Memo: TikTok’s Job Listing

In a recent report on TikTok’s ambitions, we ignored commerce altogether to focus on its advertising ambitions and that was a mistake. While the ByteDance offshoot spars with Apple for the eighth largest advertiser in the united states, they’ve proven that they’re not going to be reliant on advertising alone to continue building its linear commerce kingdom. TikTok just might be able to succeed where other social media apps before it have struggled and even failed.

The video-sharing app, which has exploded in usership and cultural sway in the past two years, is planning its eCommerce strategy and signs point to it being a hefty investment, and TikTok Shop is poised to be a significant revenue engine for the platform which has already quickly built a massive advertising business.

A job posting for a business solutions and merchant development manager for a global fulfillment center is a signal that it’s planning on becoming an eCommerce platform in addition to a social media app. The job description reads: “With millions of loyal users globally, we believe TikTok is an ideal platform to deliver a brand new and better e-commerce experience to our users. We are looking for passionate and talented people to join our global fulfillment centre team, together we can build an e-commerce ecosystem that is innovative, secure and intuitive for our users.”

That’s just one of more than a dozen job postings relating to eCommerce and fulfillment posted by TikTok in the last two weeks, according to Axios, which reported on these product fulfillment centers on Tuesday. It says that TikTok is in the process of creating “an eCommerce supply chain system that could directly challenge Amazon”:

According to the job postings, TikTok is looking to build an “international e-commerce fulfillment system” that will include international warehousing, customs clearings and supply chain systems that support domestic e-commerce efforts in the U.S. and cross-border e-commerce efforts. The systems will eventually perform parcel consolidation, along with transporting goods from one stage to the next and managing free returns.

How is TikTok in position to take on Amazon? Well, it comes down to the user base and the mindset that people are in when they’re scrolling the app. While not every video is full of product recommendations, many are. Categories like skincare and beauty have seen products explode after going viral on TikTok – even the most mundane you might find on a CVS shelf, like long standing affordable skincare brand Cerave. Users post hauls from eCommerce brands and sometimes take viewers into Home Goods or Target to explain what they’re buying and why. Products that go viral often sell out. Fashion trends have been born on TikTok, and even videos that aren’t recommending products draw comments asking the creator where they got the sweater they’re wearing or the mixing bowl they’re using. Product inspiration is always in the background of any TikTok video, regardless of the topic.

That’s the key differentiator for TikTok compared to other platforms, which have had a hard time connecting the dots between user engagement and consumerism. Meta has walked back its Instagram shopping push, despite long being pegged as the next online mall, while Amazon’s QVC-like efforts have fallen flat. Snapchat, which has excelled in AR technologies and has partnered with some brands to make use of that, has been slow to build out an eCommerce arm.

For many, it doesn’t work. For TikTok, it might. It has a booming, loyal audience interested in transacting when they’re using the platform. By taking advantage of this, TikTok could connect users and creators directly to product listings and then ship out orders itself, reducing the reliance on middlemen. Right now, most creators will set up link-in-bios to their Amazon storefronts or Like to Know It lists, so anyone in search of a product has to jump through multiple linkouts in order to buy products. The speed with which TikTok is able to make products sell out in stores and online has shown that it’s not a complete hurdle for customers. But linking commerce directly into its platform opens a new revenue stream for TikTok that’s all the more critical now that Apple has clamped down on third-party advertising data collection. Like Meta, TikTok has been reported to be using in-app browsers to collect key data points that are against to skirt around Apple’s recent iOS privacy practices, which have made it more difficult to target ads.

Like other platforms, TikTok needs revenue from eCommerce to make up for that lost ad efficiency. But unlike others, it’s actually positioned to succeed. And this is what makes Meta’s retreat from eCommerce as shocking as TikTok developing teams around shipping and logistics. It’s the era of first-party data and retail media networks. Amazon has proven that native commerce is the best way to collect it.

Por Web Smith | Editado por Hilary Milnes con arte de Alex Remy y Christina Williams

Member Short: The Instacart Necessity

The Instacart OS is less of an ideal now and more of a necessity. In September, Instacart rolled out a suite of new technologies on the heels of two acquisitions that underscored where the company would be investing for the future: omnichannel retail. It wants to be the Shopify of grocery, and CEO Fidji Simo said that customers are going to shop both online and in store, so the company needs to serve retailers in both environments. In a memo at the time, we wrote:

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Memo: Shopify POS Go’s Challenge

Shopify’s mission has long been to is to arm the rebels. Now, it’s making necessary changes to its business model in order to stay relevant as the strategies of the “rebel alliance” evolve with the times. As we wrote at the precipice of the pandemic:

When you arm the rebels, do whatever you can to make sure that they win.

After specializing in developing software for websites and offering eCommerce tools for DTC brands, Shopify is now investing its time in helping retailers sell more in offline retail. Its new payments device, called Shopify POS Go, lets merchants handle in-store checkouts that connect to their online Shopify stores:

Made for modern retail: POS Go is Shopify’s most powerful, secure, and revolutionary mobile POS device that fits in your hand. Turn it on and instantly connect to critical features to grow your business.

POS and in-person payments have become one of Shopify’s fastest-growing divisions, Quartz reported. The growth reflects a post-pandemic return to in-store shopping as well as brand recognition that the direct-to-consumer strategy is an incomplete distribution strategy. As more brands push into in-store retail, having inventory awareness across all channels is a must. From Quartz:

For example, many shoppers enjoy being able to buy online and return in person, or vice versa, but disjointed software for these kinds of hybrid interactions can turn that into a headache for many merchants.

Shopify isn’t just recognizing that there’s a void to fill in physical retail, it’s right-sizing a previously “overly aggressive bet on the speed at which the economy would move online,” according to the Financial Post. Indeed, Shopify was the primary infrastructure of the venture-financed DTC era. It made it possible for both resource-rich and resource-poor brands to quickly and easily start and operate online stores. The more that this class of brands built their businesses online, the more Shopify expanded upon its own capabilities. These add-on tools included email marketing plugins and customer acquisition integrations. Over the years, it adapted to meet the needs of its rebels and it’s doing the same now as it expands to account for offline sales.

According to Shopify, this particular period in its fabled history is somewhat of a reckoning. While sales shifted online during the pandemic, they’ve now moved back offline and brands with only online DTC levers to pull for growth are at a great disadvantage. The move to the marketplace and the in-person retailer have been closely followed by 2PM:

El modelo de mercado será cada vez más importante para las marcas nativas digitales a medida que el comercio electrónico siga evolucionando y las fronteras se difuminen. Los minoristas más capaces llegarán a los clientes allí donde estén.

Shopify needs to follow the brands as well, in the best way that the company can, otherwise it risks irrelevance. The company spent the summer months shaken by the clear signs that online commerce’s heyday during the pandemic was not to last after restrictions were lifted. Shopify announced that it would be cutting 10% of its workforce in July, with CEO Tobi Lutke taking the blame for betting too big on eCommerce’s quick growth jump. 2PM reported at the time:

Marketplace strategies for brands is the answer to customer lifetime value. Just this week, Glossier signed to sell within Sephora. Just a few years prior, Glossier was adamant that it would remain a direct brand. More DTC retailers will move to develop wholesale relationships with top marketplaces.

Hay indicadores que sugieren que los mercados en línea son más resistentes durante los periodos de dificultades económicas. Si nos fijamos en una muestra representativa de valores minoristas de comercio electrónico (Amazon, JD, Alibaba, Ebay, Etsy, etc.) y los comparamos con valores de software (Shopify, BigCommerce, etc.), los marketplaces obtuvieron mejores resultados que las empresas de software. Y aquí es donde las cosas pueden tomar un giro positivo para Shopify.

The momentum is moving in the direction of marketplaces, especially the largest of them (to include Walmart). Shopify is still the infrastructure for many brands’ who require online presences but something has to give. The question becomes, how does Shopify equip brands that are moving into the enterprise marketplace format? Shopify must move beyond app integrations to meet its vendors where they want to be. That is, in physical stores and / or stocked in the warehouses of these top marketplaces. How does Shopify apply its new focus as (an enabler of physical retail) to a stodgier part of the retail industry? I believe that Shopify’s next win will be a major equipment contract with a national retailer, a move that will communicate Shopify’s commitment to omnichannel retail and the many merchants that now require it to grow.The solution may be in the words from Shopify’s VP of Product, Arpan Podduturi:

[Shopify’s POS Go] is the type of experience that you would find at an Apple store or Nike store but given to the masses to small-medium businesses all over the world who can now bring that level of service to their stores.

A Shopify partnership with a retailer as notable as Nike would capture the imaginations of Wall Street, its many merchants, and the marketplace retailers who do want greater access to the brands that Shopify considers its core audience. SHopify has to make moves now though – the brands certainly are.

Por Web Smith | Editado por Hilary Milnes con arte de Alex Remy