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.

What is social commerce?

As social media platforms jockey for consumers' attention, the lines between true social commerce and e-commerce can be blurry. For some, social commerce is not separate from e-commerce, especially as platforms stretch to be more than just photo-sharing or Tweets.

“Social commerce is simply e-commerce driven by social media interaction and engagement,” Jessica Phillips, founder of The Social Standard, an influencer marketing agency, said via email. “Those lines are getting more and more blurred. Social media isn't even really social media anymore. Instead it's e-commerce, discovery, social, photo, video and entertainment. All of those verticals used to be separate marketing categories, but they are quickly merging into one. While this Shopify partnership is simply setting up a storefront on TikTok for the brand or creator, it is leveraging social engagement on the platform to drive purchase.”

It doesn't appear like that engagement will wane. Retail social commerce is already a multibillion dollar industry in the U.S., generating $26.97 billion in sales in 2020, according to a report by eMarketer. It’s estimated that U.S. retail social commerce will more than double by 2023, soaring to $56.17 billion.

For others, like Alessandro Bogliari, co-founder and CEO of The Influencer Marketing Factory, social commerce means that customers can discover, shop, and purchase products without leaving the app or being redirected to a retailer website. He points to Instagram Checkout as an example.

“Even with the shopping tabs, customers have to complete the purchase in an embedded browser,” Bolgiari says of the latest Shopify integration with TikTok. “It’s a good starting point, but it’s still e-commerce, not solid social commerce.”

For its part, Instagram checkout hasn’t gained much traction. 

“Instagram Checkout is flawed because there has been a disconnect between Instagram’s customer support and the brands who end up selling and fulfilling the orders,” says Dan Brewster, senior VP of marketing at Scalefast, an e-commerce platform. “A return on an order through Instagram Checkout is usually a bumpy process for both the customer and the merchant.”

Work for it

One of the most important metrics brands want to see on TikTok before investing more resources is user adoption of the new feature, according to Jones. TikTok’s platform voice is very specific, and authentic content often performs the best.

“One of our best TikToks was one I posted on a Friday night,” recalls Poppi’s Ellsworth. “I was very casual, you know in that TikTok style, and just filmed a bit about how the brand got started, and our Shark Tank deal.” 

The post got 14 million views, and Ellsworth said Poppi did $100,000 in Amazon sales over that weekend.

There’s also the risk that pushing product can turn off potential customers. “It really comes down to user intent,” says Brewster. “The challenge with social commerce was always that users are in ‘social mode,’ so they don’t want to shop. Through seemingly brute force, users are more accepting of being pitched while on social channels.”

For now, many marketing experts believe more brands are about to start experimenting and increase budgets around TikTok. Some also predict that for creators, these types of partnership will help them promote their own merchandise on TikTok. 

“It’s a smart integration and shows that they want to push in that direction,” says Mae Karwowski, founder and CEO of Obviously, an influencer marketing agency. “It's a big first step toward true social commerce.”