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The Rise Of Social Commerce, TikTok Shopping, And User Generated Content

March 12, 2022

There couldn’t be a better time to be in the business of advertising, it’s been a bumper year. According to the WARC, the global ad market saw record growth in 2021. Advertising investment rose by 23.8% to a total of $771 billion, and growth is expected to continue on to top $1 trillion by 2025. All product sectors are forecast to top pre-covid investment this year. Out of all digital platforms, can you guess which tops the list for planned budget growth? TikTok. 66% of marketers surveyed plan on increasing ad budget spend on TikTok.

What is social commerce?

It’s the process of selling a product directly through social media. The entire shopping experience, from discovery, to research, to purchase all takes place within the social media platform. How is this different from e-commerce? E-commerce is shopping through a dedicated website or branded app. Social commerce makes the buying experience frictionless and removes time-consuming steps, meaning your audience is more likely to convert due to fewer touchpoints on their buying journey. If you see a product you like on an app you are using, now you won't have to go to Google and search for the product, you can just buy in-app.

Shopping can now be a social experience

Boundaries between community, shopping, and entertainment are blurring meaning that if done right, your brand can fit seamlessly into that experience. Social commerce is in a fast-moving test-and-learn phase for brands as well as platforms and the ones who experiment are reaping the rewards.

According to Statista, forecast social commerce growth is exponential. Revenue from social commerce in 2021 sat at around $585 billion globally.

Let’s take a look to the future.

The forecast for 2028 is $3.37 trillion. Let that sink in a second. There is money to be made and that money is in social commerce.

Consumer mindsets

For years, marketers have used age as a key demographic for targeting ads, attributing specific traits and behaviours to these age groups when realistically, the behaviours allocated could apply to anyone of any age. We are seeing a shift away from this thinking and instead, marketers are looking at consumer mindsets. Mindsets provide a deeper level of understanding in an environment where consumer behaviour can change rapidly.

Following this realisation, TikTok conducted research in partnership with Clear M&C Saatchi to gain a better understanding of the motivations for people opening apps such as TikTok, Snapchat, Instagram, and YouTube. The research found that people tend to use different apps for different reasons. Ranging from mood, hobbies, participation, escapism, and expression.

When looking specifically at TikTok, research shows that 4 specific mindsets set the platform apart from others. Let’s take a look into these mindsets.

1. Entertain me

According to research, 75% of people come to TikTok to be entertained. It’s a fun platform, there is an abundance of entertaining, funny content and creators on the app. According to Statista, Entertainment is the most viewed hashtag category on the platform with video views within the hashtag group hitting at least 535 billion as of July 2020, meaning that count will be much higher now. People with this mindset tend to be open-minded about the types of content they want to see.

nirvana entertain us

2.Uplift

People who hold the uplift mindset want to switch off from what’s going on in their lives. They want happy, relaxing, and satisfying content, rather than news or updates of what is going on in the world. This is the mindset I see myself falling into. It’s incredibly easy to switch off to the world enjoy some light-hearted content, at least for a while.

3. Discover

The discover mindset is for people who have an enthusiasm for stumbling upon something new and interesting. TikTok is great for this. I couldn’t put a number on the amount of times I’ve stumbled across someone killing it within their niche and got slightly obsessed. Francis Bourgeois comes to mind. It’s a testament to the creators on the platform who make something you might have never thought you would be interested in, interesting. If you are authentically passionate about something, it’s an endearing trait that engages and entertains an audience, making them more receptive to your overall message.

4. Participate

People with the participate mindset want to share with others as well as be part of and participate in a community. They are positive and open-minded. Further research finds that 83% of people with this mindset are much more likely to respond to branded content on TikTok, compared to an average of 59% on average across other platforms.

What does this mean?

It indicates that defining mindsets and targeting these rather than demographics would lead to a deeper understanding of your audience as well as much more meaningful interaction with your content. Birth year alone cannot define a person, it’s important to look deeper. Despite what people may say about TikTok, with preconceptions of it being a younger individual's app. In reality, it holds multigenerational appeal for audiences globally.

Understanding these mindsets allows you to create platform-specific content which you know customers will engage with and as a result, take action.

TikTok Shop and live video shopping

Doubt has been cast on whether the customer journey could be considered linear anymore. With the rise of social commerce, the discovery, research, and purchase phase can now all happen at the same time. TikTok noticed these trends and acted upon it, with the introduction of TikTok shop which gives the TikTok community the ability to purchase directly through videos in feed, on live-stream, as well as on product showcase tabs featured on TikTok profile pages.

All brands that are utilising TikTok shopping features should look into using creators to promote their products. Creators are what make TikTok the platform what it is at the moment. They hold a high level of understanding and know what makes their audience tick, so, in turn, will create content authentically that they know will appeal to their audience, leading to engagement as well conversations started around your product or brand.

There's that keyword - ‘authentic’. Authenticity is key on TikTok. According to Mintel, content from creators not being believable risks annoying customers and damaging brand sentiment. Consumers are more likely to be aware inauthenticity, as well as being put off by it. Brands need to make sure that they are collaborating with creators who align with their brand's core values and that they are believable users of the product or service they are promoting. 19% of people who frequently view creator/influencer content have gone on to buy the product or service being advertised, around 1 in 5 people ins’t bad! Having said this, the figure is actually likely to be higher, as some people won’t have even realised all the factors that led to them buying or on the other hand, may be reluctant to admit that they had purchased due to creator/influencer promotion. A key way of appearing authentic on the platform is by creating organic-looking, UGC-style content.

What is UGC-style content?

It stands for ‘User Generated Content’. It’s original, brand-specific content created by customers, usually posted to a social network. Stackla states, 90% of consumers say that authenticity is important when deciding what brands to support. And guess what 60% of consumers think is the most authentic style of content? UGC.

UGC-style content is content made by creators in collaboration with brands on TikTok that resembles UGC content. Because creators understand their audiences so well, they can create content that they know audiences will stick around to watch. The audience seeing someone they can see themselves in, rather than just a business, builds trust and leads to more positive sentiment towards the product that is being advertised. Some examples of UGC-style content that are working well at the moment are ‘Us vs them’ videos - comparing the product to a competitor. Unboxing videos. Behind the scenes content.

Making content that doesn’t look like an ad, but instead feels like an organic piece of content is key to keeping eyes on the screen. When people feel like they are being advertised towards, it can put them off. Ads that aren’t engaging, entertaining, or informative will not connect with modern buyers. You need to work out a messaging framework for your brand, made up of keywords that illustrate who you are, what you stand for, and how you want to be perceived. Once you have this established you need to utlise creative methods of brand storytelling in the content that you push out. If done right, brand storytelling creates a strong connection with your target audience. Strong connections result in higher brand trust, loyalty, and sentiment. 3 key ingredients in a recipe for success.

“Don’t make ads, make TikToks”

Want to find out more about how your brand can utilise TikTok shopping? Book in a discovery call now here.

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