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03/15/2021

Retailers Flock to TikTok

While its potential as a selling tool is still to be determined, retailers have been moving to establish their presence on the social media platform.

Walmart hosted its second shoppable livestream event on TikTok last week, leading the charge as more retailers explore the platform’s potential as a marketing and selling tool.

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The mass merchant was first to test TikTok’s “shoppable product experience" in December, allowing consumers to shop apparel items during a one-hour livestream that drew seven times more engagement than expected, according to the retailer. For its second TikTok livestream event on March 11, Walmart employed TikTok star Gabby Morrison to give a 60-minute beauty tutorial.

While the first event mostly showcased the retailer's private labels, Walmart's latest livestream spotlighted products from national brands such as LVMH's Marc Jacobs as well as L'Oreal's Maybelline and CeraVe. It also included a sweepstakes awarding three bundles of home decor and beauty items. To enter, consumers had to follow Walmart on TikTok and send the retailer a private message including a secret code word shared during the event. Southfield, MI-based Merkle administered.

Though retailers' TikTok accounts are still in their early stages, major chains such as 7-Eleven, Walmart, and Target are experimenting with creating content geared toward younger generations on the platform as part of their social media strategies. Many videos posted by retailers highlight their in-store shopping experiences, private-label products and COVID-19 responses. Retailers also aim to leverage the viral nature of the platform to gain exposure by imitating internet trends or attempting to create new ones.

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7-Eleven, for example, became particularly active on TikTok last summer. As the COVID-19 pandemic forced the convenience store chain to modify its summertime promotions, the retailer posted dance videos of viral trends boasting how refreshing its proprietary Slurpee beverages taste when it’s hot outside in an effort to maintain engagement with its shoppers.

Influencers play a big part in extending retailers’ reach on the platform and provide an avenue for shopper marketing activations. In the early days of TikTok in 2019, Target — before it had even established its own account — tapped Victoria Bachlet, who boasts over 3.7 million followers, to share a back-to-school-themed video promoting the retailer's private-label products and the exclusive Vera Bradley X Venus collection from Procter & Gamble. Similarly, Walmart employed Brittany Braski, who has over 6.1 million followers, to test and review P&G's Kiwi Botanicals skincare products.

While social platforms go in and out of style — short-form video sharing app Vine being a notable example of a trend that rose and fell — it is important to note that TikTok has been the fastest growing social app since 2019 and it shows no signs of slowing down. The app was already gaining traction during the beginning of 2020 and was buoyed to peak popularity by the COVID-19 pandemic. As consumers were required to maintain social distance physically, TikTok gave them a digital space to connect and spawned countless viral hits. The app has been downloaded over 200 million times in the U.S., with over 100 million active American users, approximately 65% of whom are under the age of 30, according to social media ad agency Wallaroo Media.

At one point, Walmart was even exploring a joint deal with Oracle to purchase a stake in the platform's U.S. operation. That action was largely driven by former President Trump’s national security concerns over the app's data collection practices and has stalled since the recent change in presidency.

The next logical step will be for TikTok to create an in-app shopping experience, rivaling its closest competitor, Instagram Shops. The company in Indonesia is already testing a platform dubbed TikTok Shop: Seller University that allows retailers and third-party sellers to create stores, accept payments, and interact with customers directly through TikTok. If the functionality comes to the U.S. it will enable a wide array of new shoppable features, such as product catalogs for brands, the ability for TikTok influencers to earn commissions directly through the application, and more livestream services.

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