While retailers and brands are limbering up for the great bounceback as retail reopens and consumers start to loosen their purse strings (we hope), they should start testing some of the newer channels to market that appear to be delivering spectacular views and click throughs.
Take luxury brand Balenciaga which ran a shoppable campaign on TikTok over Christmas 2020. Its videos got more than 25 million views and 4.5 million clicks to a landing page.
The demographic of TikTok means brands are also reaching a new younger audience, which in China means that you are quite likely to be an only child, indulged by your parents and able to buy expensive brands.
Most of the growth in luxury is in China
What we don’t know is what the actual conversion figures are likes but considering that, according to McKinsey in its 2019 China Luxury report, Chinese consumers will account for up to 65% of 2018-25 global growth in luxury goods, an investment in social channels that have moved to ecommerce is essential.
According to Glossy, a sponsored hashtag that invites viewers to a challenge is expensive, as much as $150,000 per week, but Moncler reported that in the first five days of its campaign in December it had received more than 2 billion views.
Other brands have apparently been less successful. A clash of cultures is blamed as anally retentive brands meet the Wild West inside an almost entirely young demographic’s mind (42% of TikTok users are 18-24). But brands will catch up fast, spurred on by over a year of Covid where reading and reacting in the market has been so difficult.
Success depends on working with an influencer
Working with an influencer is a sine qua non of TikTok which relies almost exclusively on personalities, the most viewed of which is Charlie D’Amelio. Without their collaboration and creative input, brands tend to fall flat on TikTok.
What we also don’t know is how Balenciaga and other brands manage fulfilment. Where is the stock located? What were the estimates for total demand. These will be important questions to answer because, while the product and the experience are not indivisible, the gap between them is narrowing, meaning a luxury brand has to deliver a luxury experience and that demands single view of stock across channels and the ability to fulfil quickly.
That’s my takeaway – without single view of stock, brands will not be able to satisfy the demands of a fragmented channel landscape. TikTok is just one channel embracing ecommerce. Instagram, Snapchat, Facebook and Pinterest are the big ones and there are a ton of others that are essentially affiliate sites. Time to call up and ask for a rate card.