TikTok Shop: The catalyst for social commerce’s resurgence or a fleeting fad? Marketers sound off

There’s been a discernible shift in how marketers are willing to spend on TikTok Shop, a la TikTok Shop’s affiliate program. Three to six months ago, that spend came from experimental budgets earmarked for testing and learning. Now, it’s coming from marketing and/or performance budgets, he added. If that starts to perform, clients will spend more, he said without offering specific spend figures. 

“Over the course of the last 90 days, we see very prominent CPG brands approaching us about live shopping, social commerce, et cetera, that we talked to even six months ago, nine months ago and it wasn’t on their radar,” he said. (Zubin did not specify which brands were inquiring about TikTok shop capabilities). 

Since last year, brands like Dude Wipes flushable wipes, The Ordinary skincare and Goli Nutrition wellness brand have set up shop, with products in the shop tab, via affiliates or live streaming. This time last year, some brands reported TikTok sales were a slow burn. (More on that here.) This past February, eMarketer reported TikTok Shop sold more than 68% of social shopping gross merchandise value (GMV). In other words, TikTok Shop was responsible for the bulk of products purchased through social media platforms. It’s unclear if brands still see it as a slow burn, but earlier this month TikTok Shop’s reported gross sales have topped $1 billion monthly since July, according to The Information.

In comparison to other countries, namely China, U.S. consumers have been hot and cold about live shopping and social commerce. TikTok is only the latest player in the game. For years, publishers and retailers have been trying to recreate QVC-style selling across digital platforms, including streaming, social and live television. Amazon launched its own rendition of this with “Style Code live” back in March of 2016. It was shuttered just over a year later. In 2020, Instagram launched its Shop tab where users could shop in-app, removing it from its homepage navigation bar last February. 

The trend with influencers and brands showcasing products in real time to drive sales has had an on-again, off-again relationship with U.S. shoppers in recent years. TikTok Shop, however, has ushered in a new era of the QVC-style shopping experience, but it’s yet to be determined if this signals the long-term rise of social shopping or if TikTok Shop stands to be the canary in the coal mine. 

TikTok Shop launched in the U.S. last September as an environment in which brands can list their products on TikTok Shop to have them featured in videos, live streams and on the TikTok Shop tab. Meanwhile, influencers and creators promote said products through affiliate marketing, earning commissions on sales. (See TikTok’s pitch deck for brands here). 

For the past few months (on the heels of TikTok Shop), however, there’s been a resurgence of social commerce efforts from the likes of Pinterest and Amazon. And last month, Paramount Global partnered with shoppable advertising company Shopsense AI to bring live shopping to the MTV VMAs. 

All signs, industry experts say, flick at an inflection point in the social commerce landscape for live shopping to be on the up once more. There’s momentum again, but there are a few crossroads before marketers can ultimately read the tea leaves around social commerce success, execs say.

Firstly, there’s the ever-looming TikTok ban that has sparked hesitancy for some brands worried about going “all in” on a platform whose days in the U.S. may be numbered. Second is saturation in the marketplace. If every TikTok surface becomes shoppable, retailers worry it could create friction with shoppers, ultimately driving them away from in-app purchases. (Some social media users have critiqued the app’s push to become a platform where brands can sell, saying TikTok has gone from a social media platform to a sales platform.) Finally, social shopping has hit a wall in the U.S. before and who’s to say it doesn’t hit it again? 

Eric Olson, vp of performance marketing at Empower Media agency said the agency has experimented with Meta Shop, which allows users to buy and sell within Meta’s ecosystem. Campaign data over the last few years has shown about 20% of clicks from an ad click-through to a brand’s shop, Olson explained. However, he added, only 5% to 10% of total purchases are happening in Meta’s ecosystem, “and we’re seeing conversion rates and ROAS numbers that are up to 80% lower than when a shopper is driven to the website,” he added via email.  

That’s not to say that the juice isn’t worth the squeeze when it comes to social commerce and live shopping, he added. ”I do however think we are still a couple years away from reaching a critical mass on the volume of shoppers that use this as a viable form of purchases, and as a way to capture new areas of revenue for most brands,” he said. 

What TikTok Shop gets right is its ability to close the path to purchase. Meaning, if a user sees a product on TikTok Shop, it can be purchased without ever leaving the app. Also, its shopping feature is embedded directly into the app’s discovery page. That plus its influencer-led content made it easier for the app to position itself as the next QVC, Michelle Baumann, chief strategy officer of commerce at VML ad agency. She added that VML clients are less interested in spending marketing dollars on live shopping, but are starting to experiment with influencer and affiliate marketing with TikTok Shop. 

“Ideally if we really believe in this idea of compressed commerce and using it for discovery and purchase, it’s actually creating awareness and conversion all at once,” she said, flicking through to the idea that TikTok Shop serves to be a place of brand awareness and direct response at the same time given the aforementioned embedding of e-commerce into the For You explorer page. But if the TikTok Shop playbook can be recreated across other platforms enough to make “As seen on TV” become “As seen on social media” is yet to be determined, she added. 

“Right now, it’s just a TikTok thing. I don’t know if it will turn into more. A lot of these other trends or other platforms are just further behind,” she said. Meaning, per the three experts Digiday spoke with for this piece, despite another uptick of interest in live shopping and social commerce, TikTok Shop seems to be the canary in the coal mine — for now.