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Is TikTok Shop The Next Big Thing? James Nord, The Founder Of Fohr, Talks TikTok Shop
Fohr is an influencer marketing company and self-service platform that helps brands run influencer marketing campaigns with verified analytics, influencer demographic information, reports, competitor research tools, EMV (earned media value) of influencer coverage, and more. The company also runs managed campaigns from start to finish for brands that want a more hands-on approach to influencer marketing. James Nord, the Founder of Fohr, shares his insights into TikTok Shop and how this has impacted influencer revenue opportunities.
Recently launched in the United States, TikTok Shop allows creators to produce shoppable videos and live streams for For You feeds to create a seamless shopping experience. TikTok users can even make product showcases and connect with sellers through commission-based marketing.
Businesses can utilize TikTok Shop to display their products on the new product marketplace or shop tab, promote their shops with shop ads, and take advantage of logistic solutions offered by TikTok, like its fulfillment plan and secure checkout.
But is TikTok Shop really the next big thing and a monetization solution for influencers?
Is TikTok Shop The Next Big Thing? James Nord, The Founder Of Fohr, Talks TikTok Shop
Fohr TikTok Shop Survey Findings
Fohr recently surveyed 242 influencers (with at least 5,000 followers) from its platform between August 29th and September 5th, 2023, to gather insights into how influencers use TikTok Shop. The average survey participant had a median of 26,600 TikTok followers and 20,089 Instagram followers.
41% of respondents have joined TikTok Shop, but only 23% have started making commission-eligible content.
Part of this disconnect is that earnings and commissions vary significantly. The commissions are vendor set and range from 3% to 30%. However, one survey respondent with 53,000 TikTok followers shared that they had a few posts go viral and made great commissions, which is encouraging for other creators.
James Nord, the CEO and Founder of Fohr, provides another incredible example of influencers turning TikTok Shop into a substantial revenue stream.
James shares, “One influencer recently made $10,000 selling Stanley coffee cups on TikTok Shop. The affiliate commissions range from 5% to 20%… Historically, the biggest driver of revenue for influencers is brand deals and working on brand deals, and I don’t see that changing in the near term. But this will be a way for people to supplement their brand deals.”
Concerns Around TikTok Shop
Influencers who hadn’t joined TikTok Shop voiced several primary concerns during the Fohr survey.
40% of the influencers who haven’t joined TikTok Shop shared that they’re waiting to join because they are skeptical about it or don’t understand it. In comparison, 4.5% said they were worried about turning their page into a shopping destination.
Interestingly, 10.7% of influencers who hadn’t joined TikTok Shop noted that they plan on joining but want to see more brands that they love on TikTok Shop before they start participating. This is excellent news for brands as it means even more influencers are excited to join TikTok Shop once they see more brands on the platform.
Overall, nearly 60% of influencers surveyed had either joined TikTok Shop or were interested in doing so in the future. The other 40% of influencers seem to be interested in “waiting and seeing” how TikTok Shop performs or learning more about it so they can understand it better.
The TikTok Shopping Experience
Of the influencers they surveyed, 33% reported that they had made a purchase through TikTok Shop.
Regarding the shopping experience, 30% said the product met or exceeded their expectations, and only 2% said the product failed to meet their expectations – which bodes well for influencers interested in promoting products through TikTok Shop.
On top of this, almost 29% of survey participants say they’re interested in purchasing from TikTok Shop soon once they find a product that catches their eye.
Shopping on TikTok vs. Instagram
TikTok has received its share of criticism about its new shop feature. In the past, Instagram has received similar comments about its shopping features, which James attributes to people’s expectations of the platforms being places to find entertainment and connect with family, friends, and acquaintances.
However, James suspects that TikTok will have a better approach to its shop feature because of the many platforms, like Instagram, that have come before it and had varying levels of success with their shopping features. As a newer platform, TikTok can learn from these past failures to make a better product.
Another aspect that he is excited to watch is consumer behavior.
One way that American consumers differ is that they often don’t want to shop where they look for entertainment.
Essentially, Americans view apps like TikTok as entertainment sources rather than a place to shop. Still, this viewpoint may change with time.
James explains, “We don’t want to misrepresent what advertising does and how it works. It’s very rare to see an ad and instantly want to purchase something; that’s not how consumers think. It’s just not how it works. Many are approaching social ecommerce thinking the problem is we need to make it easier to shop when the problem is actually – maybe the person isn’t ready to shop. Technology can’t solve for that problem.
One of the reasons that brands continue to invest more in Instagram brand partnerships is that audiences on Instagram view the platform as more commercial. With time, this may evolve.
Instagram also has an older demographic with more purchasing power, giving them more disposable income to spend on sponsored items.
How Does Fohr Help Brands Capitalize on TikTok’s Unique Virality?
Most influencer marketing companies show a creator’s average reach on each platform to brands to give them an idea of what percentage of their audience they reach with each post.
However, TikTok is a unique platform where a creator may only reach 10% of their audience with several posts but then have a massive viral post that brings this average up, skewing the numbers.
Fohr shares a virality coefficient with brands instead, which determines how often a creator posts content that performs two, four, six, etc., times better than their average post. James shares the following example to understand this metric better.
James shares, “Sometimes, you want to work with someone who can give you that chance to go viral. And sometimes you want to work with someone really consistent, that is going to reach their audience, and they’re probably not going to create this viral sensation, but they’re also not going to get 5% reach, they’re always going to get around 25%. You need those mix of players on your influencer team.
Knowing this metric helps brands increase the odds of their sponsored content doing well and reaching more people.
For small businesses, James recommends experimenting with TikTok Shop to give it a try since it’s not a high-stakes investment. If you have a bigger brand, he recommends putting more time into your strategy and measuring an influencer’s connection between their posts and Shop results as much as possible.
