Is TikTok Retail's Next Big Gen Z Acquisition Channel?
TikTok (previously known as Musical.ly) is one of the fastest growing social media platforms in the world, with over 800 million active users worldwide, and over 1.5 billion downloads on the App Store and Google Play. The popular app allows users to record and edit 15 second videos, adding music, filters, and other features.
TikTok was popular well before COVID-19, but the pandemic has led to increases in app downloads, usage, and revenue. TikTok’s gross US revenue (user spending) for the week commencing March 16 of 2020 was $1.1 million – up 34% on the previous week’s gross revenue of $822,000.
Since mid-March, COVID-19 has forced businesses to quickly adapt to disrupted supply chains, temporary closures of brick and mortar shops, and shifting operations to work from home, among other challenges. It’s clear that marketing strategies need to shift in light of the current healthcare crisis as well. And that’s not just because business operations have changed, it’s because shopping, media consumption habits, and consumer values have changed, too.
And this is why the increased popularity of TikTok is so important to note. Before Coronavirus, brands were already beginning to recognize the value of TikTok as a customer acquisition method. Now, as brands re-work their marketing plans, it’s the perfect moment to consider how TikTok could factor into them.
With the app seeing such high rates of engagement, creating a brand presence on TikTok is an opportunity to engage your audience, build community, and add a new acquisition strategy that has the potential to perform both during and after COVID-19.
What is TikTok, and how does it work?
TikTok is a platform for sharing short form videos that are created using the app’s multitude of editing tools. It tends to be known as a “lip-syncing” app, which makes it sound like it’s an online karaoke experience. While many users share lip-syncing videos on the app, the content shared is more akin to the content that was shared on Vine. Videos are backed by music, sound clips, or voiceover, in-app effects like different filters and adjusting video speed.
Content uploaded to TikTok generally falls into two broad categories: entertainment and informational. Entertainment content can include short skits, lip syncing videos, dance videos, or funny clips. Informational content includes tutorial videos, vlogging, and even travel guides.
Videos shared to TikTok are often remixed or reproduced by other users. This creates TikTok trends that quickly go viral, often ending up reposted on other social media platforms. No matter what kind of content a user is watching on Tik Tok, one thing is indisputable: Tik Tok is addictive. And this is exactly why marketers should pay attention to it - especially now.
Gen Z loves TikTok, but the audience is expanding
Gen Z (people born between 1997 and 2012) is just beginning to enter the workforce now, which means that in the coming months and years they will become more prominent consumers, holding up to $100 billion in buying power. Given this, it’s important for brands to begin shifting their marketing strategies to include the platforms that will allow them to reach and engage with Gen Z: one such platform is TikTok.
Gen Z is the largest generation in the USA, meaning that this generation has significant socio-cultural influence. And this is likely why TikTok became so popular, so fast: About 60% of TikTok users are Gen Zers.
Many attribute the popularity of the app with Gen Z to the app’s democratized virality. Going viral on TikTok is much easier than on other social platforms. This is because the content shown to other users on their home screen (known as the ‘For You” page) is relies on a recommendations algorithm that shows content to users based on the content they have previously engaged with.
The app tests out videos to see if they result in engagement levels, and if they are producing results, it will continue to show your video to more users. If a video is earning engagement, TikTok will continue to show it to new users, regardless of the creator’s following. TikTok shows all new videos to 50-100 users to gauge their reaction. If the video has a good engagement rate, TikTok will continue to show it on the For You page.
TikTok is a definite avenue for reaching Gen Z, but they aren’t the only generation using the app. Many Millennials (born between 1981 and 1996) have hopped on TikTok, especially as more and more people are staying home because of Coronavirus.
Use of the app amongst millennials has been steadily increasing since the end of 2019 thanks to concerted efforts by TikTok to reach older users. This increase means that brands who are looking to engage with TikTok users have the potential to reach both Gen Z and Millennials.
Understand the language of TikTok: trends and challenges
TikTok’s short video format and in-app editing tools have cultivated a unique storytelling language that is constantly evolving as users add personal creativity to their 15 second videos. A unique spin while adhering to current TikTok trends is the key to standing out on the app.
TikTok trends emerge in different formats. Some revolve around a specific dance paired with an audio clip, others are pranks, identified by a hashtag, and then there are challenges, also identified by hashtags.
Let’s explore an example of a TikTok challenge to illustrate how they work. The #raindropchallenge became a trend in 2018 when TikTok launched a raindrop filter. When applied, the filter creates a raining effect, and when the person in the video raises their hand, the rain is paused.
Here are examples of the #raindrop filter challenge:
As you can see in the above montage of #raindropchallenge videos, the filter gained popularity because users were able to find creative ways to play with the raindrop filter in conjunction with different songs and dances. The song Uptown Funk by Mark Ronson, for example, became an entertaining song to use because of the song’s lengthy pauses. In other iterations of the challenge, users create short narratives out of the filter by using props like umbrellas.
If you’re a brand looking to use TiKTok as an acquisition strategy, it’s important to be in the know about TikTok’s trends. The app’s trends are constantly emerging and evolving, and so it's important to spend significant time browsing the app to gain a sense of current challenges, themes, and motifs. You’ll want to tap into this “TikTok language” so that you can create a campaign that appeals to TikTok users.
Some brands are already tapping into TikTok
Gymshark is one of many brands that has successfully harnessed TikTok as a marketing channel. An early adopter, Gymshark has been posting videos to a branded TikTok account as far back as 2018.
The fitness apparel brand uses the app to raise brand awareness through influencer marketing and challenges. The content that they share does not directly promote their products, rather, it promotes the fitness lifestyle associated with their products.
The result is content that markets the brand while being equally entertaining and engaging. And it’s worked - Gymshark now has over 1.7 million followers on TikTok and their videos gain anywhere from 5,000 to 200,000 likes with engagement in comments and shares.
The two strategies that Gymshark has used tap into two of TikTok’s strengths: influencers, and challenges.
- Partnering with TikTok influencers.
Like other social media platforms, TikTok has a large community of influencers - users that have gained millions of followers through the popularity of their content. These creators are viewed as celebrities by their fan bases, and therefore brands that they use, wear, or promote benefit from their influence. Gymshark has collaborated with top fitness and lifestyle influencers on the app to further their messaging in a relatable way.
- Branded TikTok challenges.
Gymshark regularly creates TikTok challenges that reflect their messaging. The challenges, which always relate to fitness, are posted by Gymshark and then recreated by a partnered influencer, who amplifies the visibility of the challenge. From there, TikTok users repost themselves attempting the fitness challenge, allowing the branded content to organically gain engagement. All the while, the fitness challenge reinforces Gymshark’s lifestyle and brand values.
For Gymshark, TikTok was the right platform to focus marketing efforts on because their target market, Gen Z and Millennials, are the most engaged demographic on the app. This alignment means that through a TikTok presence Gymshark has opened up another avenue for customer acquisition.
How brands can leverage TikTok to reach consumers
Partnering with influencers and creating challenges has worked for Gymshark, but there are a variety of other methods that brands can use to tap into TikTok for customer acquisition. Here are a couple strategies worth considering:
1. Create your brand-affiliated TikTok account to inform followers.
While Gymshark’s TikTok presence is about fitness and fun, there’s also the option to use the platform to share and communicate with followers detailed information about the brand. For example, make-up tutorials and reviews are a popular vertical on TikTok, so makeup brands could leverage the platform to share their tutorials and gather valuable feedback.
2. Partner with a TikTok influencer for merchandising.
Another opportunity for brands is to collaborate with a TikTok influencer by having them design limited edition merchandise. The design process can be highlighted in TikTok videos, as well as the finished product. This gives your audience insight into the development of your products, and it leverages an influencer to increase your brand’s reach.
3. Start a brand-affiliated account to participate in challenges.
Tiktok can be used to raise awareness about various elements of your brand’s identity, and that includes workplace culture. Rather than creating challenges, brands might opt to participate in challenges. Having staff get in on the fun of TikTok challenges is great for company morale (especially if they take turns participating from their homes as we social distance), and it shows your audience the culture behind the brand.
4. Use TikTok for advertising.
Much like other social media platforms, TikTok offers advertising space to retailers. Ad space on TikTok is much more expensive, though, starting at an average of $10 per CPM. There’s a minimum spend of $500, and large campaigns can cost up to a total of $300,000.00. If you’re willing to invest in premium advertising, and the demographic of TikTok is your target consumer, it’s worth considering.
So, should brands be joining TikTok?
Already in 2019, TikTok was beginning to outperform Instagram with a higher rate of downloads and active users. And with the TikTok demographic skewing younger, it’s important that retailers recognize the value in marketing to them sooner rather than later, because Gen Z is now entering their peak spending age, and Millennials are already there. With high engagement, a large viewership, and with the right research and strategy, brands can cultivate TikTok into a successful branded marketing channel.
TikTok’s potential as a customer acquisition strategy had been obvious already, but the current pandemic makes the value of building a presence on the app even stronger now. With most consumers at home practising social distancing, screen time, especially on social media, is up, and marketers are shifting their strategies to reflect changing consumer behavior.
Now might be the prime moment for brands to begin introducing strategies for leveraging TikTok as a platform for acquisition. The TikTok presence you build now will benefit your brand both during and after COVID-19.
Read more from Diff:
Why it's time to introduce digital storytelling to your brand strategy
How to market to Gen Z in 2020
How great customer service can improve your customer lifetime value
