If it sounds familiar, it’s probably because Amazon announced something similar not too long ago. Amazon Spark started as an in-app feature in 2017. Members of the Prime service can post photos of products with reviews, and anyone who scrolls can like the photos or tap the Shopping Her Bag icon to view the product listings. . Spark was a less popular in-app feature and was replaced in 2019 by Shop-by Interest, where shoppers can select categories of interest and interact with other customers.
The success of TikTok made it imperative to launch Inspire. But, as Amazon’s last foray into social commerce showed, even adding another feature to the app didn’t stop companies like TikTok, Inditex SA’s Zara and Urban Outfitters Inc. from actually using it. It does not fix obvious weaknesses revealed by retailers that offer easy-to-use sites and apps. Shopping on Amazon feels like paying for gas online. Its flat, two-tone site lacks the aesthetics or organization that make browsing easy or interesting. Designed as a place for users to log in, complete purchases, and sign out with specific intent. More than 60% of his shoppers show a high willingness to buy when starting his Amazon search, according to his September report from Jungle Scout, a search and marketing analytics firm. If all goes well, the goods arrive in a few days in a simple brown box.Amazon makes billions of dollars because it’s predictable, efficient, and competitively priced. . It literally transformed the retail industry around the concept of convenience. But after 2022’s rough retail disruption, stagnant Prime membership growth, and thousands of layoffs, America’s largest online retailer is under pressure to find ways to become more than a great delivery company. “Social shopping will continue to grow. Inspire helps connect customers with “purchasable content” created by other customers, influencers and brands,” said a director of Amazon Shopping. Oliver Messenger said in an email response to the question. So far, shopper disenchantment is showing in the numbers. About 63% of those surveyed by Jungle Scout said they started searching on Amazon in the third quarter of last year, down from 74% in the first three months of 2021. increase. Meanwhile, TikTok’s share has risen from his 10% to 21%. Losing its position as the first place shoppers go to discover stuff means losing dollars. The more shoppers who browse TikTok and are directed to buy directly from brands, the less they spend on Amazon. Walmart’s e-commerce business is already facing Amazon taking market share as the online shopping boom accelerates due to the pandemic and subsequent shift to essentials.
It makes sense that TikTok is quickly catching on with retailers and advertisers. According to Influencer Marketing Hub, about 40% of TikTok users are between the ages of 18 and 24, and another 27% are between the ages of 13 and 17, a demographic with great purchasing power and influence on trends. . According to market research firm Numerator, only about 4% of Amazon shoppers are under the age of 26. TikTok’s potential as a shopping app is beyond doubt. Its For You page is terrifyingly accurate in targeting the content users want to see, triggering highly addictive behavior. The scroller shows a less interesting video before a video that really makes you want to build stuff. Parent company ByteDance has previously entered and won e-commerce with TikTok’s Chinese sister app Douyin . China is so huge that some analysts believe it has reached saturation point. Amazon’s live-streaming shopping business, on the other hand, is not very successful (it’s buried somewhere on the site, low engagement). TikTok’s addictive surprise factor makes it better than Amazon to understand why US audiences mix entertainment and shopping.
Instagram and YouTube have popularized the use of paid influencers to pitch products to their followers, leading to epic failures like the Fyre Festival. But TikTok’s culture of authenticity stems from youth marketing fatigue and quickly drives out influencers who aren’t honest with their reviews and sponsored content. This allows shoppers to feel more confident in what they read and see about products, unlike Amazon reviews that have been plagued with abuse and manipulation. , organically ignited like the Subway employees who boosted franchise sales to millions by sharing sandwich combinations, or created by a company that captured Gen Z’s surrealist humor. It’s just entertainment.
Of course, it’s not certain that TikTok is eroding Amazon’s e-commerce dominance. Amazon has spent years developing and improving its sophisticated marketplace and delivery network. So far, TikTok has mostly worked with Shopify Inc. merchants, but recently started hiring staff in the US to build out its fulfillment and delivery network. Like any social media success, his TikTok’s place in the lives of fickle young internet users is not permanent. Diplomatic concerns over Chinese ownership and political advertising bans can undermine trust with users and discourage people from spending money on the platform.
Whether or not it succeeds as a shopping platform, TikTok exposed Amazon’s biggest weakness in online shopping. This time around, Amazon must commit to making broader changes across its retail operations. Otherwise, you will lose out to the clock app. Bloomberg Opinion Details:
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This column does not necessarily reflect the opinions of the editorial board or Bloomberg LP and its owners.
Laetitia Miranda is a Bloomberg Opinion columnist covering the consumer goods and retail industries. She previously served as her business reporter for NBC News and her retail reporter for BuzzFeed News.
More articles like this can be found at bloomberg.com/opinion.