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Ep 459: The Pod That Launches 1000 TikTok Shops: An Exclusive, Deep-Dive Report with RightMetric's Charlie Grinnell
00:45:24
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- [00:00]
A
TikTok users spend five times more than Snapchat users in terms of time spent. Think about the old Warren Buffett or Charlie Munger adage, fish where the fish are. People are spending significant amounts of time on this platform. We typically cast these types of platforms aside. We're like, Ah, TikTok is for young kids. 41% of TikTok users are over the age of 35. If you are going to spin up a TikTok shop, you need to have creators be a big part of your strategy. And a big piece of that is like affiliates. Live streams this way was crazy to me. Live streams drove a quarter of sales. That's nuts. That behavior, that is something that I wouldn't associate with like American consumers to do. But. But then I go, no, Charlie, you idiot. For 40 years, what did we do? We did that on television.
- [00:54]
B
Hello and welcome to the D2C podcast. I'm here today with Charlie Grinnell, co CEO of RightMetric. We've been doing some cool stuff with RightMetric, their research on demand firm, which I think is really interesting. And so we kind of had this idea, why don't we collaborate on some research? And so you sort of asked us what we thought our readers might be kind of most interested in. And we thought about TikTok shops. It was a big theme of our event that we just had here in Victoria. We know that there are some entrepreneurs taking massive advantage of this platform and we thought, who better to dig in on some of these, like, really intimate details of what's actually going on on the platform, what's working, how big it is, how big of an opportunity it is than our friends at Right Metrics. So, Charlie, welcome to the D2C podC.
- [01:36]
A
Hey, thanks for having me. It's good to be back. And I made sure to wear a green shirt because we're talking about money today, making money on TikTok shops.
- [01:43]
B
That's right.
- [01:44]
A
And you're also wearing green for those of you who cannot see him.
- [01:48]
B
Yeah, well, that's a good point because you're going to be walking through this really in depth report that you guys collaborated over the last like or put together over the last two, three months kind of thing. It's been a real labor of love. So you're going to want to either go to Spotify, Find us on Spotify, or find us on YouTube where you'll get this full piece. We'll also have this available for Download through the D2C newsletter that you can download the whole thing and check it out. But Charlie, I'm just kind of. I've got some color I'll kind of add in here and there, but otherwise I'll kind of turn it over to you and let you walk through the research.
- [02:17]
A
Cool. You know, I think when we talk about TikTok shop, and it's kind of been this black box, right? Like, that's what we were talking about in what were we going to create? And everyone's heard about TikTok, and everybody in the e commerce space has heard about TikTok shop. But when we kind of set out to dig into this, we couldn't really find much. So that's really when our team was like, okay, you know what, we're going to sit down and like, dig into all of our different data sources, or as I like to say, have the nerds go deep. And so that's really what we're going to kind of talk about today. So there's a lot in here. We're not going to be able to get through all of it. So, you know, definitely download a copy of this by going into the show notes and dig into it. But yeah, I think today we want to kind of talk through the high level things that we saw in this. So when we think about kind of TikTok shop at a high level, just a little bit of 101, it was rolled out in the US in 2023. And I think the big thing here is it's merging entertainment and commerce like never before. And one of the things I just want to call out is like, we've all heard social commerce, right? We've heard this idea of like, okay, you can shop on Instagram, you can shop on Facebook, you can kind of shop in all these places. But it hasn't really stuck, right? That's. I think something that has been, like, pretty interesting is like, it just hadn't really stuck. And so what we noticed when we started to dig into this was in the US alone in summer of 2024. So all of the data that we're going to show you in this is from the summer of 2024 in the US alone, it did over $1.5 billion in sales. And so for us, that was one of the things that was really like, hey, you know what? This is actually a signal for an opportunity to so go, hey, if we're in. If you're in a specific industry or category, and you're going to see those categories as we go through this, TikTok shop might be something worth kind of digging into. So that was Kind of like setting the stage, so to speak. And in terms of like just kind of like the three main entities selling on the platform, it's really three kind of things. Creators selling their own products, creators selling a brand's products, or brands selling their own products. Those are kind of like the three buckets in terms of like who is active on the platform today. And there's kind of these three main ways to sell. First one being shoppable live streams. So tagging products in real time, you know, during live events, there's creator videos. So embedding links on content to drive kind of seamless shopping to a. For you kind of like shopping feed and then digital storefronts. And this is really like what we've seen kind of the other social platforms do, right? Where you can kind of upload your entire inventory and everything into a storefront and then people can kind of come there and buy. And so when we look at TikTok shop versus the rest, this is something that we really wanted to dig into. And I think there's some fascinating stats here that made our team pause and just go, whoa, we think there's an opportunity here. And so the first One was that TikTok does attract a younger audience, right. So, you know, 18 to 24 is kind of 29% of their audience, 25 to 34 is 30% of the audience. I think what was really, really fascinating though was when we dug into this, TikTok users spend five times more than Snapchat users in terms of time spent. Right. And so like when we think about the old kind of like Warren Buffett or Charlie Munger adage, fish, where the fish are, people are spending significant amounts of time on this platform. So that was kind of one big thing, was like, hey, just looking from like a time spent perspective, is that a place where we as marketers and as e commerce folks, could we go fishing there?
- [06:06]
B
I think what's super interesting about it is it's, yeah, it's that content piece, it's that entertainment piece where it's like this is not just really competing with social networks of the past. It's competing more with tv, it's competing more with movies and like leaving the house. It really behooves advertisers to understand that as a platform that it is first and foremost this like entertainment platform. So that's gotta be the lens you think about it through how you create your content.
- [06:30]
A
Totally. And I think what I would just add on to that is when we think about where people spend time right there's 24 hours in a day. You're spending some time sleeping, you're spending some time working, you're spending time online. And that time online, what are we doing? Right? Maybe we're messaging someone WhatsApp iMessage. Maybe we're scrolling TikTok, maybe we're scrolling Instagram and then, okay, maybe we're watching stuff on Netflix. I think what TikTok has been able to do, to echo your point, is it's an entertainment platform that is still taking place on a phone. Now that's not to say that Instagram or Facebook or YouTube or others haven't done this, but they've created this thing that has like pulled people into it where they spend a significant amount of time and they've managed to start to bridge the gap between content and commerce. And that I think is fascinating. And that for whatever reason, that experience doesn't exist as purely as it is on TikTok. So I just thought that was like really, really interesting. And another thing is like, okay, we all spend a lot of time watching Netflix, right? We've seen Netflix stock like soar and you know, they're rolling out all this content. But when you're sitting back watching Netflix in bed, on your laptop or on your TV in your living room, there isn't a way where you can like shop the outfit from your Apple TV remote, right? So I think that's the thing is like the medium has, has really started to take off and people instead of watching a Netflix show, will scroll TikTok for 90 minutes and be able to dig in in that way. So yeah, you're, you're, you're bang on the money there and that they've been able to kind of, kind of bridge this gap. So one other thing that I think I just wanted to hammer home here was this kind of like old wisdom where it's like TikTok is for the young kids. 41% of TikTok users are over the age of 35. So that's, I think another thing is like we typically cast these types of platforms aside. We're like, ah, you know, TikTok is for young kids. I would never do that. And I think what we're seeing here in the data is that like there actually is a growing audience of 35 plus there. And this actually reminds me of a story and this is a bit of an aside. So you know, I work in research, nerdy, trying to follow like what people do and get an understanding. One day I'm over at my parents place and this is an example of, I think, this, this kind of behavior that we associate with a specific demographic. So I'm over at my parents place and you know when you're talking to someone and you're like, ah, you can't quite remember a fact. And so you go, you reach out your phone, you're like, I just need to Google that. That's going to bug me. So I'm talking to my mom about something and she's like, hold on, I can't seem to remember, let me just google that. So she walks over to the counter and they have an iPad sitting on their counter and she walks over and me being like the dorky, you know, researcher, I'm kind of sitting back and watching her and she touches the YouTube icon on the iPad. And in my mind she has said, I'm going to just google this. In my mind I'm like, there is no chance. My 63 year old mother at the time knows that YouTube is owned by Google. There's no chance. So she like touches the YouTube icon, types in her thing, hits search, sees a video and goes to hit the video. And I go, mom, stop. What are you doing? And she's like, well I'm Googling. And I'm like, you're on YouTube. And she goes, charlie, I don't want to read, I want to watch. And that was like, that was crazy to me. And this is like a few years ago, right? But I was like that impatient behavior we would previously associate with, ah, that's just like impatient young kids. Here's my 63 year old mom proving that wrong. Right. I think it's this behavior that doesn't necessarily link just to a demographic, it links to all of us. So that's that story. Why that's relevant to this is, hey, it's not just this Gen Z only kind of stereotype. It is a valuable platform that has diverse age segments with varied buying power across the board. So that's just kind of another thing to think about.
- [10:30]
B
Yeah, it's got me hooked. It's definitely my number one, you know, content consumption channel probably, except for maybe podcasts. I feel like I listen to a lot of podcasts.
- [10:38]
A
Yeah, I listen to a lot of podcasts too. But it's, but it's interesting, right? Like it's, it's, it's something where, hey, we're spending a significant amount of time. And so when I think about that, when we talk about spending a significant amount of time, TikTok users spend 61% more time per session than other platforms. Right. And this extended kind of engagement creates a larger window to showcase products, tell stories, et cetera. And I think what's wild here when I look at this graph is it's like two to one versus other big platforms. Right? And so that's another kind of key thing here. It's not that people aren't spending time on meta or Facebook or Instagram or Pinterest or Snap. They're still absolutely spending time there. So the overarching narrative here isn't kill all those other channels. The key takeaway here is they're spending more time on TikTok. And this, again, is another signal to, hey, should we actually experiment spinning up a shop and see what we can get? Right. That this, to me is like overwhelming data. Where it's like, this is worth a try, this is worth a test, this is worth a hypothesis. So, yeah, when I saw this, I was quite surprised to see how high it had gotten because I think since TikTok has kind of come onto the scene, so many people, and we get this all the time from different customers of ours. Okay, now that Facebook's dead, what are we doing? And it's like, well, it's not dead. You know, there's still a ton of people spending a ton of time there. Right. But I just thought it was really, really interesting when we look at this kind of time spent per session and you break it down in this way. Yeah, people are spending a significant amount of time on. On TikTok. And to go back to the. The. The Munger and Buffett adage fish, where the fish are a hundred percent.
- [12:19]
B
And I was just. I just was looking it up and so meta is. I hear the refrain from big C, cb, cbdc. Brands that are trying to scale that just. Facebook just has that, you know, it has the scale and it does. I was just looking. It was 2.8 billion users versus 1 billion users. But that's not like I. I remember. I remember looking at that before and it was like a fraction as opposed to like half or basically where it's at now, like a third where. So. And it's. And it just. But it does require. It's interesting that, that it takes. That people are spending so much more time on it indicates that it's like a different beast a little bit as well. Right. Like in how people are using it and what people expect from it and what they expect from brands on it. Probably.
- [12:57]
A
Totally. And I think, like, that that's just the thing, right. Is, you know, TikTok is still half the size. To echo your point, it has absolutely, like, it got to a billion quite quick. Right. Like, I think about when Instagram, how long it took, if we looked back at the stat, I don't have it off the top of my head, but like, you know, how long it took Instagram to get to a billion users versus how long it took TikTok to get to a billion users versus, you know, I think like, we'd, we'd see it. It was probably quite quick. However, what are we, 8 billion on the planet?
- [13:23]
B
Yeah.
- [13:24]
A
Face. Meta has a quarter of that. The meta ecosystem has a quarter of that. That's kind of crazy. So it's still not nothing. Right? So anybody who dismisses Facebook, like, I'm just given like giant eye roll of the century. Like, of course there's still people there. It is definitely harder to market there. But like, they're spending time there. Whether we want to admit it or not. They are. But to your point, like, hey, this is a channel that has seen rapid growth. It's seeing really, really sticky engagement. It's created an experience that pulls people in and it's addicting. So I've learned so much about myself, how much I love power washing, time lapse videos. I like things I didn't know that I would like to learn about.
- [14:02]
B
I just love that the persistent meme across almost every comment page is, I build my FYP brick by brick because it's like the more random of a video you get, you feel this pride that, okay, I've spent. You know, like, if you, if you fire up a new TikTok account, it's like being on reels. Right. But you're like, I've been on this for two years and this is, this is where we're at. This is where my algorithm's at.
- [14:25]
A
Yeah. I mean, I think what's interesting is, is, yeah, the preciousness that people have around that. However, what I would also say that I've always found so fascinating about TikTok is how great of an experience it can create with such limited user input. So when we take a step back, when we think about Facebook, when we think about, you know, Twitter, Instagram, all these different platforms, historically, for them to build that experience, we all had to create an account. Then we had to, you know, I'm friends with Eric. I. I like the Vancouver Canucks, I like the, you know, Seattle Seahawks, I like Cats. You know, I went to high school with this person. We all hammered our information into that thing for years. Right. And then from there it was like, okay, that's how they're creating this experience. What's fascinating is on TikTok literally dwell time, how quick you're swiping past, how many times you're replaying and its algorithmic ability to take an assumption about you based on something that you're watching maybe two, three times and find something similar in a way that delights is wild.
- [15:32]
B
It is.
- [15:32]
A
Right. And so this is where why I bring that up is. I think we're going to start to see that impact things not only from an entertainment perspective but from a commercial perspective so much. Like, you know, I didn't go out looking for power washing time lapse videos, right. It found me. I think there's an ability, why I'm bullish on this is I think there's an ability for products to find audiences there and actually drive conversion in that way as opposed to just entertainment thing.
- [16:02]
B
I think they must have, they must have some sort of facial recognition going on if they're looking directly at my face and they know all like you can just see all the micro expressions. I was actually on, on a Danish information policy website one time and it actually overlaid an image of your face with like a thousand lines on it and it showed all the, you know, the tens of thousands of micro like numbers that were being captured about every one of your micro expressions. I don't know that TikTok's doing that for sure, but it's really interesting to think about how much you could actually glean from micro expressions on a face.
- [16:32]
A
I agree. I mean, I wonder. My brain just immediately goes with Apple and they're like iPhone, that's privacy and like the locking, like Apple logo. I'm like, would Apple even allow that? Or I'm like, is TikTok doing something? Do they have some other proprietary signal? Who knows? We could go on and on and on.
- [16:47]
B
They did pay a lawsuit. They paid a $92 million lawsuit. That was people that were using, yeah, the people sued them for using facial recognition software incorrectly. I just, just googled, there you go. So there you go.
- [16:58]
A
There you go. Crazy, crazy. Anyway, time spent. So this is just like a bit more detail in terms of like, you know, daily. So what we were looking at before was we were looking at time spent per session and then this is daily, right? So you know, again I go Back to, there's 24 hours in a day. One of those hours is spent on Instagram and one of those hours is spent on Facebook. One and a half of those hours is spent on TikTok and so again when you start to think of supply and demand here, right, there's only 24 hours in the day. And so yeah, Facebook, Instagram, there's, there's an hour there. But for TikTok to kind of like, you know, move, move them out of the way and be like sup nerds, I'm here. And for them to kind of get to the top of that, yeah, it's, it's, it's pretty impressive, right? And we're looking at this, this time frame is January of 2023 to September of this year. So you know, this is, this isn't just like looking back historically, this is like quite, quite recent and seeing that kind of grow. Yeah, definitely pretty interesting. So that's kind of on like the time spent side of things. I think in this case we're going to breeze through this pretty quickly. I'm not going to go into detail in every single one of these categories because I think you should definitely download the report and like dig into it. You know, it's 50 pages or something. But what I want to just show is kind of like what is included in this section is like a little bit of a teaser. So what we wanted to do is we wanted to dig into revenue by category as it pertains to TikTok shop. So in this case we kind of looked at all the different categories. The kind of like TLDR here is, this is looking at U.S. data, only 1.5 billion in sales in summer of 2025. And the top five categories contributed 58%. And so of those kind of top five categories, number one was beauty and personal care. Number two was women's wear and underwear. So I guess people like shopping on TikTok for their, for their undies. That's cool. Number three with was kind of health products. Number four was sports and fitness. And number five was, was phone and electronics. Now that's not to say that there aren't all of these kind of other categories, but the kind of key takeaway here is if you're in any of these top five categories, test this experiment with this. Yeah, like there, there are, there are shops driving serious dollars here. That's why we're wearing our green shirts today. Like there's money being made on the, in these categories in these platforms. So that was kind of one of the big key takeaways here in terms of sales kind of by channel here. Creators drove a ton of them. So that's kind of the name of the game here is if you are going to spin up a TikTok shop. You need to have creators be a big part of your strategy. And a big piece of that is like affiliates, right? And so I think the thing is, is like, if you're saying, hey, you know what, we're just going to try and spin up a TikTok shop and that's it. Just like put your product catalog up there and you know, put all your product display images and kind of like hands off. That's. That's. You're doomed. So when we say test this, what we're saying is, number one, create a shop. But number two, have a strategy to leverage creators specifically with, you know, affiliate links as part of your rollout strategy. Right. And so I think what was Also interesting is D2C brands accounted for just 7% of the kind of revenue. So focus on creators there. So when we were able to see in the data those sales, is it from a brand specifically or is it through a creator to a brand and through a creator to a brand. Like only brands specifically who didn't work with creators saw 7% of sales. Everything else was creator focused. Right. So I think that is another signal to us to go, hey, there is a need here for you to partner with creators and work with affiliates.
- [20:46]
B
I'm just. How does, how does that. Does the creator that host the shop itself or does the creator just direct to the brand's page? How does, how do. How does the affiliate actually work?
- [20:56]
A
Yeah, it's a good question. And I think that it probably depends, right? Like, I think it would depend on a specific brand. We've seen examples of it going both ways, right? So, and it depends on the product that's being sold. Right? So, so some, some creators are slanging their own brand and their own products. They have their own shop. Whereas some. The affiliate kind of piece would be, hey, you know, we're brand. I don't know, let's pick a random brand here. Lululemon. Let's say Lululemon has a TikTok shop. I don't know if they do. I just pulled a random brand. But like Lululemon has a TikTok shop set up. Is there a way that they're working with creators that are. Instead of saying, hey, click my affiliate link and come off to like my website. No, no, we'd rather have you be on the platform, create content on the platform, have our. And have the link be to our product on the platform.
- [21:45]
B
And yeah, I've talked about on this podcast a few times, but Tabs Chocolate grew a lot using affiliate TikTok affiliates, but as more like Mary Kay like partners in a way where the affiliate would actually spin up their own version like of, of like the Tabs Chocolate Store Seattle or whatever and would then create content. They had like dozens of these alt accounts that all had their own TikTok shops, which I thought was pretty interesting, super interesting strategy.
- [22:11]
A
And if you can govern that and.
- [22:13]
B
It works, test it 100%. The TikTok shops was such a big topic of discussion at this event that we did with C Suite because we had Brock Memosa there, who's grown that company frostbuddy to like 30 million plus and he's doing huge volume on TikTok shops and he was fascinated because one of the other guys there, uh, is doing a lot on TikTok shops, but specifically on the lives. I think though you talked about like the way people are actually driving. I think, I think if you're out there and you're, you're thinking about how to do this, go, go look at Frostbuddy. Like literally Brock just talks about why he built the product again and again and again in different settings. And it's just like it's, it's such a simple platform in a lot of ways because of how good the algorithm is. And so it really comes down to like just be willing to create content, tell your brand story over and over again and try some lives. I think that's. He was talking with this underwear brand that's on the, that came to the event that just does these lives where it's just sort of like, like qvr where you're selling your product, talking about it, shooting the shit and how important that has been to growth as well. So I just think, don't overcomplicate it.
- [23:18]
A
I completely agree with all that. We're going to talk about live streams a little later on. I have, we have kind of some more stuff on that. One of the things also is in the report you can actually click to view a lot of these examples. So anytime there's, you know, screenshots here in the, in the bottom, you can actually click and link out to see what we're talking about. So it's like, hey, you know this, this is doing 5 million views and it did, you know what, 100,000 in revenue. That's the one on the right. The one on, in the middle did 13 million views and did 338,000 revenue and sold 11,000 units.
- [23:50]
B
That's super cool. I didn't realize actually we're going that deep down into like Dollar figures, views. That's interesting.
- [23:56]
A
It's very, very deep. So what I would say is like that's why you should download the thing to just dig into that and you can click out and you can watch the content yourself. Right. And when you're watching that content, think about how it's produced, think about the way it's shot, think about the brief that they gave to the creator, think about all of those specific things. I want it shot in this way. Or literally cherry pick some of these examples and be like, hey, here's an example of what great looks like. And you know, totally go from there. So yeah, get into the details with this.
- [24:23]
B
I think you should also bring up your point that we talked about in the pre interview. I think here where we're talking about the affiliate programs. Talk about Lululemon and their approach to creators in general right now.
- [24:31]
A
Yeah, I mean I think it's really interesting when you a brand like Lululemon, I think they've taken a really savvy and sophisticated approach to working with influencers and creators. Right. So previously a lot of influencer creator marketing functions have been like, oh, we're doing this to like grow awareness, right. We're trying to reach a specific audience because we have our existing audience and we're doing that. But like this is a way for us to tap into a new audience through creators in that way. Lululemon treats creators and influencer marketing as a revenue generating area of their business, which is fascinating. So basically like they strictly approach things from a conversion perspective. So it's not like, hey, we just think this influencer is cool. We're going to toss them a bunch of cash, we're going to do a campaign with them and we're going to do that to like drive awareness and eyeballs and brand alignment. They're going, no, we want to partner with people because like we actually think that this person has influence. And I say, I pause there after influence. What does influence mean? We can get them to get someone to do something, right? What a concept, right? So do they actually have influence and can they push someone to go, hey, yeah, you follow me? And now you're actually going to click through and I'm going to influence you to buy something. And so I just think that's a really interesting approach from a huge brand that. I mean, Lulu does such a great job. But I just thought it was so interesting how they're like, no, no, like creator marketing and influencer marketing here is like a revenue generating thing from.
- [26:01]
B
Yeah, we don't Pay for post. It's just, it's just alignment where they have such, they're such a big dog in the space. They've kind of flipped the model on its head a little bit. Like, you come to us, if it's good fit well, and it aligns, then we'll both make money on it.
- [26:12]
A
Exactly. And what, you know, the classic Munger, like, like, show me the incentive and I'll show you the behavior. Right. So I think it's actually a really good job of like, they've built the infrastructure from a, you know, onboarding, payment attribution, all of those different things to be like, hey, we're gonna do this together. We're gonna build a long term partnership and we're both gonna benefit. And not in just like a, hey, you're gonna say you got featured in the latest thing. It's like, no, no, we want to cut you a check. Like, yeah. And we literally want you a check.
- [26:39]
B
340K. It could be pretty hefty check.
- [26:42]
A
Exactly. I don't know what the percentages are, but yeah, I like that.
- [26:46]
B
Yeah, that's cool.
- [26:47]
A
So, yeah, it's an interesting approach. So I think this sort of thing makes a ton of sense. So this is speaking about live streams. So this was crazy to me. So live streams drove a quarter of sales.
- [27:02]
B
That is.
- [27:03]
A
That's nuts.
- [27:04]
B
It does not represent a quarter of my time on the app, I'll tell you that. I'm swiping through lives as quick as I can get off them.
- [27:10]
A
Right. I think what was fascinating here is, you know, right now this doesn't exist on, on Facebook and Instagram. And I think, like, what you were saying a little earlier about, like, livestream. This is an old behavior.
- [27:22]
B
Yeah.
- [27:22]
A
Like, this is something our grandparents used to do. Like, our grandmother fully used to sit there and watch tv, Readers Digest and was like, oh, and then fill out the thing. Probably put a check in the mail, off it goes. And you know, so this idea of live stream shopping, when I kind of, when I first heard this and the team was like, yeah, live stream shopping. I was like, really? Like actually. And then you see the numbers and you're like, holy shit. Actually, like, keep in mind all of these numbers again, is just us in the summer.
- [27:53]
B
Yeah.
- [27:54]
A
Right. For this year. Yeah, this year again, we're talking $313 million in sales this summer in the U.S. that behavior, I just go, that is something that I wouldn't associate with, like, American consumers to do. But. But then I go, no, Charlie, you idiot. For 40 years. What did we do? We did that on television and we've.
- [28:15]
B
Been saying it's happened, it's happening massively in China. We've been saying for years it's going to be happening here. It is already happening here. What's interesting to me is there's no way that 30% of people's time on the app is spent in livestream. So that tells me that that's again punching above its weight in terms of like purchases. Right. It's a really great vehicle for purchases if it's totally.
- [28:34]
A
And it's probably a sit. Right. Like those are hot, the people that are watching live streams. So I think about the insight that jumps out to me is if you are running a TikTok account and if you are running live streams on those TikTok account, if that's part of your strategy today, but you're not selling a product, hey, it seems to me that people on live streams are willing to buy, they're willing to open their wallet, so why not try it? So I just thought that was crazy, you know. Now that's not to say that like, you know, digital storefront, as we can see in this visual, still is a decent chunk, almost 20% and over half is like shoppable video, like regular kind of feed scrolling. So but I was just like, that's crazy to me that livestream was that big. So yeah, we link out to a couple examples here in the deck.
- [29:20]
B
Nice. Like TikTok's first million dollar shopping live stream. That's wild.
- [29:23]
A
Yeah, so you can click out and see what that was like. So this is the category spotlight. So I actually misspoke a little earlier. This is, this is going to be the like detailed nitty gritty in each category. So what I'm going to do is I'm actually just going to go through one category, show the types of slides so that you can kind of see and then you know, if you want to download and go into your specific category, you can check it out. We did this for the top five. So the first thing here is just kind of like high level, what was the revenue percentage of total revenue, kind of number of shops that exist in the space, the revenue growth rate and then the average revenue per shop. And then it's kind of like products and stores and so we actually give examples here. So if you're in this space, like let's say you're in beauty and personal care and you're thinking about, okay, I want to spin one of these up. I'm listening to Charlie and Eric talk about all this stuff. You're slowly convincing me. But like, what does it actually look like? Go to some of these stores, just check them out, see what they're. Because here you can kind of see like what are they doing in terms of revenue? What's the average unit price, items sold, all of that, and then specifically products. So like in this one on the left, you know, it's go pure neck cream. Go watch some videos about how creators are creating that content. This is kind of like into the weeds a little bit for you to kind of dig into. But it can be really, really useful to kind of fuel your own kind of additional research.
- [30:43]
B
Hugely valuable. I can. I think this is going to be the podcast, the report that launches a thousand TikTok shops.
- [30:49]
A
Let's go, let's see. You and I need to be getting some of that affiliate cash.
- [30:52]
B
That's right.
- [30:53]
A
So instead of green shirts, we can be wearing like, like gold shirts.
- [30:57]
B
Yeah. Gold plated diapers.
- [30:59]
A
Gold plated diapers.
- [31:01]
B
That's from.
- [31:01]
A
That's.
- [31:02]
B
That's Christopher Walken from the Cowbell SNL skit.
- [31:05]
A
I'm in. I'm in. So, yeah, we have kind of category metrics at a high level. Then we also give examples of like the highest grossing videos. So again, click out, you can see what this content is like. And then we also kind of have what we call these production elements. So this is something that we do in a lot of, a lot of our content analysis at Right. Metric is it's one thing to be like, here are the top videos, like here's what performed. But what our team does is they go through and they go, okay, of the top performing videos, what are the production elements that they have in common? Now when we say production elements, what we mean by that is how is this video shot and edited and storyboarded and produced? So is it a selfie with a phone? Is it shot more high quality? Is it quick cuts? Is it one take? Is it multicam? Is it, you know, music, all of that sort of stuff. Like we get very, very specific because if you can start to isolate, hey, these are the top of the top 50 videos on this chat channel or this platform or whatever, you can kind of start to build a checklist. They all have these things in common. So make sure that when you're producing something to give your content the best chance at being effective, have these things in common. So this is just kind of. We do this for each category at a high level here and you can click in and we have kind of three examples.
- [32:19]
B
So this is gold.
- [32:20]
A
That's the kind of content, like nerdy deep dive thing. And obviously we're not going to go too deep because we'll let people get their own version and go as deep as they want. And then, yeah, we do this for different categories. Right. So it's basically category metrics and content. So what we're trying to help steer is like bridging the gap between that content and commerce, kind of, you know, separation. And the idea is to pull them together. Right. Can you actually ace content and have that pull people closer from a commerce perspective? So we do that for women's wear and underwear, we do that for health, we do that for sports and fitness, we do that for phones and electronics. And then there's kind of this one minute gist that I kind of want to dig into here. So I think the big thing that I would pay attention to here is obviously we have the kind of category breakdown of what's driving the most. What was fascinating was across all the top categories, no big brands are there. No big brands. Like that was crazy to us.
- [33:22]
B
That is wild.
- [33:23]
A
Yeah, there's a billion and a half dollars being spent here. Not a big brand in sight. And so I think this is like a huge, huge potential first mover advantage for if you're a smaller business. So just wanted to call that out. I just thought that was really, really interesting.
- [33:40]
B
Yeah, that's pretty rare.
- [33:41]
A
I feel like, I don't know, that's just an opera. It's a signal. Right? Like that's. And that's. I think the thing with this is like, there's no kind of right or wrong answer here. But we're just going like, hey, that was kind of shocking to us. Like when we looked through all of those kind of like top, top earning, top performing, we were expecting to see kind of like some familiar brands and we didn't really. And that was just really interesting. So that's kind of the one minute. Just from like the category side of things. And then in terms of like the production elements, a few things. Number one, the product name is rarely mentioned. And the reason behind this, our hypothesis is TikTok has super, super strict trademark rules. And so what creators are doing is they're redirecting viewers to links. So I thought that was kind of interesting. It's like they're not saying the thing out loud because TikTok's algorithm is going to flag that and the content can be pulled down. So that was interesting. The second thing was that video is just such a great way to build trust, right? I think about like, we've all gone to a product display page and cool, there's images and stuff there, but, like, show me somebody talking about it. And like, we've seen this on other platforms, right? Reviews have taken off, right? That's how all of the biggest YouTubers in the world exist, is there is. They're reviewing things and then I think the last thing is actually showcasing product usage. So don't just like, hold this and be like, here's, here's how I do it. It's like, no, no. If it's, if it's cream, put the cream on. If it's undies, model the undies, you know, whatever. So I think that that was just another thing from a production perspective is showing the product. So we're going to switch gears here. I want to talk about the, like, potential gotchas. So we've been kind of. Everything is rainbows and unicorns here. We need to kind of like talk about like the cautions before launching a shop. So first one is they are, they have zero tolerance for anything related to legal stuff, right? So anything related to trademark infringement, patents, like, all of that sort of stuff. And people have probably seen this across other platforms. It's driven by an algorithm. And so what that means is if you get banned or whatever, you're probably not going to be able to talk to a human. So that's, that's why we're like, hey, just like, be careful. Because, yeah, it's literally going to just be like an instant ban and like, you're done. So I think about what does that mean from a brand perspective if we're trying to spin up a shop there, like, you can't just like, cowboy this and like get after it and like, whatever. Because, like, it's not like you're just gonna like phone up TikTok and be like, please. Like, there's this context and nuance and blah, blah, blah. And like, I've had friends who have had to deal with that with meta locked out of their accounts and they're like, nope, bye, off you go. And you're like, holy crap. So that I think is a, is a big thing is like with the geopolitical landscape of all the stuff that's going on around TikTok, you know, they know they're a target. So they are, they are being hyper conservative to their business, which means like anything that could potentially put them in a negative light, they're just like zero tolerance. So that's that another one that was, was kind of interesting is US based shops cannot use international suppliers and so violations lead to automatic bans. So that's actually pretty interesting. Orders must shipped via US based carriers and match the addressed the address that's listed in the seller center. So again this is like as you're setting up, that's pretty interesting. And then this third thing that I want to call out is fulfillment deadlines. All orders must ship within three days or sellers risk penalties and bans. So this is interesting from like a experience perspective because like this is TikTok trying to be like an Amazon to be like people want stuff fast. Like what they don't want is a crappy experience. Hey, I saw this thing on TikTok, I bought it and I didn't get it for two months.
- [37:39]
B
Yeah.
- [37:40]
A
But I just thought it's fascinating that they're actually like enforcing it downstream because for them they might go, hey, we'll take the revenue, right? Like TikTok is going to take a slice of that. TikTok shop, you're, as an E commerce business, you're going to get that revenue. But they're like, no, no, no, no, no. What we don't want is someone to have a bad taste in their mouth from purchasing from our platform. So if you want to sell on our platform, you have to comply. And I just think that is like, that's really interesting, them taking a page out of Amazon's book.
- [38:09]
B
I love to hear it. I hate to bring this up again, but I only bought one thing from TikTok and it was a pair of weights that were delivered to me and they were baby rattles. So they're literally like little like baby rattles that were in the shape of weights that it was like, send me nothing. Like don't just troll me with these rattles. So I'm glad they've locked down, locked it down a bit. What is this?
- [38:30]
A
A weight pants?
- [38:32]
B
Yeah, exactly. Yeah, I use them all. That's why I'm so ripped. It's great.
- [38:36]
A
That's crazy. I mean. Yeah, we can see. We can see. Okay. Yeah, I kind of talked about this before but like just avoid trademarks, don't use logos, don't use names, images of competitors, brand. Like don't do any of that stuff. That is literally just asking to get absolutely clapped by the algorithm. So that was like a really interesting one. And then also be vague. So successful creators, they're kind of describing products more generically. They're saying like this product is life changing and they're not also making these claims be like, this is the number one, blah, blah, blah, blah, blah. They're just saying like, hey, this has kind of been my experience. And it seems to be that TikTok is kind of promoting this kind of like brand free content. And so this idea of being vague, which from a sales perspective, I think some people are like, no, no, like buy now. Like buy now. But it's like it's, it's almost like dating, right? Like, where it's like, hey, if you just create a great piece of content, it doesn't even necessarily specifically have to be like. And here, buy now, like, it's like it's Wayne's World with Mike Myers standing there with like Doritos and like Pepsi and all that. This idea of using it from like a review perspective, but then bridging the gap to commerce is very, very powerful. So that was just kind of like another potential gotcha there that we wanted to kind of highlight here. And obviously there's more detail in these slides that you can dig into to get specific. But I think like the overarching narrative is like, proceed with caution.
- [40:08]
B
Yeah, but proceed, but proceed or get your lunch eaten just because there's so much opportunity here.
- [40:14]
A
Totally. So, yeah, we're getting close to wrap up here. So kind of key takeaways, like, what's the tldr of this? First and foremost is if you're in one of these top five categories, there's a huge amount of cabbage money generated here. If you are in one of these categories and you're not thinking about this, you should. I'm not going to tell you what to do, but you should at least think about it. The second thing is if you're going to launch, work with creators and specifically work with affiliate creators. You know, it's 75% of the revenue. An affiliate strategy is essential. The third thing is live streams matter. A quarter of the revenue was coming from live streams. Right. We've been exhibiting this behavior for the last 50 years. We did it while watching TV. It's the same thing. It's just happening on this device. So those are kind of the three first kind of big key takeaways and then the kind of remaining ones. TikTok isn't just for the kids. 41% of TikTok users are over the age of 35. Right. And so like brands can kind of target all, all age groups. And they are spending the Audi. The TikTok audience is spending an ungodly amount of time on the platform. They are spending so much time. Fish, where the fish are. I cannot say it enough. This is just a platform that is really, really interesting and it's still early days, right? Like there's still only rolling it out in certain areas. So if you happen to be in one of those areas, there's a ton of potential for you to have a quick win here.
- [41:46]
B
And even if you're in ones, they're not like Canada, there are workarounds, you've been talking about it with, with Dave on the pilot house side and there's workarounds really where you're just using the ad tools because you can still access it all through the ad tools. Essentially you can access TikTok shops, but you just can't experience the shop when you're not in Canada. So you can just use, you can also use VPNs to, to handle that aspect of it. But it's incredible opportunity and I really think this top five videos creator videos from each category is like the real gold for active operators in this place that can just go and scan those and synthesize something, you know.
- [42:22]
A
Totally. And so I think like in this again, each of these are clickable on this like last key takeaways page. So like click in start to get a flavor of like, what is that? There's a lot that can be learned there. And I completely agree. Like, I think, you know, it's one thing here for me to yell at you with a bunch of data to say like people are spending time here. I mean, I hope that now after showing you this, you're like, okay, we can agree that the sky is blue and that like people are spending time there. I think to your point where the rubber meets the road is how am I going to activate this as a marketer, how am I going to activate this? And actually where does the rubber meet the road? What kind of content am I going to create? And the good news is we've included a bunch of examples in here. And then even more it's like, okay, well what type of SKUs tend to do well by category? We've included that in here. So like all of these sorts of things that like, these can be a lot of inputs and like literally test with some of those things. Like that's kind of how you can, you can get started. And so just kind of last slide here is we just kind of have an overview of like where all the data is from. It's from a bunch of different places. And yeah, they'll be able to download this kind of wherever. And I'M sure that you're probably going to get a bunch of emails with questions and yeah, I. We're always happy to nerd out on this stuff.
- [43:31]
B
Yes, you should follow Charlie, I guess on LinkedIn. Is that where you're, maybe you're acting.
- [43:34]
A
Yeah, link. LinkedIn is where I'm most active.
- [43:36]
B
Yeah. Because this is going to be an ongoing thing. I think. We're super excited to launch this report and we'd love you to hit us up with any questions you can. You can email me or LinkedIn me or whatever along with Charlie. And I'd also love to know like, what else you'd like. Like the D2C listener. First of all, you can always go to rightmetric.com if you actually want to spin up some of your own custom research. I think that's a cool opportunity for people in this audience. But if you want to hear another D to C. Right. Metric report, then email us and let us know what you want us to cover. We have ideas about covering how people are using AI. Forget maybe TV is always interesting. The sky's the limit on what you guys can dig up though, I guess.
- [44:19]
A
Yeah, there's a whole bunch and I think that's the thing. I always use the analogy of, okay, we're a restaurant and we have this pantry full of ingredients with all this data and then it's like, okay, well what, what is interesting for the audience? So yeah, if you're listening to this and you have an idea where you're like, oh, I would love it if you, if you could dig into this. This is something that we're going to be doing on an ongoing basis where it's like, hey, we go deep in something, uh, we record a pod about it. We'll send, you know, you can download the kind of full thing. Um, so yeah, I think we're, we're always keen. TikTok Shop was obviously one that I think was, was low hanging fruit, top of mind. But yeah, we're always looking to dig into things so hopefully the crew likes it.
- [44:57]
B
CO man. Well, thanks for coming on today and we'll catch up again soon.
- [45:00]
A
Sounds good. Thanks for the time.
- [45:08]
B
Thanks so much for listening to today's episode. If you're not a subscriber to our newsletter, you can do that right now at Direct to consumer all one word co. I'm Eric Dick and this has been the D2C podcast. We'll see you next time.