At Econsultancy Live last month, TikTok’s Simon Hofmeister, head of vertical, ecommerce, shared some key trends on the platform and what they reveal about the future of commerce.
Hofmeister, whose previous roles included seven and a half years in performance marketing at Asos, discussed the power of entertainment in commerce and how TikTok’s community-based, creator-driven and conversational platform is changing the traditional purchase journey.
The power of entertainment
According to a 2020 Ofcom study, a third of our waking hours are spent watching TV and online video content. This is the context for usage of TikTok which, as Hofmeister points out, despite being described by many as a social media platform, is first and foremost an entertainment platform. “It’s a sound-on platform. You do not ‘check’ TikTok, you watch TikTok. It doesn’t serve as a second screen.”
Accordingly, one Kantar study found that 1 in 3 people say they spend a lot less time watching TV or streaming videos because of TikTok, highlighting again that the platform doesn’t act as a second screen but is a fully immersive experience.
The power of entertainment is pertinent for ecommerce, which can sometimes be a dull or unvaried experience. Globally, 1 in 3 people want commerce to be more entertaining (GWI Connecting the Dots report 2021) and Hofmeister believes that puts TikTok in a unique position to bridge that gap between entertainment and commerce.
TikTok’s mission is to inspire creativity and bring joy, and its own commissioned research has found that 39% of users say content that lifts their spirits is key in making purchasing decisions. Crucially, TikTok also does this through content that is humanised. In Hofmeister’s words, “It’s made by real people, for real people, about real people.”
Bridging the gap between entertainment and commerce
“Real people talking about real things and real situations are able to relate products to other real people in a very personal..way,” he continues.
There is a wide variety of content on TikTok that illustrates how everyday consumers are telling the story of a particular brand and its products in a positive, entertaining or amusing way.
Hofmeister shares examples ranging from a shopper sharing their visit to an Ikea store, creating short, funny videos and creating something close to an omnichannel experience, to unboxing videos and reviews.
Though video reviews are not new within social commerce, they are shown to be impactful on TikTok, with 40% of people saying that product demos influence their purchase decisions, according to one study. The high proportion of users on TikTok that create content means that shoppers returning to the platform and reviewing their purchases changes the traditional purchase journey.
The era of TikTok made me buy it – changing the linear purchase journey
“The traditional linear purchasing journey doesn’t really exist on the platform,” says Hofmeister. “What you have is people discovering products via the hyper relevant algorithm, based on what they like and what they’re interested in. People discover the products, they consider purchasing, and the brand can accelerate this with ads or by paying for extended reach and optimising for different objectives. Then, [those that purchase] – it’s quite normal for [them] to come back, review the product and participate in conversation around the product. And then again, go through and find other products, thus having this loop effect.”
Proof of the propensity for short, entertaining, humanised video to sell is the success of the ‘TikTokMadeMeBuyIt’ hashtag, which had seen c. 31 billion video views at time of writing, and is a key part of this product review culture on the platform.
“The hashtag goes beyond the platform, too, which is really interesting and exciting,” says Hofmeister.
TikTok and the future of commerce
“If you think about advertising traditionally, it generally interrupts what you’re doing and the content may look slightly different from what you’ve been looking at before or after and is generally quite intrusive,” says Hofmeister.
That dynamic is shifted on TikTok in three ways: a shift from customers to community, from influencers to creators, and from intrusive to conversational brand messaging.
Customers to community
TikTok turns solo shopping into a community activity, as the platform is full of what Hofmeister describes as “lots of niche places for people to find other people who like what they like, and who are talking about what they like in short form, snackable, entertaining, video format.”
Shoppers on TikTok are more likely to buy products from a brand if they can access the community built around them, with mainstream examples including ‘#booktok’ for books, ‘#foodtok’ for food, and ‘#gymtok’ for going to the gym.
Influencers to creators
“The traditional influencer model is to go and find people who already have a following, those that already engage with them and their content, and then get that person to endorse your products,” says Hofmeister.
“When we talk about creators, we talk about people that may not have a following but they are engaged with a particular community that is relevant for that brand. And these are just normal people who are very good at making content, that is entertaining and short form. And tapping into those particular creators on TikTok can supercharge commerce.”
Lounge underwear was one case study shared by Hofmeister. Lounge’s test with creator-led humanised, short-form creative was comprehensively more successful on TikTok than the high production value video they would normally produce in a studio. The brand saw a 72% increase in purchases and 72% reduction in add-to-cart CPA (cost-per-acquisition), when using TikTok’s Spark Ads, a native ad format allowing brands to boost organic creator posts.
Intrusive to conversational
As TikTok is a platform of humanised content, the expectation is for brands to show up in exactly the same way, to be authentic, and to relate to users. Hofmeister talks about brands “being bold in their conversations with the consumer, responding to their requests with videos”.
This includes responding to consumers who ask questions but also arriving in ongoing conversations about their products and brands, to keep people informed in an entertaining way that is natural on the platform.
With 2 out of 3 users saying they are likely to buy something while using TikTok, which currently has a billion users, there’s no doubt the platform is seeing an organic mix of entertainment and commerce. As Hofmeister puts it, “People used to see TikTok as about silly dancing videos – we’ve come a long way since then.”