Consumer Discretionary

TikTok Opens A New Era For Retail

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<p style="text-align: justify;"><strong>Readers of my articles know that I preach the following:</strong></p><ul><li style="text-align: justify;">The Holy Grail of retail is social commerce. The ability to purchase a product from a social media website while watching a TV show or a video on the phone.</li><li style="text-align: justify;">Social commerce will fundamentally impact supply chains and logistics as brands and retailers build ecosystems to meet customer demand for same-day delivery.</li><li style="text-align: justify;">The biggest untapped market in retail in the USA is influencing consumers to create social networks whereby they can purchase products as a group to receive price discounts.</li><li style="text-align: justify;">Retailers continue operating with business models designed for another era, especially advertising TikTok.</li></ul><p style="text-align: justify;">&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 14pt;">TikTok&rsquo;s Potential for Growth in Social Media and Commerce&nbsp;</span></h2><p style="text-align: justify;">I made a name for myself in July 2019 when I recommended Walmart and Microsoft to team up and acquire TikTok. Most people assumed I was wrong when I suggested. Friends of mine reached out to me to say that I needed to stop making such predictions.</p><p style="text-align: justify;">In August 2021, Walmart and Microsoft did team up, and they approached ByteDance, the parent company of TikTok, about an acquisition. The fact Walmart and Microsoft didn&rsquo;t make the acquisition will go down in business history as a massive, missed opportunity. Even worse than Blockbuster not acquiring Netflix when they were given a chance.</p><p style="text-align: justify;">In 2020, I also recommended that ByteDance should acquire Shopify. The companies formed a partnership in 2021: bad idea, Shopify. They are teaching ByteDance how to copy everything they are doing. By 2024, ByteDance will be preferred by brands over Shopify for e-commerce. And then Shopify dies.</p><p style="text-align: justify;">From 2021 to the present, growth at TikTok has exploded.</p><p style="text-align: justify;">Zhang Yiming, the founder of ByteDance, has stated that blending entertainment and buying is the focus of his next breakthrough. ByteDance generated $58B in revenue in 2021. ByteDance is valued at over $300B.</p><p style="text-align: justify;">Like Amazon, ByteDance is a &ldquo;virtual company&rdquo;, meaning it can do virtually anything it wants. ByteDance will increase its focus on Search, music, original programming, and so on.&nbsp;</p><p style="text-align: justify;">Note to LinkedIn: TikTok can quickly become the go-to platform for business connections. LinkedIn better disrupts itself and fast.</p><p style="text-align: justify;">I anticipate that the &lsquo;Next Big Thing&rsquo; for TikTok will be to create social networks out of companies. For example, TikTok can partner with Tesla to offer discounts to all Tesla employees who purchase products from brands on TikTok.</p><p style="text-align: justify;">TikTok can create commerce-based social networks for any company they want, and they can do so without asking permission. This means TikTok can target Google, Meta, or even Amazon associates. It will happen.</p><p style="text-align: justify;">TikTok will also create commerce networks for friends and families to use too. Watch and see.</p><p style="text-align: justify;"><span style="font-size: 10pt;"><em>This article was contributed by our expert <a href="https://www.linkedin.com/in/brittainladd/">Brittain Ladd</a>&nbsp;</em></span></p><p style="text-align: justify;">&nbsp;</p><h3 style="text-align: justify;"><span style="font-size: 18pt;">Frequently Asked Questions Answered by Brittain Ladd&nbsp;</span></h3><h2 style="text-align: justify;"><span style="font-size: 12pt;">1. How do you engage customers in TikTok?&nbsp;</span></h2><p style="text-align: justify;">You have to understand that TikTok is a platform for telling stories and not making commercials. This means creating high-quality videos that provide information about the product or service sold. Encourage consumers who view the videos to leave comments or post questions. TikTok feeds off consumer interaction, resulting in additional videos about people who have purchased the product or service and their experience.&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 12pt;">2. How does TikTok affect consumer behavior?</span>&nbsp;</h2><p style="text-align: justify;">TikTok makes it easy for consumers to scroll through different videos on TikTok and narrow down topics of interest. Once consumers find videos that interest them, TikTok makes it very easy to purchase an item or service. It's so easy that there are videos titled, 'TikTok Made Me Buy It' whereby consumers show the things they purchased.&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 12pt;">3. How can brands benefit from TikTok?&nbsp;</span></h2><p style="text-align: justify;">TikTok is the number one platform globally, even larger than Google. People globally are turning to TikTok for First Product Searches, creating a massive increase in e-commerce sales on TikTok. Brands need to ensure that they have a presence on TikTok, but more importantly, they need to make it easy for consumers to engage with them and purchase products and services. Brands that don't have a presence on TikTok are missing out on sales and growth. &nbsp;</p><p style="text-align: justify;">&nbsp;</p>
KR Expert - Brittain Ladd