We’re almost six months into the grand experiment that is TikTok’s native shopping feature, and if you ask them, the platform is re-inventing e-commerce. According to reports, TikTok sold $7 million in gross merchandise volume in a single day, more than 5 million new users made a purchase during Black Friday and Cyber Monday in November, and they believe they’ll generate as much as $17.5 billion this year in the United States. The way they tell it, TikTok is the channel that has finally cracked the code for live-stream e-commerce in the United States. There’s only one problem: have you noticed that shoppable commerce has made TikTok a whole lot less interesting and fun? Despite clear best practices for live-stream hosts, many TikTok creators have, in a race for riches, taken to peddling low-quality beauty products, cheap electronics, and fast fashion, to the point where creators have over-indexed. No longer is my TikTok feed interesting, creative, and engaging: instead, it’s full of people telling me I “just to try this product.” have It’s a failure that’s tough to figure out as TikTok has earned praise for the strength of its “for you” algorithm. In years of personal use, I never felt my algorithm was off-kilter until management had an incentive to push TikTok Shop in front of as many eyeballs as possible. The pressure to perform as an e-commerce channel is evident in its performance: the numbers don’t lie. When TikTok Shop Partner and social commerce expert Ethan Kramer selling more than $102,000 in a single live sale, he pulled back the curtain on some numbers that don’t tell such a peachy story below the surface. posted about his success His single-stream effort involved 9 hours of continuous content during which time he converted a whopping 2.8 million viewers into a mere 1,300 buyers: a conversion rate of 0.00046%, a fraction of the typical e-commerce shop conversion of 2-4%. And that was done with the assistance of TikTok, who promoted the feed and picked up the tab on the discounts the seller ran during the sale. Despite some flashy numbers and the fact that TikTok thinks it will double the size of the live-shop e-commerce market in the United States this year, it just isn’t working that well. And the reason is simple: users come to TikTok for entertainment, not to shop. State of Mind Is a Key Driver of E-Commerce Success “Mood to buy” describes the psychological state of a consumer that makes them more inclined to make a purchase, like when shoppers are more likely to make a purchase because they’re in a positive mood, have a specific need, or are motivated by an external factor. Much of advertising and marketing strategy is built to address these underlying motivators and drive the consumer to take an action or make a purchase. An important contributor to “mood to buy” is the shopping environment, whether that’s online or offline. In an offline shopping environment, there have been countless dollars and hours spent considering how store layout, music, and lighting can move a person to make a purchasing decision. The same is true online, especially in the area of user experience design. Countless millions are spent each year optimizing websites for fractions-of-a-percent improvements in conversion, testing well beyond copy, down to how weather intersects with the shape, size, or placement of a button. Given how things are shaking out with the TikTok Shop experience, including how it and the performance metrics look, it seems end-users may be signaling that they’re on TikTok to hang out, not buy workout supplements or fast fashion. feels This could be the single thing that proves insurmountable for TikTok in their American e-commerce effort, and it’s easy to imagine this becoming the latest in a long series of high-profile failures in the area of shoppable video, following in the footsteps of Amazon and Meta. Amazon and Meta’s challenges in this area are many, including a general lack of consumer awareness and their deep-rooted associations with traditional e-commerce experiences. Changing consumer shopping habits within the context of their own apps and websites is a challenging task, especially when you consider Meta’s position in no-commerce social. Andrew Conti, Founder & CEO of Reactive Live Shopping, which is a , has a clear read on big tech’s struggle: “Socials primarily drive engagement for those platforms; increasing comments, likes, and follows for the influencer and, frustratingly, isn’t focused on sales for the brand.” platform-agnostic livestream e-commerce platform Conti continued, “In a performance, the same line that makes a crowd erupt with laughter will cause crickets if used at the wrong moment. We’re seeing this with social commerce, where the same content will perform dramatically better on a merchant’s site than on socials. What’s the difference? We believe it's context and timing.” This is an insight that has been universally true throughout the history of commerce: just ask producers of winter jackets how their sales numbers look on an August afternoon in Manhattan. But in this modern environment of optimization, that context seems to have been lost. In other words, the narrative that live-stream e-commerce is struggling is misinformed. Where There’s Smoke, There’s Fire: Hope for Live-Streaming E-Commerce This provides hope for livestream e-commerce, though it does change the shape of the conversation. Conti’s platform is finding wins in fashion and beauty, areas where TikTok and Meta have struggled to find traction. There has been great success in collectibles and trading cards, too. Drip Shop, a , has “grown double-digits last year, with sports cards growing by over four times” according to Co-Founder and CEO Javaughn Lawrence. And Drip Shop is not alone. livestream e-commerce app that focuses on sports and trading card games I spoke with the leaders of several competitors who focus on trading cards, all of whom shared some growth stories that may surprise given Fanatics (owner of trading card producer Topps) launched their own live-stream shopping platform. Consensus is the entrant of a well-funded industry leader has exposed many new customers to the concept, validated the vertical, and the rising tide has lifted all ships. One of the largest contributors to the success of live-stream e-commerce in trading cards is the personal touch. Live streams often involve hosts who are passionate about the product and don’t just limit the conversation to the cardboard in front of them: they talk sports and generally, well, socialize. In an online environment where attention is impossible to capture for any meaningful amount of time, engagement and attention-share on these streams are through the roof. And that’s because there’s clearly an appetite for this shopping experience. The livestream e-commerce experience is far more natural than many other e-commerce user experiences, as evidenced by the decades of success of QVC. Live stream commerce has a clear place in your list of DTC e-commerce strategies, especially if you consider the fact that the content produced during such an effort can be repurposed to feed your social media content outside of the sale as well. What has become clear in 2024 is that the problem is not the format or the message, it’s the “when.” And as the livestream platforms come to accept that they cannot force the elusive “mood to buy,” the tide will continue to rise.

This story contains new, firsthand information uncovered by the writer.

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Americans Are Starting to Figure Out Livestream Commerce, and It Is Good

Too Long; Didn't Read

Drew Chapin

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Americans Are Starting to Figure Out Livestream Commerce, and It Is Good

Too Long; Didn't Read

Drew Chapin

STORY’S CREDIBILITY

Original Reporting

About Author

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