TikTok has an estimated one billion monthly active users as of January 2022 — an astronomical feat for a platform that sprung to life in the last 6 years. Popular with younger audiences, the app is still considered a new kid on the social network block. But despite a tight demographic, its rise to dominance is undeniable.
TikTok now has more worldwide users than Pinterest, Snapchat, Twitch, and Twitter, so it’s no surprise that it’s become a hotspot for businesses to target audiences. Amazon is one of the most recent retailers to hedge their bets on the app, with a dedicated ‘Influencer Program’ and strong focus on their beauty department. But why the fuss for a platform that older audiences aren’t bothered by?
In its humble beginnings, TikTok (previously Musical.ly) was a fun digital space to show off your lip syncing prowess. Fast forward and the platform has transformed, now successfully merging entertainment with commerce. If you sign up and scroll, it doesn’t take long to see that TikTok has become a cultural headquarters, a place to discover current trends on just about anything you desire.
And it would seem that users desire a lot! “TikTok made me buy it” is a phrase coined by ultra trendy Gen Z, a generation that looks to influencers to guide their purchasing decisions. Through product demonstrations, unboxing videos, testimonials, and before and after footage, beauty influencers are driving huge product sales. Savvy brands, (Fenty Beauty, The Ordinary, and e.l.f to name a few) have begun utilising this type of engagement to build communities and drive conversion. Amazon’s Influencer Program is also proving lucrative!
Success So Far for Amazon
In November 2021, Similarweb published findings from a report that highlighted the impact TikTok is having on Amazon’s beauty sales. Shaving cream brand, EOS, was shown to increase monthly revenue in one product by 171%, the result of a viral video. What better proof that influencer marketing yields remarkable results?
EOS wasn’t the only brand adored by TikTok users that made it to Amazon’s beauty bestsellers. The analysis concluded that viral beauty products earned an average of 85.3% month-on-month growth. That’s a huge leap, the result of the platform’s democratic approach to content.
With users dictating popularity, brands that flourish on TikTok successfully jump on trends, involve themselves in viral challenges, and engage with their audience in an authentic way. But if most influencers are producing entertaining content with a less direct approach to selling, a few questions remain for businesses.
With lightning fast growth, how do we know if the appeal of snackable content has long term credibility? Are all retailers set to succeed if they join TikTok? Or, are there challenges to come up against?
A World of Opportunity
Last year, TikTok caused a stir by streamlining their browsing experience with a Shopify partnership. No longer would users have to switch apps to purchase a promoted product; they could buy then and there. This seamless experience can now be offered to an unlimited number of potential customers, as the app currently offers one of the largest audiences in the social media space. Available in 155 countries, brands have a chance to break into new markets, expand rapidly, and increase growth.
For brands with a creative flare - or outside-of-the-box attitude - the TikTok feed also presents itself as an exciting way to generate sales. Advertising on TikTok follows no clear format, so content can be original, even downright silly. If brands are smart (and lucky!) enough to create a viral video or hashtag, the financial reward could be epic.
Brands with endless creative resources should think about TikTok as an advertising platform, but that’s not the only consideration to be made. TikTok ads are priced far higher than comparative platforms, so cheap and cheerful campaigns aren’t an option. Strong sales conversion appears to be dictated by successful influencer content, but fees for content creators can be high too. Unless a brand's unique hashtag generates a tonne of USG (User Generated Content), results may not justify the investment.
An additional and obvious limitation of TikTok is the narrow user demographic. Even a brand with deep pockets and creative genius could fail if their target audience is over 30.
The Infinite Loop
But Amazon has plenty of capital and seems unphased by the demographic limitations. Current beauty and retail trends are being driven by Gen-Z’s enthusiasm for self care, and appreciation for tried and tested products. TikTok testimonials play a pivotal role in establishing trust with consumers, so it’s no wonder Amazon anticipates that their investment in the app will continue to generate profits.
Their willingness to go all-in with a relatively young platform is explained by a 2021 study conducted by Material for TikTok. The social media network aimed to understand the role their app has in perceptions across a consumer’s retail journey. Results suggested there was significant impact at every stage of the process; the platform both drives the discovery of new trends, and influences decisions beyond the purchase as communities continue to upload content related to their experience of the product. They call this the infinite loop and it’s a perfect representation of what is working so well for Amazon — and may pave the way to success for other beauty brands.
By Tash Courtenay-Smith – serial entrepreneur, ecommerce expert and the CEO of Bolt Digital, a direct-to-consumer marketing agency.