One of the byproducts of the rise of social media is the popularity of social commerce, aka, social shopping, in which people shop on social apps such as Facebook and TikTok. In the United States, social commerce sales are projected to account for 6.6% of total eCommerce sales. The value of social commerce in the U.S. is expected to reach nearly $80 billion by 2025 ($700 billion globally).
A recent announcement between TikTok and Amazon underlines the influence of social commerce as well as opportunities for advertisers. According to TikTok, users will be able to discover and purchase products directly from Amazon without leaving the TikTok environment. Users will see Amazon product recommendations in their “For You” feed. They can link their TikTok and Amazon accounts through a secure, one-time setup. Once linked, users can complete their purchases within TikTok, accessing real-time pricing, Prime eligibility, delivery estimates, and product details.
Big For Social Commerce
The growth of social commerce depends on a seamless and frictionless shopping experience. When users need to perform too many clicks and jump across multiple platforms to browse and shop, they are less likely to make a purchase. Social media platforms like Facebook, Instagram, TikTok, and YouTube have integrated shopping features that allow users to browse and purchase products directly within the apps. Facebook leads with an expected 64.6 million social commerce buyers in 2024, followed by Instagram with 46.8 million buyers.
Despite its growth, challenges remain, such as consumer concerns about data privacy and the preference of younger consumers to shop through established retailers. On the other hand, Gen Z is more likely than any other generation to purchase a product after watching a review from an influencer they follow (per November 2022 data from Deloitte), and TikTok is known to be highly influential.
Mixed Results for Commerce on TikTok
As an eCommerce platform, TikTok has achieved mixed results. With its strong appeal among Gen Z, TikTok’s user base (which surpassed 100 million in the United States in 2024, reaching 112.4 million according to eMarketer’s May 2024 forecast) positions it as a strong player in social commerce. eMarketer anticipates TikTok will grow to 117.9 million users by 2025. In 2024, 35.8 million of those users were social buyers. During that period, TikTok attracted more shoppers (11.6 million) than the combined net increase of Facebook, Instagram, and Pinterest (6.4 million). eMarketer projects TikTok will continue to attract social buyers in 2024, reaching 40.7 million—far surpassing Instagram’s 5.9% growth and nearly five times the social buyer growth rate of Facebook.
But TikTok also experiences its share of challenges, including a potential ban in the United States and complaints about the sale of counterfeit goods and poor shipping experiences on TikTok Shop. The ability to purchase directly from Amazon within TikTok should ally concerns about the reliability of the sales experience on TikTok although the larger question of TikTok’s future in the United States remains unresolved.
Why The Deal Matters to Amazon and Its Advertisers
For Amazon, this partnership is part of a broader strategy to expand its presence across various social media platforms, including Meta and Snapchat. A few months back, Amazon partnered with Pinterest, Meta, and Snapchat similar to its relationship with TikTok. This positions Amazon to better compete in the evolving social commerce landscape and maintain its dominance among younger consumers.
The integration allows brands to run Amazon ads directly on TikTok, providing full attribution and potentially increasing the effectiveness of advertising campaigns. This could lead to new opportunities for brands to reach and engage with their target audiences more effectively. Brands will most certainly be able to use Sponsored Display and DSP ads to run Amazon ads on TikTok and get full attribution when users have their accounts connected.
Industry experts anticipate this partnership will significantly affect advertisers’ budget allocation and traffic strategies. It’s expected to open up high-conversion social commerce tactics for Amazon through paid social advertising.
Additionally, the potential ability to track purchases within platforms like TikTok may offer brands additional insights to better target their audiences. Brands heavily invested in Amazon might consolidate their efforts further, particularly those with lower conversion rates and sales volumes on their own websites. Brands currently relying on driving traffic through CPC campaigns may want to explore sales conversion campaigns to boost conversions.
Lastly, brands selling on multiple platforms beyond Amazon will need to carefully balance supporting Amazon through this partnership, gathering first-party data from their own websites, and fulfilling sales targets with other retail partners.
Caveats for Social Commerce
While integrating shopping directly into TikTok seems promising, it’s not universally embraced as a game-changer for online shopping. Some experts believe that, despite the convenience, consumers will continue to rely on Amazon’s platform for detailed product research and price comparisons before committing to a purchase.
TikTok users’ mixed reactions to existing ads and shopping content also raise doubts about the new feature’s reception. Practical concerns, such as shared Amazon accounts and the potential inconvenience of managing multiple payment and shipping options within TikTok, further challenge the perceived ease of the integration. These factors suggest that the actual convenience of in-app shopping might not live up to the hype.
Recommendations for Advertisers
The relationship between Amazon and TikTok opens up new opportunities for advertisers who proceed thoughtfully. Some tips for capitalizing on the new experience include:
Capitalize on Full Attribution Capabilities
Advertisers should take full advantage of the attribution capabilities offered by the TikTok-Amazon integration. By running Amazon ads directly on TikTok, brands can better track the customer journey from discovery to purchase, enabling more precise measurement of ad effectiveness. This data can be used to refine targeting strategies and improve return on ad spend (ROAS).
Experiment with Sponsored Display and DSP Ads
The ability to use Amazon’s Sponsored Display and Demand-Side Platform (DSP) ads on TikTok presents a unique opportunity to reach engaged audiences. Brands should experiment with these ad formats, focusing on creative strategies that resonate with TikTok’s younger demographic. Consider incorporating TikTok trends and influencer partnerships to enhance ad relevance and engagement.
Optimize Content for Social Commerce
Given TikTok’s highly visual and interactive environment, brands should focus on creating compelling, shoppable content that blends seamlessly with the platform’s native experience. Short-form videos, influencer collaborations, and user-generated content should be central to your strategy, encouraging users to make impulse purchases directly within the app.
Balance Multi-Platform Strategies
Brands that sell on multiple platforms need to carefully balance their presence on Amazon with their direct-to-consumer (DTC) efforts. While the TikTok-Amazon integration offers a new avenue for reaching consumers, it’s crucial to maintain and nurture first-party data through your own channels. Consider how this partnership fits into your broader retail and data strategy.
Monitor Consumer Sentiment
Despite the potential of this partnership, it’s important to monitor consumer reactions closely. As noted, TikTok users may have mixed feelings about in-app shopping, so advertisers should be prepared to adapt their strategies based on real-time feedback. Stay attuned to discussions on the platform and be ready to pivot if user sentiment turns negative.
Address Practical Concerns
Practical issues such as shared Amazon accounts and multiple payment options within TikTok could pose challenges. Advertisers should provide clear guidance and customer support to alleviate potential friction points. Consider addressing these concerns in your marketing communications to build trust and reduce barriers to purchase.
True Interactive can help you succeed with social commerce and advertising. Learn more about our capabilities on our website.
