’s the personal connection that consumers desire to feel with brands and content creators that is at the core of social commerce and modern consumerism as a whole.
As a testament to this, on our marketplace, we’ve seen an increase in content site acquisitions by e-commerce brand owners as a strategy to bolster their physical product sales. If you have a site and you’re curious about what it could be worth now, we recommend checking out our free valuation tool.
Social commerce is reshaping everything and will have a ripple effect on online businesses. Here’s what you need to know about how TikTok and social commerce will affect your brand, and how you can use this knowledge to stay relevant or even leapfrog ahead of your competition.
Last year, on October 27, 2020, TikTok announced its partnership with Shopify. The TikTok app in Shopify allows sellers to create video ads, track results with the TikTok Pixel, and manage orders from ads.
In the latest development of this partnership, on August 24, 2021, TikTok rolled out TikTok Shopping to a select group of Shopify sellers in the US, UK, and Canada. This new shopping feature allows sellers to integrate their Shopify online store into their brands’ TikTok account, allowing consumers on TikTok to shop while interacting with their favorite brands.
As expected in a viral social media environment, there has been a rising trend of TikTok users tagging posts with the hashtag #TikTokMadeMeBuyIt when sharing products they found in TikTok videos, resulting in billions of views and the growth of social commerce consumerist culture.
Signaling a firm commitment further down this new path, this was only one domino within a line of several social-focused partnerships. Just five months prior to the October partnership, on May 19, 2020, Shopify partnered with Facebook to offer social commerce on Facebook and Instagram—another clear sign that social commerce is growing fast and here to stay.
Since then, social commerce sales have climbed 37.9% year over year to $26.77 billion, with growth projected to reach $36.09 billion in 2021, according to Business Insider.
What Shopify Says About the Partnership
In application, Shopify envisions leveraging TikTok social posts to create mini online storefront extensions of Shopify stores by enabling Shopify sellers with TikTok For Business accounts to add a shopping tab directly to their TikTok profiles, serving as a point of purchase where customers can select products from TikTok and be directed straight to checkout on Shopify.
“By enabling new in-app shopping experiences and product discovery on TikTok for the first time, Shopify is powering the creator economy on one of the fastest-growing social and entertainment platforms in the world. We are excited to help this next generation of entrepreneurs connect with their audiences in more ways—and with TikTok as a visionary partner.”
—Harley Finkelstein, President of Shopify.
With the rise of e-commerce, the relationship shifted from consumers reaching out to merchants when brick and mortar was the only option. With the rise of social commerce, the dynamic is shifting again from consumers being introduced to a product page or online store solely based on a Google search social media ad.
In order to break through the increasingly noisy online landscape, merchants are now reaching consumers where they casually spend their time online, not as interruptive ads or obtrusive product links but by immersing themselves as part of the entertainment experience.
What TikTok Says About the Partnership
TikTok mirrors Shopify’s sentiments on the future of social commerce and of the evolution of the content creation industry. Naturally, its focus is more on the content creation side of this market maturation and how content creation pushes the growth of social commerce.
From TikTok’s perspective, this is an opportunity for Shopify merchants to create engaging organic content and transform the shopping experience by allowing users to discover products through content they already identify with.
As Blake Chandlee, President of Global Business Solutions at TikTok, puts it,
“Our community has transformed shopping into an experience that’s rooted in discovery, connection, and entertainment, creating unparalleled opportunities for brands to capture consumers’ attention.”
Whether this transformation was brought on by the pandemic, where people felt starved of human connection, or just by a natural marketing shift that aligns with Gen Z communication styles, he believes the TikTok platform is uniquely positioned as the hub where content and commerce can coexist, and audiences can interact with content while making purchase decisions in real-time.
DTC Brands of the Future
The Shopify social partnerships empower DTC e-commerce brands by providing a pathway into the future of the online consumerism that is social commerce.
What does it mean to cater to this type of audience, and what does this type of content look like? There are many influential cues at play when a user is in a social media shopping experience:
- Social Proof, as the consumer sees others liking and commenting on the video
- Scarcity, as the videos may have a limited lifespan, which could create a sense of timeliness or urgency in making purchase decisions on deals
- Authority, as the consumer is connected with the creator and in that moment sees them as the only authority on the topic
- Liking Bias, as the user is watching someone they like to engage with for fun
- Reciprocity as the content creator is giving the user entertainment
- Consistency as the user has agreed internally to watch the content
- Unity as the user will be watching the content of someone who is similar to them and likes the same things, which makes the user feel a sense of belonging when they see others commenting on the content
The good news is that these are already factors of influence in traditional marketing, and sellers are now approaching this medium with a focus on social connection and entertainment to build a loyal audience.
What About Amazon Sellers?
For Amazon sellers who feel dependent on but also limited by selling only on the Amazon platform, the developing social commerce platform provides a way to break into DTC and diversify sales channels.
To add to this, Shopify reportedly overtook Amazon in traffic, which represents a huge win for the e-commerce platform as more and more brands are looking for new ways to build an independent brand and connect directlywith their audience.
While Amazon will likely continue to serve as a staple sales channel for many brands, this is an incredibly significant shift and opportunity for brands to distinguish themselves and become more defensible against competitors while also becoming less reliant on Amazon and less at the mercy of terms of service violations.
The Time to Act Is Now
Those who capitalize on this wave will likely have a competitive advantage, enabling them to leapfrog ahead of those in their space who remain stagnant.
While still in its early stages, it will be important to become familiar with these social media platforms and determine how to integrate them into your business.
With the content creator evolution, content creation is distinguishing itself as the number one way to build an audience in 2021 and beyond. With that in mind, you should be doing at least one of three things:
- Creating your own content → building up your brand and growing a loyal following. By doing this on social media, you put yourself right at the center of social commerce.
- Partnering with influencers → employing brand ambassadors who already have and are creating content and have a loyal audience that you can tap into. By partnering with influencers, your marketing efforts are boosted by all of the influencing elements listed above.
- Acquiring a content website to act as a mini-media company for your brand → instead of building your own audience from scratch, you can acquire an audience within your niche and jump into social commerce by connecting with that audience directly.
By taking action now, you’re setting yourself up to ride the wave rather than to be overtaken by it. Perform your own research, define a strategy that works for you, and build a moat around your business to defend yourself against the competition.
If interested in discussing potential content business acquisition strategies that could complement your e-commerce business, we recommend scheduling a free call with a business advisor to determine ways to potentially accelerate a content strategy.