Not surprisingly, the ongoing pandemic has been accelerating the logical shift to omnichannel purchases. Consumers from all over the world tend to prefer purchasing items through popular social media apps like TikTok aside from brands’ own websites. Shopping through traditional brick-and-mortar stores has become less preferred due to convenience and cost-savings factors.
Industry analysts agree that most businesses were aware this trend was coming even before the pandemic. But everyone was surprised when Covid-19 abruptly changed the ways of the world—consumers were forcibly trapped at home with no other option but to make purchases for necessities and other items online or through e-commerce platforms.
It has been the perfect time for TikTok—to dominate the social media sphere, influence consumers’ shopping habits, and ultimately, have an impact on the supply chain not just in China where it originated in September 2016 but all over the world. Now with over a billion active monthly users, no one could underestimate the power of this short-form video sharing and entertainment platform.
Interestingly, in just a brief period, it has been changing even the way businesses plan, execute, and manage social media campaigns and marketing. For any firm to aim to start engaging target consumers and audiences, TikTok instantly presents the opportunity to take advantage of the immense opportunities through content that could guarantee conversion—more easily and more quickly.
TikTok has truly changed the game, surprisingly in many and very simple ways.
TikTok’s social media explosion
TikTok is the first influential social media app that is run outside Silicon Valley, the world’s major tech hub. That could have been the reason the social media platform once dealt with myriad of controversies especially in the US. It endured being a maligned app when former American President Donald Trump considered banning it in the U.S. There are still speculations about TikTok supposedly being a security threat to the Western world.
But none of those has stopped the rise of TikTok. On the contrary, the social media app has exploded and instantly turned into a staple in many people’s smartphones. It has popularized short-term videos that ranged from silly to educational. And there is still nothing that can stop it from evolving.
TikTok is now not just a threat and competition to the once super giant social media app Facebook. It is clearly the force that Facebook must endure to prevent its demise. And no other social media app could accuse TikTok of being a copycat. The reality is that this entertainment app has discovered an effective way to capture the attention and fascination of people from across all races.
So how did all other social media platforms fall when TikTok emerged? It would be appropriate to look back at how the early players did it. Facebook and its predecessor MySpace depended on networking between and among friends. The social media connections established were bi-directional—a person has to accept friend request to get connected with another—making the two connected parties see each other’s posts through personal feeds.
From friends, the connections in Facebook inevitably broadened to include extended family or relatives, then to random acquaintances. For some time, Facebook was effective in connecting with unknown people that later on became personal connections. Eventually, the content from these connections started to get boring, less interesting, and even irrelevant. Twitter, Instagram, and even LinkedIn for a time emerged as alternate avenues to follow people who are not connections.
Social media influencers also emerged with the popularity of YouTube as a platform for interesting and engaging videos. Those influencers also expanded their reach through Facebook, Twitter, and Instagram. But people’s longing for interesting and relevant content continued.
TikTok’s effective social media algorithm
TikTok chaged the social media landscape through its unique ‘For You Page,’ a feature based on an algorithm that gives way to discovering and curating entertainment viewing based on interest. This enables TikTok to personalize each user’s feed instantly, eliminating irrelevant and disconnected news feeds and at the same time, revamping the typical scrolling experience.
For You Page is the showcase of TikTok’s artificial intelligence. Every TikTok user has his own unique For You Page with feeds that are customized and personalized not just to his interests but also to his curiosities, beliefs, and passions. In fact, some people may think that TikTok may know them more than they know their selves. And this kind of personalization of the For You Page happens in just a few minutes, continuing the process as a user passively watches or skips TikTok entries.
That algorithm has made TikTok so addicting. A user may not be aware that he is already spending hours just swiping up to watch TikTok content curated just for him. And because this social media app is so absorbed and focused on you, it is working like a speedy matchmaker—except that it does not match prospective dates but TikTok entries that may instantly catch attention.
Social graph vs. interest graph
The social media success of TikTok could also be attributed to its algorithm being an ‘interest graph.’ This differentiating feature works by capturing a user’s likes and dislikes through the content that he watches and interacts with when using the app. At the same time, the interest graph also associates the user to other users in groups that share the same interests.
This is in contrast with ‘social graph,’ which is more evident in older social media platforms like Instagram and Facebook (which ironically are both owned and operated by the same company). The social graph works by connecting a user in a network of people he may have any relation with. The insights gathered by the social networks are then used to select the kind of ads appearing on his feed. There is the assumption that the user shares similar interests and spending behaviors as others he is connected with in the network. This, we know does not always work. Thus, TikTok and its interest graph is considered more accurate in knowing a user more.
The rise of TikTok shopping
In September 2021, social media celebrity Kylie Jenner became among the first influencers to sell on TikTok via the then new feature TikTok Shopping. In a short time, @KylieCosmetics sold all its listed products on the account’s shopping tab. That brought the new era in e-commerce, also known as social commerce. The hashtag #TikTokMadeMeBuyIt was born and has generated more than 16 billion views on the app so far.
On a young age, TikTok transformed into a social media app that recommends products and drives e-commerce. Numerous brands are lining up to get into TikTok Shopping because the phenomenon is logically effective in making them and their products get more attention and enjoy instant conversion.
TikTok has been exploding not just as a social media app but also as a modern shopping platform. What more could businesses ask for? The app has more than a billion monthly active users across the globe. Those users would be easy targets of creative and native advertising in ways that only the platform could facilitate to date.
Based on TikTok’s own in-app research, about 67% of users are inspired to shop when using the app even if they don’t have initial plans to purchase. About 73% of users are developing a deeper connection with brands they see and interact with on the platform, and another 78% think the brands sharing ideas and working with users are the best.
Here are the strengths of TikTok as a shopping platform in the new normal.
Reaching broader shopper demographics
Contrary to what many think, TikTok is popular not just among Generation Z people, although they logically dominate as users of the app accounting for 43.7% of total users globally (aged 18 years to 24). About 32.2% are Millennials or aged 25 years to 34, while 13.8% are Gen X or aged 35 to 44 years. People aged 45 to 54 years account for 6.9% of TikTok users, while seniors aged 55 years and higher comprise 4.3%.
Brand messages get personalized
TikTok video creators have become influencers that recommend products and brands to other users. This takes brand messages to a personal level. It is a common knowledge in new-age sales that consumers are more likely to trust friends, family members, or people they know when it comes to recommendations on shopping decisions. This makes TikTok work as a shopping platform.
Creative selling of products or brands
You’ll be surprised how many TikTok users showcase creativity when creating short-form videos that are meant to catch attention and entertain. That level of creativity is also carried out when executing videos that are meant to influence shoppers or to sell. And because TikTok entries tend to get more engaging, brand messages are conveyed more effectively, prompting users to act impulsively while using the app.
Taking advantage or viral videos
It is easier to create a viral entry in TikTok than in all other social media platforms. A single TikTok video can spawn many more versions—as creators are able to dub-smash an original video for their own videos. A viral post becomes even more viral when other users tend to pick it up and generate their own versions. Imagine what happens if that viral entry is selling a brand or product. The reach can be unimaginable.
Impact on supply chain
TikTok is proving to be an effective channel for what can be described as ‘explosive growth’. As such, it can significantly impact e-commerce brands. Because of its high engagement and popularity, the short-video sharing and viewing app could possibly make a brand or product viral overnight.
That is good. But can all brands meet a possibly unexpected clamor for a product? It would be an ideal problem or a dream coming to reality for most businesses. At the same time, such a possibility could instantly turn into a nightmare for a brand’s supply chain.
A very effective TikTok ad can cause demand spikes and product shortages, which some manufacturers could find impossible to resolve overnight. Brands that utilize TikTok to reach consumers must realize their need to redefine their current supply chain if they intend to keep up with the unpredictable and disrupted market demand.
Demand planning is becoming a must but should be carried out in less conventional ways in the TikTok era. If a brand fails to be effective in doing so, it could be doomed to experience the ‘Bullwhip Effect.’ With this distribution channel phenomenon, fluctuating demand could affect the supply chain and ripple down the line with serious business impact.
That could lead to forcibly increased production coupled with inaccurate demand forecasts, and worsened by inconsistencies in inventories. Ultimately, these could end up in pressing issues like product shortages, longer wait-listings, possible stockouts, unsatisfied consumers, and a need for higher working capital.
A brand relying on TikTok for advertising and sales must also learn to make its supply chain more resilient. It means the business must be able to anticipate potential demand changes before those actually happen. Failure to do so could negatively impact the supply chain and diminish revenue projections. Business owners and operators know that it seems easier than actually done.
Social media has become a part of our lives. The rise of different platforms like TikTok is part of its evolution. It has to start simple, then there would be iterations and changes in the way things are done. End users, businesses, content producers, and all stakeholders must fully understand the dynamics of TikTok to actually enjoy it more and use the platform more productively.
TikTok as a shopping platform could bring about many other possibilities. As a major player in social commerce, the platform is undeniably an effective tool to boost sales and reach out to more consumers across different age range. But the supply chain side of brands must also be aware of demand fluctuations TikTok advertising could instantly and possibly bring up. A spiked demand could be a good problem, but it could also be a serious one because if not immediately addressed, it could ruin a brand. Indeed, TikTok could be a boon or a bane.