Social commerce is quickly becoming the holy grail of marketing. But even as TikTok and other social platforms rapidly evolve to become shopping destinations, most retailers may still want purchases to ultimately take place on their own websites.
TikTok announced earlier this month that it struck a deal with Shopify that will allow for in-app shopping.
Long term, becoming a full-funnel purchase route will be a challenge for platforms. Most retailers want purchases to go through their website as a way to capture customer data, like emails, while at the same time the platforms are eager to prove they can directly drive conversions to be more appealing to advertisers.
“Based on our digital work with brands today, we’re seeing lower conversion rates for social commerce channels like Facebook and Instagram, compared to websites that provide a full e-commerce experience,” Megan Jones, VP of marketing and partner at January Digital, a social media consulting company, wrote in an email. “While all signs point to social commerce as the future, shopper adoption rate isn’t there quite yet. But since TikTok isn’t creating a completely new checkout environment, TikTok could be onto something.”
Last year, TikTok accounted for 1% of all e-commerce traffic. This year, it’s up to 10%, according to the MikMak Shopping Index, a collection of key eCommerce KPIs collected across hundreds of brands and 250-plus channels and retailer integrations. For context, the same index found that Pinterest accounted for 16% of e-commerce traffic last year, and this year has dropped to 9%.
“We are seeing 36% higher conversions on TikTok this year over the other platforms,” says Rachel Tipograph, founder and CEO of MikMak. But she cautions that the social platforms are just a piece of that final purchase.
“Discovery is a big part of the customer journey, and the social channels are where that discovery is happening,” Tipograph explains. “But consumers who ‘discover’ a product on TikTok, they don’t care where that final checkout happens, be it Amazon, or a mom-and-pop Shopify store.”
Poppi, a prebiotic soda company, has seen this with their own e-commerce efforts. The brand uses Amazon to fulfill all their online orders (products are also sold in grocery stores). Their TikTok page links out to their website, where customers can finish checking out on Amazon, while their Instagram Shop links directly to Amazon.
“The social channels are just ways to reach customers where they already are and help customers finish checkout on a site they’re familiar with,” says Allison Ellsworth, founder and CEO, Poppi.
If TikTok’s sister app, China’s Douyin, is any indication, TikTok social shopping could be a boon. Last year, Douyin recorded $15 billion in gross merchandise value from it’s own e-commerce platforms, according to CNBC.