The e-commerce clock is TikToking

What do 57-year-olds do when their daughters send them TikToks? Ignore them, mostly. I’m interested in short, mostly inane videos to about the same degree that I am interested in exfoliating creams, Taylor Swift and growing a man bun.

But, in 2012, as Facebook continued its quest to take over the social media world, a college administrator invited me into the executive suite to answer one question: What’s next? What platform should college administrators be keeping an eye on?

My answer: TikTok.

While TikTok’s rise took longer than I expected, there’s little question that it is the platform of choice for younger consumers. Of course, people of all ages use it — mostly to amuse, share memes and earn “influencer” status. Increasingly, though, they are using it to shop, buy and sell.

A quick search of headlines related to TikTok and e-commerce turned up early leads on what must be a huge push into several different businesses and industries by the social media company. (Notably, TikTok is Chinese owned and recently Brendan Carr, a commissioner on the Federal Communications Commission, called for a ban on TikTok because of data privacy and security concerns. From privacy and data perspectives, TikTok should be on all its U.S. users’ watch lists, because U.S. law can’t necessarily protect them.)

Fear of missing out

Most notable among these headlines, at least to me, appeared at SupplyChainDive and describes a hiring frenzy for TikTok’s startup global order fulfillment centers. This pits TikTok against Amazon, and it signals a multifaceted strategy to help users deploy video to move product.

Already, the company has amassed a robust database of user preferences, tastes and interests, and it’s growing this database by doing what Facebook taught tech to do: Covertly scouring the web to track wish lists and shopping carts. According to another report, TikTok claims that it is able to determine whether a user is likely to buy anything. Anything!

Social commerce is a market valued at more than $700 million, according to Statista, a space crowded with heavyweights such as Alphabet, Meta and Amazon. TikTok brings to this mix an emphasis on virality, which for e-commerce means the fear of missing out. The TikTok generation is highly susceptible to this fear, and it is this fear that fuels the fast growth of everything from product drops to pop-up shops to limited edition sales.

It’s gotta be the shoes

I’m familiar with FOMO and the power of the product drop. For the Air Jordan Retro 3s — the UNC edition in powder blue — the aforementioned 57-year-old had to download a merchant’s app, register for a raffle, enter the raffle in hopes of “winning” an appointment at the merchant’s brick-and-mortar store to maybe get the opportunity to drop $250 for a pair of kicks. This 57-year-old did all of these things — and lost out.

OK, now he’s angry, which is a form of inspiration. He hit the aftermarket and spent $350, but he got his shoes.

FOMO, or viral commerce, is engendered, fed and manipulated online. This is the social commerce aspect of it, and this is why TikTok cannot be ignored.

Releasing limited-edition items in small numbers and doing so at a particular time on a well-publicized date can be done online or offline, of course. But social media can best create and nurture the FOMO. It’s working in skateboards, pajamas and even pizza. I subscribe to Talia di Napoli so we can jump on the Italian company’s limited-edition pies that sell out faster than it takes to make a pie.

Behavioral experts tell us that product drops like these provide the elements of surprise and scarcity that lead to excitement, urgency and action. They work even better in combination with boredom, which is why so many product categories benefited from them during the early days of Covid-19. (It also explains why social commerce has temporarily flattened out in terms of growth.)

Drops also transform a decision that otherwise can be postponed indefinitely into an impulse purchase, which makes them an appealing possibility in home furnishings. They decrease overhead. They keep demand high, often generating a healthy secondary or aftermarket.

And they support premium pricing. Because they are socially driven, drops create buzz, grab attention and foster conversation.

Live, love and skate on

One of the more intriguing examples of the drop phenomenon is Bear Walker in Daphne, Alabama, who produces 250 skateboards per collection and no more, no matter how high demand might be. Walker’s new collections come out one at a time about every six weeks, which builds scarcity, maximizes planning and inventory control, and makes each and every one of those 250 boards special. I want one, and I don’t even skateboard.

Walker’s drops sometimes sell out in 45 minutes, according to the description in The New York Times.

Circling back to TikTok, the app’s social commerce strategy looks to combine global fulfillment with another Facebook play, which is coaching merchants on how to use the platform to catch the attention of would-be customers.

This past summer, TikTok started up an educational small business program called “Follow Me.” In June, the company began testing a Shop feed to spotlight products and sellers. And in August, the company partnered with Shopify to allow that site’s merchants to add a shopping tab to their profiles.

TikTok has also developed tools to allow brands to create, run and monitor ad campaigns on the platform, yet another playbook page from Facebook.

With an estimated 750 million monthly users, TikTok should not be ignored, not even by a 57-year-old not skateboarding in Retro 3s — and certainly not by home furnishings retailers and distributors with very reasonable fears of missing out.

View Comments (0)

Leave a Reply

Your email address will not be published.


Subscribe Now to the FREE Design News Now newsletter for the latest in product, design and retail trends in the home furnishings industry. Delivered to your inbox weekly!

Scroll To Top