‘Going through the whole marketing funnel’: Why L’Oréal is turning to TikTok for commerce boost
L’Oréal has amassed a sizeable e-commerce business over the years, spanning branded stores, affiliates, social networks, and marketplaces. Next up: TikTok.
Fans of the cosmetics giant can purchase products directly from the account pages of Garnier and NYX Professional Make-Up on the app.
Once there, fans will have multiple ways to see and subsequently purchase products, from short video posts, livestreams and listings in a special TikTok Product tab sat between the brand’s main feed and the liked videos tab.
To create the content, specifically the short videos and live streams, both brands are working with 14 TikTok creators including Char Barker (@charbarker) and Kaushal who have around 98,300 and 96,200 followers respectively. For now, the videos are essentially product demos filmed by both creators who then encourage fans to click on a link to purchase.
Eventually, these demos will be livestreamed, with L’Oréal looking to replicate the popularity these events have garnered in China where it was forecasted to have made CHY1 trillion ($150 billion), in sales last year, per KPMG and AliResearch.
“You can go through the whole marketing funnel in one step on TikTok,” said Lex Bradshaw-Zanger, CMO of L’Oréal U.K. and Ireland when explaining why commerce on the video app is different from its peers.
Platforms have attempted to get into this space before: Amazon tried with Spark but no one really used it. Neither Facebook nor Instagram has quite struck the right balance between influencers and brands. Content and commerce on TikTok — at least to Bradshaw-Zanger — are closer than anywhere else.
“Someone sees a creator talking about a product in a way that’s relevant to them and at the click of a button you’re at the product page making an order,” said Bradshaw-Zanger. It’s even more seamless after the first purchase as the buyer doesn’t have to enter either payment or address details again, he added.
As frictionless as this is, a lot of has been smoothed over behind the scenes to make it happen. The way L’Oréal worked with creators had to change. It was no longer being very prescriptive about what creators could and couldn’t do with the product and the content. Instead, they were given more freedom to capitalize on the quirky, unabashed dynamics that underpin what people like to watch on TikTok. Then there was the fact that so many different teams had to come together. In fact, L’Oréal had both a digital advocacy exec and a digital commercial exec working to push the partnership forward.
Despite the heavy lifting so far, there’s still more to do.
L’Oréal’s marketers are already working with TikTok to make it easier and faster for people to make their first purchase after watching one of its videos, for example. It’s just one of a raft of considerations the marketing team is grappling with during these early tests. And if all goes well over the coming weeks then other brands would be sold on TikTok perhaps by different creators in different ways, said Bradshaw-Zanger.
“We need to see how all the different pieces work, from the creator to the content, the media and the sales before we decide on what happens next,” he added. “We don’t just see the work we’re doing around commerce on TikTok as a sales driver. The content we’re creating works at the top of the funnel for awarenes and consideration.”
Don’t be surprised if TikTok starts receiving more media dollars as a result.
“The time where you could rely on organic distribution to do everything is gone because the market is so cluttered and you consequently have to be more specific about the people you want to reach,” said Bradshaw-Zanger. “If you don’t put the media spend behind the content then you don’t necessarily choose who you reach. Plus, the younger generations aren’t as concerned about seeing a sponsored piece of content in the same way older generations were.”
Naturally, L’Oréal’s latest foray into commerce on social networks is informed by what’s happening in China. In 2019, for example, social commerce made up 11.6% of retail e-commerce sales at $186.04 billion (1.285 trillion RMB), per eMarketer. For context, the corresponding figure in the U.S. was $19.42 billion over the same period. But replicating this success in the west won’t be as simple as “copying and pasting” what’s happened in the east, said Bradshaw-Zanger.
Not when the platforms are structured so differently. In the East, the platforms are vertically integrated so a shopper can go from seeing an influencer to viewing the promoted product before buying it in seconds. That’s hard to do in the west where the platforms are more “horizontally integrated” so transitions between the different experiences aren’t as smooth.
“Given [TikTok owner] ByteDance’s Chinese roots it potentially gives its management team a different strategic view of where its business will come from compared to Facebook and Google,” said Bradshaw-Zanger.
TikTok has made no secret of its plans for e-commerce. Advertisers have been speaking to TikTok about them since last year. Understandably, given its Chinese roots, TikTok sees commerce as another way to carve out a niche for itself in media and advertising as it continues to position itself as an entertainment platform rather than a social network.
“Gen Z is a valuable demographic — the next generation of shoppers and current generation or trend-setters, in many ways — that retail brands are looking to relate to for good reason,” said Dave Bruno, director of retail industry insights at commerce technology firm Aptos. “TikTok, among other channels like Snapchat and YouTube, are proven channels to create stickier relationships with these young consumers outside of more traditional retail channels.”
Cheat Sheet: Inside Carrefour’s ‘competitive’ retail media pitch to advertisers
As it stands, 20% of Carrefour's store sales are already influenced by its digital ad sales.
‘Mindset that this is going to be long-term’: Inside Visible’s influencer marketing strategy for Pride and beyond
The digital-only phone carrier from Verizon, believes that fostering an on-going relationship with influencers will allow the audiences to get to know the brand authentically.
How Complexland 2.0’s gamefied virtual shopping festival increased sponsorship revenue by 60%
ComplexLand's return is helping sponsors and attendees get closer than virtual events typically allow.
SponsoredIdentity solution fatigue is setting in: How to keep moving
By Kristina Prokop, CEO and co-founder, Eyeota As we move deeper into 2021, the desperate search for identity solutions that can smooth marketing organizations’ transitions to a cookieless world is reaching a fever pitch. There’s no shortage of new identifiers and identity technologies vying for attention — and that’s a big part of the problem. […]
How Untuckit embraced virtual clienteling software to drive sales
Untuckit’s live chat sale conversion rate is over 20% — a point of pride for the company as all retailers struggle to keep online shoppers happy.
‘A symbiotic relationship’: Why social media platforms are getting in front of the growing creator economy
Social media platforms are rolling out the red carpet for creators, in hopes of capitalizing on the growing creator economy.