[00:00:00] [SPEAKER_02]: Welcome to Unpacking the Digital Shelf, where we explore brand manufacturing in the digital age.
[00:00:15] [SPEAKER_02]: Hey everyone, Peter Grosby here from the Digital Shelf Institute. Did you know that of the users
[00:00:20] [SPEAKER_02]: who have engaged with TikTok shop, 71.2% of them have bought a product? Smells like social shopping
[00:00:29] [SPEAKER_02]: to me. Their advancements at TikTok from getting in the fulfillment game to an affiliate program
[00:00:34] [SPEAKER_02]: are driving some really impressive results with Gen Z, with acquisition costs still lower than
[00:00:39] [SPEAKER_02]: other channels. Are you playing? Should you be? What's working? What's not? Here, Lauren Levack
[00:00:46] [SPEAKER_02]: Gilbert and I interrogate Ben Rey, Chief Revenue Officer at Teikametrics to get all the answers
[00:00:52] [SPEAKER_02]: for you to refresh or create your TikTok shop strategy. Welcome to the show, Ben Rey. We
[00:00:57] [SPEAKER_02]: are so delighted to have you here. Thanks so much for coming on. Thank you. Glad to be here.
[00:01:03] [SPEAKER_02]: It seems like every day on the digital shelf there's a new shoppable channel and that's
[00:01:08] [SPEAKER_02]: of course not only retailer or branded sites popping up everywhere but social selling.
[00:01:14] [SPEAKER_02]: And since many consumers are doing discovery all the way through buying on
[00:01:21] [SPEAKER_02]: sort of anywhere they choose to be, social channels are really trying to make those
[00:01:25] [SPEAKER_02]: moments super shoppable and as kind of friction free as possible. And our listeners are always
[00:01:32] [SPEAKER_02]: trying to understand how to best support those, when to test and learn what they can drive for
[00:01:37] [SPEAKER_02]: their business. So I just love you to give a sense of how does social selling differ from
[00:01:44] [SPEAKER_02]: core retail today? And what are the challenges and opportunities for brands over there?
[00:01:51] [SPEAKER_00]: Yeah, great question. And I would say social selling as well is also
[00:01:55] [SPEAKER_00]: undergoing a pretty significant change based on the way that TikTok shops
[00:02:00] [SPEAKER_00]: is unveiling its approach to social selling. So when I think about social selling, I think
[00:02:06] [SPEAKER_00]: about similar to how you mentioned Peter with the funnels, I like to think of a couple different
[00:02:09] [SPEAKER_00]: ways to approach it. And so I think first of all these obvious social media channels,
[00:02:15] [SPEAKER_00]: things like Metta, Facebook, Instagram, Snapchat, whatever it may be. And on that channel, there's
[00:02:21] [SPEAKER_00]: a couple different ways to classify them. So the first would be an advertising channel.
[00:02:25] [SPEAKER_00]: This is where you might just see an ad to go click somewhere else or brand awareness.
[00:02:31] [SPEAKER_00]: A content channel where we're putting out owned pieces of content, a community channel,
[00:02:36] [SPEAKER_00]: think about like Reddit, where maybe you have someone who is out there as an influencer talking
[00:02:43] [SPEAKER_00]: about and engaging in the community, then you have direct influencer channel, you've actually
[00:02:47] [SPEAKER_00]: paid someone to talk on your behalf. And lastly, what I think you're getting to is the
[00:02:51] [SPEAKER_00]: shopping or commerce channel. And this is where you can actually click purchase. And so not every
[00:02:57] [SPEAKER_00]: social channel allows you to actually make the purchase. But what I would call a shopping or
[00:03:03] [SPEAKER_00]: commerce channel does. And so I think that's one thing to be distinct about the other piece
[00:03:08] [SPEAKER_00]: that I think is really important is to think about fulfillment. So where is it being
[00:03:12] [SPEAKER_00]: fulfilled? And so all this is where TikTok is distinct in that TikTok shops has its own
[00:03:21] [SPEAKER_00]: fulfillment mechanism. And so just like on Amazon or on Walmart, you have fulfilled by Amazon
[00:03:29] [SPEAKER_00]: or fulfilled by Walmart, TikTok now has the ability to be fulfilled through TikTok. So again,
[00:03:35] [SPEAKER_00]: that is a differentiator and a step forward in the world of social selling.
[00:03:39] [SPEAKER_01]: And I feel like when we the first social selling that I really kind of saw brands
[00:03:43] [SPEAKER_01]: experiment with was like the Instagram. Oh my gosh, Instagram. Wow, too many
[00:03:49] [SPEAKER_01]: Instagram shop. And that was not a fulfillment model fulfilled by Instagram. So it was really
[00:03:54] [SPEAKER_01]: challenging, right? Because especially when you have these big brands that are trying to move product
[00:03:59] [SPEAKER_01]: and they have all these distribution centers, all these different channels, creating a customized
[00:04:04] [SPEAKER_01]: experience for an Instagram campaign that maybe is not even 1% of the business that they're
[00:04:10] [SPEAKER_01]: driving was really challenging. But I feel like it's easier maybe for brands, correct me if I'm
[00:04:15] [SPEAKER_01]: wrong to get into something like a TikTok shop because they're doing the fulfillment for them.
[00:04:19] [SPEAKER_00]: Absolutely. And I think a lot of very large companies have over the last five to seven years,
[00:04:25] [SPEAKER_00]: you know, I think if we were to go back in time to Amazon, there was kind of a distinction
[00:04:28] [SPEAKER_00]: where it was like, okay, the enterprise companies, they did their own fulfilling and
[00:04:32] [SPEAKER_00]: then the small sellers were fulfilled by Amazon. And that was really the difference. And I
[00:04:36] [SPEAKER_00]: think over the past five to seven years, that isn't necessarily the case. I think these
[00:04:41] [SPEAKER_00]: large enterprises do some simple math and say, okay, you know, where is the best bang for my buck?
[00:04:46] [SPEAKER_00]: Where am I? What channel is why most are selling on? And where is it cheaper and with a better
[00:04:50] [SPEAKER_00]: profit margin to have fulfillment occur. And with a lot of larger companies going
[00:04:54] [SPEAKER_00]: to fulfillment by Amazon or fulfillment by Walmart, it makes sense they don't have to
[00:04:59] [SPEAKER_00]: have their own warehousing or not as much of it anyway. So that's an improvement
[00:05:04] [SPEAKER_00]: by TikTok shops. The other one is for these smaller sellers. So if you think about the
[00:05:10] [SPEAKER_00]: Amazon ecosystem, the reason it's so delightful is because you don't have to do anything yourself,
[00:05:17] [SPEAKER_00]: right? You just, you can be a mom and pop seller. You create your own product, you get it
[00:05:23] [SPEAKER_00]: manufactured, you don't even have to warehouse anything, you just have it shipped right from
[00:05:26] [SPEAKER_00]: the manufacturer in Amazon. Boom. And so a lot of these smaller sellers, they have a hard time
[00:05:32] [SPEAKER_00]: getting beyond Amazon, because they don't have their own fulfillment systems. And so this
[00:05:37] [SPEAKER_00]: is why Walmart has been having some success. And this is why I think TikTok is very attractive
[00:05:41] [SPEAKER_02]: for these smaller sellers as well. Yeah, they really are looking for the frictionless environment.
[00:05:50] [SPEAKER_02]: And so that they can focus on their brand, their product, their marketing within that channel,
[00:05:56] [SPEAKER_02]: but leave the sort of the details to somebody else and willing to take the,
[00:06:01] [SPEAKER_02]: you know, the cut that they have to write to do that. Yeah.
[00:06:05] [SPEAKER_00]: Yeah. And so I think that's a key part of TikTok shop strategy is one is to go out for these sellers
[00:06:10] [SPEAKER_00]: who don't have their own fulfillment centers. And I think second is to go out for the enterprises
[00:06:15] [SPEAKER_00]: who have switched over to a fulfilled by Amazon or Walmart model.
[00:06:20] [SPEAKER_01]: So Ben, for those that have not yet ventured into TikTok, TikTok shop space, tell us about it,
[00:06:26] [SPEAKER_01]: give us some numbers. What are we talking about in terms of people using it and engaging with
[00:06:30] [SPEAKER_00]: it? Yeah, absolutely. So the numbers that I have to be clear all from the end of Q1, they haven't
[00:06:35] [SPEAKER_00]: yet released their Q2 numbers. So it's a little bit outdated as this is July. I'm sharing those numbers.
[00:06:45] [SPEAKER_00]: The growth rate is pretty astounding. So it's probably going to be even more ridiculous.
[00:06:48] [SPEAKER_00]: So currently TikTok has over 1.5 billion monthly active users. So not just someone who signed
[00:06:54] [SPEAKER_00]: up once upon a time, but are using it on a monthly basis. And the expectation is that by 2026,
[00:07:01] [SPEAKER_00]: the user base will reach 2.2 billion. There is a market cap and that is the number of adults
[00:07:05] [SPEAKER_00]: on the earth, which is pretty ridiculous. Human beings on the planet.
[00:07:09] [SPEAKER_00]: Yes, exactly. But I think it's really impressive. The United States alone has over 150 million
[00:07:15] [SPEAKER_00]: active TikTok users, which if we're counting, that's about 23% of all internet users,
[00:07:21] [SPEAKER_00]: which is pretty astounding. Here's my other favorite fact is that adults,
[00:07:26] [SPEAKER_00]: US adults spend an average of 54 minutes per day on TikTok, seven days a week,
[00:07:33] [SPEAKER_00]: 54 minutes per day. A couple business stats and I'll let you guys jump in. So there's over
[00:07:38] [SPEAKER_00]: 5 million business accounts that are active on TikTok and 30% of TikTok's daily active users
[00:07:47] [SPEAKER_00]: have engaged with TikTok shop. So 30% of the 1.5 billion active users have engaged.
[00:07:56] [SPEAKER_00]: I think engaged is probably not purchased, obviously, but engaged in some way. And 71.2%
[00:08:04] [SPEAKER_00]: of TikTok shop users have made a single purchase at some time in their time on TikTok,
[00:08:12] [SPEAKER_02]: which is pretty incredible. That seems like a big no. Wow.
[00:08:16] [SPEAKER_00]: Yeah. I think some of the questions that I have about this data, what I would ask is really where
[00:08:22] [SPEAKER_00]: is the purchase happening, which I think is an interesting question. And obviously, the way it
[00:08:28] [SPEAKER_00]: started was a lot of people were advertising on TikTok before TikTok shops launched. They would
[00:08:33] [SPEAKER_00]: advertise on TikTok, but then they would find the product on their phone and their feed,
[00:08:37] [SPEAKER_00]: then they go to Amazon, they go to Walmart or Shopify and they complete the purchase.
[00:08:41] [SPEAKER_00]: And so TikTok was like, aha, here's an opportunity for us. And I don't think TikTok shops has been
[00:08:48] [SPEAKER_00]: totally successful in stopping that omnichannel or cross channel or outside of TikTok purchase.
[00:08:56] [SPEAKER_00]: So in these statistics, I'd really like to know and I don't have the data, but what percent
[00:09:00] [SPEAKER_00]: of those purchases are on TikTok shops versus actually they just found the company and that
[00:09:05] [SPEAKER_00]: they found the product and searched it on the Amazon search bar and made the purchase
[00:09:08] [SPEAKER_00]: there. That'd be interesting data set. I don't think TikTok is ever or Amazon either ever likely
[00:09:13] [SPEAKER_00]: to release that data, but interesting part of the ecosystem for sure. And what are the downsides
[00:09:20] [SPEAKER_02]: from a brand perspective of doing business this way on TikTok? Yeah, great question. So I think
[00:09:27] [SPEAKER_00]: there's a couple downsides. So one is I think we can get to this later, but the whole speculation
[00:09:31] [SPEAKER_00]: as to what is going to happen with TikTok in the future. There's that. Right. The little
[00:09:35] [SPEAKER_00]: thing, right? So yeah, my perspective on this is that TikTok user base is still growing
[00:09:44] [SPEAKER_00]: and it's not going to stop. And we're going to be tied up in the courts for a while. So I think,
[00:09:47] [SPEAKER_00]: you know, we can get to this later. But that's one challenge is if you are a brand who doesn't
[00:09:53] [SPEAKER_00]: like to take risks and you have a conservative brand, maybe you're worried that going on TikTok
[00:09:58] [SPEAKER_00]: and then it getting shut down is challenging. So I think that's one risk. I think one of
[00:10:03] [SPEAKER_00]: the other challenges of being on TikTok shops is the model in which you buy products or sell
[00:10:10] [SPEAKER_00]: products as a brand. And so I do want to take a second to explain this because it is very,
[00:10:14] [SPEAKER_00]: very unique to TikTok. So when you're on TikTok shops or TikTok in general, there's essentially
[00:10:22] [SPEAKER_00]: three ways you can think about putting out content. The first way is you can put out
[00:10:28] [SPEAKER_00]: content that you own yourself. And so you may put out a post, let's pretend you are a large brand
[00:10:34] [SPEAKER_00]: and you do an unboxing of one of your products very, very popular as a short form video on TikTok
[00:10:40] [SPEAKER_00]: or Instagram or anywhere you unbox the product to see how great it is. And then you can put
[00:10:44] [SPEAKER_00]: a link to your TikTok shops to purchase there. That's like option one, you control the whole
[00:10:49] [SPEAKER_00]: thing. Option two is you, and so that's maybe you're not even posting, you're not even doing
[00:10:53] [SPEAKER_00]: any advertisements or just pushing out on your feed. Option two is to do that same thing, but
[00:10:58] [SPEAKER_00]: with an advertisement, it'll be seen by more people and very similar to other channels.
[00:11:04] [SPEAKER_00]: The third option, which is entirely unique to TikTok shops is what's called affiliates.
[00:11:11] [SPEAKER_00]: And so in this affiliate model, what happens is a third party, someone who doesn't work for the
[00:11:17] [SPEAKER_00]: company will create their own video and post it on TikTok with a link to your shop. And so that is
[00:11:25] [SPEAKER_00]: an entirely new dynamic for TikTok shops. We have these affiliates, it's not quite an influencer
[00:11:30] [SPEAKER_00]: because you don't necessarily pick who it is. So that's an influencer and affiliate,
[00:11:35] [SPEAKER_00]: but you'd have an affiliate who would actually be selling the product on your behalf.
[00:11:39] [SPEAKER_02]: And so for TikTok to approve an affiliate,
[00:11:45] [SPEAKER_02]: what are the, what burdens do they need to meet to be an affiliate?
[00:11:51] [SPEAKER_00]: Yeah. So this is the part that is very, very different and may cause certain brands some
[00:11:58] [SPEAKER_00]: concern or some hesitation. For others who are aggressive, this is like it's great because
[00:12:03] [SPEAKER_00]: it's so quick and fast and low barrier to entry. So if you want to be an affiliate on TikTok,
[00:12:09] [SPEAKER_00]: there's basically two criteria. The easiest criteria is you are a TikTok user who has at
[00:12:14] [SPEAKER_00]: least 5,000 followers. If you have at least 5,000 followers, you can go on to your TikTok account
[00:12:20] [SPEAKER_00]: and you go to your homepage, there's a little shopping icon, you click it and it will say,
[00:12:24] [SPEAKER_00]: like, do you want to be an affiliate? You say yes, you being affiliate. And at that point,
[00:12:29] [SPEAKER_00]: what you do is you pick your, your like a category you want to sell. You have to actually
[00:12:33] [SPEAKER_00]: have the product in your house. So you probably go look through your closet or your kitchen,
[00:12:38] [SPEAKER_00]: whatever and find a product. You can find it on TikTok and you can literally create a video
[00:12:43] [SPEAKER_00]: and sell it. The other way is you can actually do it if you have zero followers,
[00:12:47] [SPEAKER_00]: which is even crazier, but if you have zero followers, you can still become an affiliate.
[00:12:51] [SPEAKER_00]: You just have to be approved by TikTok shops. Now I've never done this, but I believe the barrier
[00:12:59] [SPEAKER_00]: to entry is pretty low even if you have zero followers. But it is, it is pretty interesting
[00:13:05] [SPEAKER_01]: how that works. So then the brand doesn't have the ability to review any content that
[00:13:12] [SPEAKER_01]: that affiliate makes. So I can go buy a water bottle and then make a video and say,
[00:13:19] [SPEAKER_01]: I hate it or I love it or whatever I want. Right? Yeah, correct. So it, yes, correct. So it is,
[00:13:24] [SPEAKER_00]: it is essentially like an auction. So what you would do is if say you're a brand and you have a
[00:13:29] [SPEAKER_00]: product, let's say you make an iPhone case and you want it to be sold on TikTok shops. What
[00:13:34] [SPEAKER_00]: you would do is you'd say, I have this iPhone case and I'm willing to pay 15 to 20% based
[00:13:40] [SPEAKER_00]: on your follower account per, of commission per unit sold. And so you kind of put that out there
[00:13:48] [SPEAKER_00]: in the universe. And so anyone who's an affiliate can search for your product. And when they find
[00:13:54] [SPEAKER_00]: your product, they would then see what the commission rate is. They would do some other
[00:13:57] [SPEAKER_00]: things like what your inventory level is, number of goods sold over the past month,
[00:14:01] [SPEAKER_00]: because it is, it is a two way marketplace. So the affiliates don't want to waste their
[00:14:06] [SPEAKER_00]: time making videos for products that don't have good reviews or products that aren't moving
[00:14:12] [SPEAKER_00]: or products that have never had a video made before. They don't really want to be the first one.
[00:14:15] [SPEAKER_00]: So it is a bit of a two way marketplace. And so they're looking for that in the brands,
[00:14:21] [SPEAKER_00]: you know, someone could pick it up and, you know, a quick story is the most successful
[00:14:25] [SPEAKER_00]: video on the history of take a metrics because we have a TikTok shops offering
[00:14:29] [SPEAKER_00]: where we help find affiliates, which I'll get to as a kind of a unique differentiator for us.
[00:14:34] [SPEAKER_00]: It was someone selling a watch and the video was literally a guy holding his iPhone above
[00:14:40] [SPEAKER_00]: his watch. He had his like wrist kind of parallel to the ground and you could see his shoes
[00:14:45] [SPEAKER_00]: underneath his watch and he filmed this video and it went viral and it was the most successful
[00:14:50] [SPEAKER_00]: video in the history of TikTok shops. And it was simply because it was the way this
[00:14:55] [SPEAKER_00]: guy was talking about the watch and it was kind of like a live stream and it was stylish
[00:15:00] [SPEAKER_00]: and he's they sold it moved a ton of product and it was great. But you know, it's hard on TikTok
[00:15:05] [SPEAKER_00]: shops because you never know what video is going to be viral. Yeah. Wow. That's that's
[00:15:12] [SPEAKER_02]: fascinating and scary. So a brand can decide whether or not they want to participate in the
[00:15:17] [SPEAKER_00]: affiliate program from there. Correct. Correct. And they can pick which products are in the
[00:15:23] [SPEAKER_00]: affiliate program, etc. And so this is really where we're from our perspective at take a
[00:15:28] [SPEAKER_00]: metrics. There is some low hanging fruit for brands because it is a two way marketplace.
[00:15:35] [SPEAKER_00]: If you are a very successful influencer or affiliate and you get a lot of sales,
[00:15:41] [SPEAKER_00]: you know, you pretty much have your pick at the litter. You can choose any product you want
[00:15:45] [SPEAKER_00]: to do. And you probably think well this this company is lucky to have me as an affiliate.
[00:15:50] [SPEAKER_00]: And so what we do at take a metrics is that we actually have a matchmaking service
[00:15:55] [SPEAKER_00]: essentially where we have a whole host of influencers who are already well connected with
[00:15:59] [SPEAKER_00]: take a metrics. And these affiliates know that we only represent great products and we will
[00:16:04] [SPEAKER_00]: end so what we'll actually work on behalf of our brand customers, our sellers, we'll reach out to
[00:16:10] [SPEAKER_00]: these affiliates and say, we want to send you a sample product. We believe this is a
[00:16:15] [SPEAKER_00]: really great opportunity for you to make money. You should work with this company.
[00:16:20] [SPEAKER_00]: Or we may do research with Amazon audiences and Walmart audiences and TikTok audiences and
[00:16:26] [SPEAKER_00]: find an affiliate in that market who connects well with those that audience and connect them that way.
[00:16:32] [SPEAKER_00]: And so if you are a brand or whether smaller large and you want to get on TikTok shops,
[00:16:38] [SPEAKER_00]: this is really the barrier to entry is how do you find the right influencers and affiliates?
[00:16:44] [SPEAKER_00]: And if you can find the right ones, man, your sales can skyrocket. If you find the wrong ones,
[00:16:50] [SPEAKER_00]: you're kind of like, oh my God, I hope this video, I hope there's zero views on this thing because
[00:16:54] [SPEAKER_02]: this thing is crazy. So yeah. Sounds like a little bit of a wild west, but you're trying to make
[00:17:00] [SPEAKER_00]: it a little less wild is we're trying to yeah, we're trying to make it a little less wild and
[00:17:05] [SPEAKER_00]: really capitalize. I think the other challenge here is that, you know, these the TikTok shops
[00:17:11] [SPEAKER_00]: is really although there are obviously boomers and Gen X and millennials all ages on TikTok,
[00:17:18] [SPEAKER_00]: you know, everyone's buying things. It is really geared the medium towards Gen Z. And if you think
[00:17:25] [SPEAKER_00]: about who the decision makers are at large Fortune 500 enterprise, it is no one in Gen Z.
[00:17:31] [SPEAKER_00]: Not so much. Yes. Right. And so you have this challenge which you have, you know,
[00:17:36] [SPEAKER_00]: in every era of the people who have the budget, who are in charge of strategy are not aligned to
[00:17:43] [SPEAKER_00]: the next generation. And so you would say like this is this is total insanity. Why is someone buying
[00:17:47] [SPEAKER_00]: this watch with this video where someone in Gen Z would say, well, this was an authentic
[00:17:53] [SPEAKER_00]: articulation of the value props here. I really resonated with this and this influencer has
[00:17:59] [SPEAKER_00]: a lifestyle that I wish I had and by making this purchase, I'm aligning to their lifestyle
[00:18:03] [SPEAKER_00]: and like, you know, give me five of these. Right. And so I think that's a particular challenge as well
[00:18:08] [SPEAKER_00]: and why you need sort of an intermediary to bridge those gaps.
[00:18:14] [SPEAKER_02]: So I'd love to dig in on that then and give us an example of a brand that you think is using
[00:18:19] [SPEAKER_02]: the TikTok shop successfully. Sure. Yeah. Absolutely. And I think, you know, part
[00:18:24] [SPEAKER_00]: of the challenge here is that you have to really know what is the right medium for your brand
[00:18:29] [SPEAKER_00]: and not every category works best on TikTok shops. One of the categories that is
[00:18:38] [SPEAKER_00]: successful time and time again, is the beauty and health categories, right? Whether it's
[00:18:43] [SPEAKER_00]: supplements or whether it's makeup. So we have a particular customer who makes a variety of makeup
[00:18:48] [SPEAKER_00]: and we've been very successful with them in sort of this influencer affiliate matchmaking.
[00:18:54] [SPEAKER_00]: We also create videos as well and so we can help you with your own content also. And so for this
[00:19:01] [SPEAKER_00]: particular customer, we did both. We did some matchmaking with influencers. We also helped them
[00:19:05] [SPEAKER_00]: create and edit some of these unboxing videos that were wildly successful as they were organic
[00:19:10] [SPEAKER_00]: content. And so we saw sales go through the roof for two different types of categories,
[00:19:17] [SPEAKER_00]: which was really interesting for us. So one was a lip product, kind of like a
[00:19:22] [SPEAKER_00]: chapstick, but it had some color to it. And it was fairly cheap. It sold like three to five packs,
[00:19:28] [SPEAKER_00]: like a pretty transactional sale. And they also had a more expensive product that was related
[00:19:34] [SPEAKER_00]: to foundation and some other types of makeup. And what was so surprising to us was we had a theory
[00:19:41] [SPEAKER_00]: that the viral videos and velocity of sales would be connected to the smaller item
[00:19:47] [SPEAKER_00]: transactional sales. But it actually wasn't the case, both performed very, very well
[00:19:53] [SPEAKER_00]: and changed our perspective on what deal size, what average size, sales price, excuse me,
[00:20:00] [SPEAKER_00]: you could sell on TikTok. So for us, we found, okay, beauty, great category, and
[00:20:06] [SPEAKER_00]: the cost of the product, it doesn't matter. People will buy in TikTok either way, if they believe
[00:20:12] [SPEAKER_00]: there's high quality. The other thing we realized too was that people, while they do
[00:20:19] [SPEAKER_00]: treat it a little bit differently because there's a video and there's an affiliate and there's an
[00:20:22] [SPEAKER_00]: influencer, at the end of the day, a lot of the core e-commerce still at play
[00:20:28] [SPEAKER_00]: because there is ratings and reviews. There are listings on TikTok shops. And so you have to
[00:20:34] [SPEAKER_00]: make sure your PDP has the best content. You have to make sure it is aligned with all the standards
[00:20:41] [SPEAKER_00]: for TikTok shops. You have to make sure your pricing is competitive. You have to make sure
[00:20:45] [SPEAKER_00]: your reviews are strong. There's enough reviews. So all the basics you'd apply to any other
[00:20:49] [SPEAKER_00]: channel, you still have to apply to TikTok shops. You just also have to do the affiliate and
[00:20:55] [SPEAKER_02]: video making too. And is this profitable? Like it just seems like with all of the
[00:21:00] [SPEAKER_02]: fulfillment costs, and then you're paying the affiliate there 20%. Is it working? Is it because
[00:21:08] [SPEAKER_02]: it's so skyrocketing that it becomes profitable? How does it work from a business perspective?
[00:21:14] [SPEAKER_00]: That's a great question. So what we like to do is when we have a new customer who's on-boarding
[00:21:18] [SPEAKER_00]: with our TikTok shop services, does we encourage them to think about it in three ways? One is to
[00:21:22] [SPEAKER_00]: think about it from an omnichannel perspective. So often what you'll see is you'll see a
[00:21:27] [SPEAKER_00]: fairly significant increase in your TikTok shop sales, but you'll also simultaneously see an increase
[00:21:33] [SPEAKER_00]: in your Amazon sales. And so we encourage people to make sure that they are making notes of their
[00:21:38] [SPEAKER_00]: TikTok shop promotions of when the videos are live, of any of those types of activities,
[00:21:45] [SPEAKER_00]: and then to look omnichannel, particularly Amazon and Walmart, to make sure that they
[00:21:50] [SPEAKER_00]: are tracking increase in sales too. And so the challenging part, of course, with attribution,
[00:21:54] [SPEAKER_00]: which is the main challenge in Omni, is if you did all the things on all the channels all at the
[00:21:59] [SPEAKER_00]: same time, you're really in trouble. But if you are saying, okay, we're only going to promote
[00:22:04] [SPEAKER_00]: our TikTok shops, let's not do a promotion or increase an ad spent on Amazon, helpful for you
[00:22:09] [SPEAKER_00]: to track that. So that's one look at omnichannel results. Second is cost of acquisition. And so
[00:22:14] [SPEAKER_00]: this is particularly helpful if you have a repeat product or you have something where
[00:22:20] [SPEAKER_00]: you can subscribe to later after the first purchase. So what we are finding is that the
[00:22:24] [SPEAKER_00]: cost of acquisition through TikTok is a fairly reasonable cost because you get someone, you may
[00:22:29] [SPEAKER_00]: have them for a long time. It's less crowded. There are less sellers, there are less brands on
[00:22:35] [SPEAKER_00]: TikTok. And so you're often able to get through the noise if you have effective marketing and
[00:22:40] [SPEAKER_00]: acquire those customers at a cheaper rate because you're not paying the competitive ad
[00:22:45] [SPEAKER_00]: numbers you might be paying on an Amazon or Walmart. So that is helpful. Look at the
[00:22:50] [SPEAKER_01]: cost of acquisition. Yeah, please learn. Did you have another one? I don't want to cut you off the
[00:22:54] [SPEAKER_00]: video. The third one was simply just it was related to that was just in a smaller less
[00:22:59] [SPEAKER_00]: crowded marketplace, the CPCs, all that cost is a lot less. And so you don't have to worry.
[00:23:05] [SPEAKER_00]: It may feel like there's a lot of people getting paid but they're all getting paid
[00:23:08] [SPEAKER_00]: a smaller amount because it's a novel and new marketplace without as much competition.
[00:23:15] [SPEAKER_01]: And how do like returns and shipping work for that? And the only reason I asked that is because
[00:23:20] [SPEAKER_01]: I got a text message from a friend yesterday and she's like, I ordered these shoes on TikTok
[00:23:23] [SPEAKER_01]: and I can't return them. Do they fit you because they don't fit me? So it kind of sparked a question
[00:23:28] [SPEAKER_01]: for me like, oh, can you return it? And also how long does it take to get it because they're
[00:23:32] [SPEAKER_01]: not the Amazons of the world, right? So it's not going to be next day delivery. So can you
[00:23:37] [SPEAKER_01]: talk about that a bit from the aspect of TikTok shop? That's a great question. And this
[00:23:41] [SPEAKER_00]: is the hard part, you know, when all these consumer questions because we know, because we're
[00:23:44] [SPEAKER_00]: working in the industry, you have to ask them, well, was it fulfilled by the merchant? Was it
[00:23:47] [SPEAKER_00]: fulfilled by the marketplace? Who fulfilled it? And so that's the challenge is because
[00:23:53] [SPEAKER_00]: one of the challenges with TikTok shops is that unlike Amazon, you know, Amazon has
[00:23:58] [SPEAKER_00]: an Omni channel fulfillment so that you can have fulfilled through your e-commerce store,
[00:24:03] [SPEAKER_00]: your DTC store fulfilled by Amazon. You know, one of the challenges on TikTok is they
[00:24:07] [SPEAKER_00]: have that Omni channel yet. And so if you put something into the TikTok warehouse, it can only
[00:24:14] [SPEAKER_00]: be fulfilled through TikTok shops. And so a lot of brands, merchants, whatever you want to call them
[00:24:21] [SPEAKER_00]: are hesitant to put products into TikTok shops because they're like, well, the only thing can
[00:24:24] [SPEAKER_00]: get it out is if it's I actually sell it on TikTok. And so because of that, they'll often
[00:24:29] [SPEAKER_00]: choose the fulfilled by merchant category, which is through often Shopify or, you know,
[00:24:35] [SPEAKER_00]: you can kind of pick, you know, TikTok shops sports a whole host of fulfillment options.
[00:24:39] [SPEAKER_00]: And so one is fulfilled by that third party, not TikTok shops. That's Lauren to your point where
[00:24:45] [SPEAKER_00]: you start to get some of these challenges around well, how long did it take to arrive at my house
[00:24:48] [SPEAKER_00]: and what's the return policy? And so TikTok shops is aware of that, which is why they have
[00:24:54] [SPEAKER_00]: the fulfillment piece. So they're trying to have this very similar to Amazon and Walmart
[00:24:58] [SPEAKER_00]: distributed warehousing all around the country. We can get it very quickly.
[00:25:02] [SPEAKER_00]: So their goal, I know their goal is to be at the same speed and the same efficiency as Amazon.
[00:25:09] [SPEAKER_00]: They just need to get more momentum there. I know maybe not this year, someday,
[00:25:13] [SPEAKER_00]: they just need to get more momentum there. And I would not be surprised. It's not an
[00:25:16] [SPEAKER_00]: official prediction. I don't have anything from TikTok shops, but I wouldn't be surprised if
[00:25:21] [SPEAKER_00]: they down the road offer an ability to also fulfill Omni channel just like Amazon does.
[00:25:26] [SPEAKER_01]: That is a lofty goal to be like Amazon.
[00:25:30] [SPEAKER_02]: But I think the critical question is here, Lauren, could you use the shoes?
[00:25:35] [SPEAKER_01]: Oh, I don't know yet. She's going to bring them to me later this week. I was like,
[00:25:38] [SPEAKER_01]: they look great. I'll try them on. Why not?
[00:25:43] [SPEAKER_02]: I can't let a story go. What's I hear? Absolutely. We'll need a follow up pick.
[00:25:48] [SPEAKER_02]: I know exactly. Yeah, we'll have to post that. They were a viral sneaker that she's like,
[00:25:53] [SPEAKER_01]: I wanted to get on board and I bought them and they don't fit. So I'll let you know.
[00:25:57] [SPEAKER_01]: Please. Yeah. So, Ben, can we crystal ball for a second? Because I know you have a prediction
[00:26:03] [SPEAKER_01]: around the future of TikTok. We hinted about it a bit in the beginning, but
[00:26:08] [SPEAKER_01]: ban no ban. What's going to happen? What's the future? Brands are really trying to get a sense
[00:26:14] [SPEAKER_01]: of this, right? Because they have limited resources, limited dollars. Like should they
[00:26:18] [SPEAKER_01]: spend their time on it if it's going to go away? What are your thoughts?
[00:26:21] [SPEAKER_00]: I'll crystal ball on whether it's going to go away or not. What I think future is that I do
[00:26:25] [SPEAKER_00]: have some thoughts as to what brands should do immediately on TikTok. So I think crystal ball,
[00:26:30] [SPEAKER_00]: it's going to wind its way through the courts in a very prolonged court case, right? TikTok,
[00:26:36] [SPEAKER_00]: Bike Dance has a ton of money. They're going to deploy it. This is a major market for them.
[00:26:41] [SPEAKER_00]: They put a lot of effort into the US market and so this thing's not going to go quick. It's
[00:26:46] [SPEAKER_00]: going to go through many iterations. I think it will likely end up in the Supreme Court
[00:26:51] [SPEAKER_00]: where it will be a question of constitutionality, free speech, all these different things. So I
[00:26:58] [SPEAKER_00]: think that's going to be interesting to see. Also who knows the makeup of the Supreme Court
[00:27:01] [SPEAKER_00]: could change by the time it gets there. Thousand and one things could happen, right? So who knows?
[00:27:07] [SPEAKER_00]: I'm not going to get into those details. That's a different podcast. I have thoughts, but go ahead.
[00:27:14] [SPEAKER_00]: So I think that part's going to take a long time. A, B is I do know that TikTok has been working on
[00:27:22] [SPEAKER_00]: a sanitized algorithm that is a US algorithm only. And so I think they may argue that.
[00:27:29] [SPEAKER_00]: And if that is unsuccessful, I don't think an acquisition by a large player is outside of
[00:27:36] [SPEAKER_00]: the realm of possibility. And so when we get into those conversations, there's essentially
[00:27:41] [SPEAKER_00]: two possibilities out there. So one is a very large tech company who plays somewhere in commerce,
[00:27:48] [SPEAKER_00]: can make an acquisition. I know that there's like an Oracle or a Salesforce-like company
[00:27:54] [SPEAKER_00]: technically has, because a lot of this is like, do you have the cash to do it? Right? It's a very
[00:27:58] [SPEAKER_00]: expensive purchase. So a company like that technically as the cash to do it, they do
[00:28:03] [SPEAKER_00]: have some commerce business on the back end. So there could be something interesting there.
[00:28:07] [SPEAKER_00]: I think the more interesting option could be an Amazon or a Walmart, particularly Walmart,
[00:28:13] [SPEAKER_00]: because Amazon has its own kind of social shop, social shopping embedded within the dot com.
[00:28:20] [SPEAKER_00]: Walmart doesn't today. They don't have any sort of social shopping. And we know that they are
[00:28:25] [SPEAKER_00]: going as aggressively as they can with their loads and loads of revenue after Amazon.
[00:28:32] [SPEAKER_00]: And so this could be a very interesting move for Walmart to try and beat Amazon in its own game.
[00:28:40] [SPEAKER_00]: But that would be extremely expensive. There would be all sorts of anti-regulation laws
[00:28:46] [SPEAKER_00]: and monopoly and all that kind of stuff. So I really think the options are pretty broad.
[00:28:51] [SPEAKER_00]: I don't think TikTok's going away either in its current form in a future form.
[00:28:55] [SPEAKER_00]: I just think we'll probably have to wait two to three years to see what that is going to
[00:28:59] [SPEAKER_01]: look like. Well, we'll have you back. Yes. We can look at the crystal ball and see if you
[00:29:05] [SPEAKER_02]: were right in your prediction slot in the three year there you go.
[00:29:09] [SPEAKER_01]: Cast recording right now. But then you also tease like there's a few things that you
[00:29:14] [SPEAKER_01]: think brands should be doing right now. So what are what are those things?
[00:29:17] [SPEAKER_00]: Yes. So I think my perspective is brands should go where the consumers are.
[00:29:23] [SPEAKER_00]: Right. That's absolutely what they should do. And brand loyalty is big. I think the pandemic
[00:29:28] [SPEAKER_00]: taught us a lot about brand loyalty. People were fiercely loyal until it was too expensive,
[00:29:33] [SPEAKER_00]: then they switched pretty quickly. And so I think if you get a consumer young and you get them
[00:29:39] [SPEAKER_00]: loyal all these studies have shown that there's a good chance that they'll become a lifelong
[00:29:44] [SPEAKER_00]: purchaser. I purchased the same toilet paper and paper towel brand for decades.
[00:29:49] [SPEAKER_00]: And so with the fact that you have all these Gen Z consumers and consumers of all ages
[00:29:56] [SPEAKER_00]: on on TikTok for you to not be doing anything on TikTok, I think is a huge miss,
[00:30:01] [SPEAKER_00]: whether it's advertisement or whether it's TikTok shops. I think that's a huge miss.
[00:30:05] [SPEAKER_00]: So I definitely feel like everyone should be examining, you know, is there a part of my
[00:30:10] [SPEAKER_00]: consumer basis on TikTok? The answer is yes. What can I be doing on TikTok? Second is I
[00:30:16] [SPEAKER_00]: don't think you should go at it alone because it is so new. It is very unique in that it
[00:30:23] [SPEAKER_00]: takes all the components of social. It also adds a commerce portion. And so you can't do this by
[00:30:29] [SPEAKER_00]: yourself. There's a few different options out there. Obviously, take a matrix is one of them.
[00:30:33] [SPEAKER_00]: But I think to try and do it by yourself would be very challenging. And second or third, I should
[00:30:38] [SPEAKER_00]: say is test and learn absolutely test and learn. You don't have to do your entire catalog.
[00:30:44] [SPEAKER_00]: You don't have to do a little bit large budget. But I don't think there's any reason that you
[00:30:49] [SPEAKER_00]: should resist a test and learn phase in 2024 on TikTok shops. Ben, earlier you were talking about
[00:30:59] [SPEAKER_02]: the categories and maybe even the price points that work on TikTok. Is there some guy in
[00:31:06] [SPEAKER_02]: Sorrent? Because you said if your consumers go there, but is it sort of that simple? In other
[00:31:12] [SPEAKER_02]: words, if you have consumers that are Gen Z and they're buying your product somewhere else,
[00:31:17] [SPEAKER_02]: then they should buy them on TikTok as well. So that's an easy decision.
[00:31:24] [SPEAKER_02]: Are people selling large furniture on TikTok? What are the categories that
[00:31:32] [SPEAKER_02]: are either a non-starter or sort of must-dos? Yeah, great question. So the interesting
[00:31:36] [SPEAKER_00]: about TikTok in general is it does cut across all the demographics, particularly the income
[00:31:42] [SPEAKER_00]: demographics. And so there are some other channels you may think, oh, well this is really for a price
[00:31:48] [SPEAKER_00]: conscious shopper. Like that's not the case for TikTok. There isn't necessarily exclusive to
[00:31:53] [SPEAKER_00]: a price conscious shopper. And I bring that up because a product like Solosto performs quite
[00:31:57] [SPEAKER_00]: well on TikTok shops. It is fairly expensive, but it also is more of a like, hey, this thing's
[00:32:02] [SPEAKER_00]: really cool all out. Now I see a video. I didn't realize how cool it is. I'm going to make
[00:32:06] [SPEAKER_00]: this purchase something that is maybe a little less research kind of spontaneous, but you have
[00:32:11] [SPEAKER_00]: to obviously be in a certain income bracket for Solosto to be a more spontaneous purchase.
[00:32:17] [SPEAKER_00]: But that is an example of something that performs well. So I would say that the criteria is if it
[00:32:23] [SPEAKER_00]: is able to be a spontaneous purchase, that's a huge plus. So any kind of purchases like that,
[00:32:30] [SPEAKER_00]: great. The second one is visually appealing. It is a visual video platform. And so if it
[00:32:37] [SPEAKER_00]: is visually appealing, that's another one. And then third is if it would resonate with the Gen Z
[00:32:45] [SPEAKER_00]: audience, that is also a huge plus. So that's kind of my criteria. And this be a spontaneous
[00:32:52] [SPEAKER_00]: purchase. Is it going to be visually appealing? And is it going to be attractive to a Gen Z
[00:32:58] [SPEAKER_00]: audience? I think something like a shelf stable food or something that you use every day like
[00:33:04] [SPEAKER_00]: toothpaste, probably not your best bet. Unless of course the exception is we don't know how these
[00:33:10] [SPEAKER_00]: viral trends work. I could wake up tomorrow and some sort of random toothpaste brand can be the
[00:33:17] [SPEAKER_00]: hottest thing in the planet. That's the case get on it. But other than that, those are my three
[00:33:22] [SPEAKER_02]: criteria. Those are very helpful criteria. Thank you. So your website has a ton of great content
[00:33:32] [SPEAKER_02]: on it around this. I'll just tell my folks, my listeners that they should go to
[00:33:40] [SPEAKER_02]: take a metrics that's teika metrics.com slash ebooks and you have a lot of and particularly
[00:33:49] [SPEAKER_02]: you across a bunch of channels but certainly the the TikTok stuff, a lot of it's near the top. Is
[00:33:56] [SPEAKER_00]: that a fair way of putting it? Yeah, exactly. So we have an ebook that we put out in July,
[00:34:02] [SPEAKER_00]: so earlier this month called How to Attract A Billion Plus Shoppers on TikTok. It even covers
[00:34:07] [SPEAKER_00]: one of the questions and it says I've heard TikTok is getting banned. What should I do? And so we
[00:34:13] [SPEAKER_00]: try and cover all the top questions you may have. This is especially great if you work inside a
[00:34:17] [SPEAKER_00]: company and your boss or someone has said, Hey, what's the strategy for TikTok? Give me
[00:34:21] [SPEAKER_00]: it. Like, how do I think about this? And you have to come up with something like this is a great
[00:34:26] [SPEAKER_00]: ebook to cover all those different questions. That's the first one. The second one is some of our top
[00:34:35] [SPEAKER_00]: downloaded content is our different benchmark reports. And so these benchmark across categories,
[00:34:41] [SPEAKER_00]: toys and games, baby products, sports and outdoors. And these typically benchmarked primarily
[00:34:45] [SPEAKER_00]: in Amazon and Walmart. We look at ROAS benchmarks, CPC benchmarks, a lot of ads
[00:34:52] [SPEAKER_00]: and ad metrics benchmarks. Those are really popular. The last thing I would say that's a great
[00:34:58] [SPEAKER_00]: resource is so we have a podcast called Human the Loop, which Lauren has been a guest on.
[00:35:03] [SPEAKER_00]: And on this Human the Loop podcast, we had an episode that ran back in March called the
[00:35:08] [SPEAKER_00]: Sud Scrub Sensation. And it's about two guys who have a shower product and their product
[00:35:14] [SPEAKER_00]: when viral on TikTok and what that meant as it upended their world in a great way,
[00:35:19] [SPEAKER_00]: in a crazy way. But what a viral video on TikTok means for their business and their lives.
[00:35:24] [SPEAKER_00]: So that's a great episode to listen to as well. Well, I heard this podcast thing is going to
[00:35:29] [SPEAKER_02]: take off so good for you for being a first mover there. Absolutely. Ben, thank you so much
[00:35:36] [SPEAKER_02]: for bringing all this brilliant stuff to us in social shopping. It feels kind of like
[00:35:45] [SPEAKER_02]: over the last years we've been doing this podcast and been in the business.
[00:35:49] [SPEAKER_02]: There's been like three or four false starts on social selling, and it feels like finally all
[00:35:55] [SPEAKER_02]: the pieces are coming into place to make it something that is more transparent, enjoyable,
[00:36:02] [SPEAKER_02]: and it sounds like hopefully profitable for the brands as well, that makes it an exciting
[00:36:08] [SPEAKER_02]: time to be getting your toes or entire body in there. Absolutely. I think TikTok has
[00:36:17] [SPEAKER_00]: cracked the code on social commerce. I'm excited to see where it goes. The last offer I did want
[00:36:23] [SPEAKER_00]: to say too is I'd be willing any of your listeners if they want to learn more. I would
[00:36:27] [SPEAKER_00]: be happy to have a conversation with them. They can reach out to me on LinkedIn and I'd be
[00:36:31] [SPEAKER_00]: happy to say like no pressure. We're not selling you anything. Let's just talk shop about TikTok
[00:36:36] [SPEAKER_00]: and see if it could be helpful to you. I'd like to offer that to your listeners too.
[00:36:40] [SPEAKER_00]: But thank you both Peter, Lauren, thank you for having me on. It's been really great.
[00:36:44] [SPEAKER_02]: Oh, pleasure. Thank you. Thanks again to Ben for all the data and the directives.
[00:36:49] [SPEAKER_02]: We have all the links to his research in the show notes or head over to their resources
[00:36:52] [SPEAKER_02]: section for all the eBooks at takometrics.com. Thanks for being part of our community.