Ecommerce is Coming to TikTok! What the New ‘Shop-Now’ Functionality Means for Advertisers

Earlier this month, TikTok began testing it’s new in-app ‘Shop Now’ functionality in a massive step towards competing with the likes of Facebook and Instagram – gearing up to release an ecommerce feature. So what will this mean for your TikTok strategy? And who are the winners and losers in this new release? 

Elizabeth Sutton & Bryony Barrow

Until now, TikTok has been a channel focused on awareness, creating brand voice and brand affinity, but with the expansion to in-app purchasing it opens up a whole new channel for retail brands to explore and drive purchases. As it stands only 3% of marketers choose TikTok as one of the most effective social media channels, but that could all change with the introduction of a StoreFront function.

The Winners

It perhaps goes without saying that by creating new ad formats, TikTok will reap the benefits of increased investment. The new feature will hit two birds with one stone; simultaneously encouraging brands to source influencers through TikTok’s creator marketplace, and opening up a new ad format (and revenue stream). This move sets them apart from the Instagram model, where the agreement between brands and influencers are often made through an agency, and instead places them front and centre as the gatekeepers to their content creators. 

Brands will also profit from the eCommerce update with the ‘Shop-Now’ CTA feature improving their ability to measure the success of a new piece of content. Typically the success of influencer marketing has been difficult to measure, as the point of impact in the journey a user takes to a purchase is often unclear. It will no doubt calm some nerves when it comes to signing off budgets for TikTok (and for influencer content) as brands will now have the ability to include a CTA within the ad (increasing the traffic driven through the ad).

Another winner is small to medium businesses. With 52% of users saying they discovered new products on TikTok, a ‘Shop-Now’ feature will open up a world of opportunity for small businesses to create a streamlined user journey from engagement to purchase. Driving substantial growth and a new revenue stream for those who’ve built a strong following.

The Losers

However, the addition of an ecommerce feature to TikTok won’t necessarily benefit everyone. Influencer agencies could be held back with the implementation of the new CTA across influencer content. The creator marketplace created by TikTok already makes it easier than ever for a brand to manage and source influencers themselves, with the ability to filter by audience location, interest and age built in. With this new feature likely being set up through the marketplace, brands will continue to be encouraged to use this platform, therefore skirting by the need to access creators through an agency.

Users could also feel the impact of the new release. Unlike other platforms we see in the industry, TikTok delivers genuinely native advertising for their audience, with less disturbance to the user’s experience on the app. The format calls for relaxed and relatable content fitting in with the user generated content – rather than over-produced and slick advertisements. With 43% of TikTok users feeling that the advertising on the platform blends in with native content, how will the potential storefront feature impact user experience? Brands need to keep an eye on the shift from awareness led creatives to performance driven creatives and ensure they maintain a happy balance. 

How to Prepare?

As it stands TikTok is a platform that showcases organic, and natural content – a far cry from the sponsored social posts, and carefully curated content that adorn the likes of Instagram and Facebook. While the introduction of the ‘Shop-Now’ feature could throw a spanner in the works, TikTok will continue to be a platform with an organic look and feel – and advertisers need to take this into consideration when planning their strategy. 

Brands need to become more comfortable sharing flexible briefs that allow influencers and content creators to tailor their ads to appeal to certain audiences and reflect the latest trends. Getting the most out of TikTok content will ultimately depend on whether or not brands can relinquish control over the exact messaging and style that creators will provide. Potentially a small price to pay to resonate with the savvy Gen-Z audience?

It’s worth noting that the majority of benefits associated with TikTok’s new ecommerce feature are being introduced in partnership with Shopify, which is normally only used by SMB’s.  If you’re a mid-size or larger retailer with a different POS system you will not see these benefits at the moment.

The incoming release of a Shop Now in-app feature promises an exciting testing ground and an opportunity for TikTok to prove itself as a revenue driver and demonstrate how well their audiences work. However, it’s vital that advertisers don’t forget the value it’s driven outside of purchase actions and they retain the fun and creativity TikTok placements give them. 

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