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- [00:00]
A
Hi, I'm Patrick Naminsoon from TikTok and you're listening to the CPG Guys Podcast.
- [00:08]
B
Hello and welcome to the CPG Guys Podcast. Set at the intersection of commerce and tech, your hosts Sree Rajagopalan and Peter Vs. Bond explore how brands and retailers engage consumers in a digitally driven world. And now, here are the CPG Guys.
- [00:28]
C
Hello and welcome to this episode of the CPG Guys. We're live at Shop Talk in Las Vegas in what I would now call PETA residency suite. Because what is this?
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B
Are we officially in residency?
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C
I was just here like a month ago for ces.
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B
Are we officially in residency? I mean, are we bigger than like Donnie and Marie?
- [00:44]
C
Is this big? Five, six, eight times Celine Dion is the goal?
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B
Celine Dion. Ms. Celine Dion.
- [00:49]
C
Two decades plus, right?
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B
Yeah.
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C
And then I feel like we're here almost every month for some reason. We're doing our usual favorite thing programming while being at a trade show with industry's key leaders. I'm of course Sree, your co host and also crown co founder of ThinkBlue Consulting, your trusted partner in your omnichannel development journey. Get in touch with me at sri@thinkblueconsulting co and do listen to my older daughter's music@www.rearaj.com. follow Lara Raj. My younger daughter is a member of the world's fastest growing global girls group, Cat's Eye. Just coming back from the Lulapalooza 4 city tour of South America. We're headed to Coachella in a month's time. Can't wait. Riya and I will probably be headed to India for an NBA thing shortly. And I'm joined today by none other than my co host and co founder, pvsp, who also moonlights as head of industry and client engagement at Flywheel, the commerce acceleration division of Omnicom back in Vegas. But this is an important week for you and me and it has nothing to do with Cat's Eye. It has nothing to do with Vegas. What's going on?
- [01:50]
B
Well, now that the World Baseball Classic has concluded, it's signifying the beginning of the Major League Baseball season as my Dodgers go to achieve the three peat, three in a row. And the Yankees hope to win their first World Series since 2009.
- [02:05]
C
Keep saying that because we have 27 championships and the Dodgers are still making their way to wwe.
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B
Still playing that number.
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A
Shriek.
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C
And then I'll keep coming back and telling him. It's like saying Brady's not the goat because he retired seven years ago.
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B
Just keep going make up your mind.
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C
Make up your mind.
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B
I'm going to go with we're going
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A
to win our third World Cup.
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C
I'm winning this argument.
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B
No, you're not. I've got two World Series and one more come in 100 years.
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C
You got two.
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B
Backie Robinson, greatest player in the history. History of baseball. End of the discussion.
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C
Nice try.
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B
Go ahead. Now wait a minute.
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C
Let's go to.
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B
Let's go to the judges. Sorry, they gave me the call.
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C
Aaron Judge create a sitter to exist.
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B
Shohei Otani. That is the end of the.
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C
He's got two years in the major league.
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B
Shohei Otani pitching. Kidding. Two time mvp and he's got more than two years.
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C
Let's see how long the darm lasts. But in. But in any event, of course, make sure you're subscribing to our podcast on your preferred listening platform where you can get our latest episodes even go back to consume some of the 580plus episodes we've already published. Now let's see who our guest is. Today we're joined by a seasoned digital strategist and corporate leader. Patrick currently heads strategic initiatives for AMs in Europe. E commerce at none other than TikTok. Paparaj actually has followers now on TikTok.
- [03:24]
B
Are we talking about ourselves in the third person again?
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C
Sri who's paparazzi from nowhere to 160,000 in six months. That happened fast. Of course, our guest careers span steering UK e commerce, guiding global product strategy, shaping public affairs for a global tech portfolio including musical ly which of course you might even say. I know, but I had to break it up.
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B
I know.
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C
So I have to have that conversation. Peter With a penchant for turning market insights into actionable growth, Patrick helps brands and platforms navigate multiple market challenges and accelerate impact in today's connected economy. To break it all down, welcome. We're thrilled to welcome Patrick Normanson from TikTok. Hey, welcome to the CPG guys. How you doing?
- [04:09]
A
Thank you. Yeah, it's great.
- [04:11]
C
How's it to be in the dry dessert? And where are you headed for? Down into Vegas from?
- [04:16]
A
I am coming from Seattle, which is the very opposite of dry at the moment.
- [04:20]
B
Nice and wet and overcast.
- [04:22]
A
Nice and wet.
- [04:23]
C
Awesome. So thanks for joining us on the show. In the digital liner notes of this episode, we'll of course include links to your LinkedIn profile, your company's corporate website for our listeners to access while we go on with our conversation. So Patrick, I'm going to jump right into it and I'm going To go into what I call shoppertainment evolution. And what that means is, you know, we've heard you be Vocal about how TikTok shop is discovery led commerce, where shopping starts with inspiration, not with intent. In 2026, reports by others have estimated there are over 80 million US shoppers on the platform. How do you preserve that sense of discovery at such a big scale? That 80 million is no joke.
- [05:03]
A
Yeah. The growth of TikTok and TikTok shop in the US has been incredible. And we now have a community of over 200 million users just in the US and what we're seeing is that discovery and discovery e commerce is really driving the next chapter of e commerce growth. So within E commerce for the past many years, everything has been very search driven. You have in mind what it is you're looking for. You open up your favorite browser retailer, platform, you search for size 11 men's black running shoe, and it's effectively a warehouse search.
- [05:39]
C
Very well said. A warehouse search. We will remember that.
- [05:41]
B
Very cli. Well, you might even say very clinical.
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A
Yeah, very clinical. And it's very efficient, but very transactional. And there's some bits and pieces of discovery sprinkled in there. Right. Some ads. Right. And it's also promoted listings. You might discover something new.
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B
It's also very much determined by the user's ability to actually describe what it is that that they're looking for.
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A
Right. It relies on this assumption that there's intent.
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B
Yes.
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A
And with this and with discovery e commerce, it's not like that. It's much more like walking down the main street in your favorite little town. Right. You see a lot of nice little boutique shops. You do some window shopping. Something in the corner of your eye is like, oh, that's cool, I want to go have a look. You go inside and the passionate shopkeeper explains to you the latest trends and gives you recommendations about what he or she thinks might be a great fit for you, a great style for you. Gives you some, you know, in person demonstrations about how to use this cosmetic or, you know, how to dress.
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B
The credibility you give to that person recommending it is very strong because you feel a connection.
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A
And TikTok shop brings that back in a digital way.
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B
Okay.
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C
You know, a few months ago we had ajay Salpaker from TikTok shop on the show. Was it six months ago?
- [07:02]
B
Yeah, about that.
- [07:03]
C
Give or take. We did have a deep discussion on the shop aspect alone, but I spend, I don't know, two hours on TikTok every single day now of Course I wear other hats in addition to being CPG guys and I'm also looking at my daughter's creative content and other digital creators all the time. But I think I'm shopping on TikTok shop almost daily at this point personally.
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A
That's correct.
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C
We gotta get that old guy over there caught up.
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B
You think I'm not? You think I'm on TikTok Shop all the time?
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C
I know he's buying stuff for his daughter all the time.
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B
It's mostly for my daughter.
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C
Unicorn.
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B
Anything that has unicorns or K pop demon hunters on it, I'm probably going to buy for her in any event. Patrick, welcome to the show. There is a perception that TikTok Shop is driven by viral one off purchases. But from what Sharia and I are now seeing, brands are building repeat purchasing behavior and even long term customer value tools. Are TikTok shop providing for brands to move from kind of that viral moment to actually sustainable brand loyalty.
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C
I want to give you two examples of viral moments that were very real in the industry. We come from cpg, right? One was we have a guest on the show frequently, Wall street analysts, Nick Modi from rbc, he comes by, he talks about how Coca Cola could have could have done merchandising along with protein because some kid on TikTok, a creator actually decided to put protein powder in Coca Cola and it just took off and people were running to the store the very next minute or ordering online, whatever and were buying protein powder and Coca Cola mixing it up. But the idea there would have been for Coca Cola and a protein company to co merchandise it.
- [08:45]
B
They make core power which is their pork protein milk beverage.
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C
Peter, Coca Cola didn't seize the moment and talk about that particular product. General Mills had this with the fruit roll ups and ice cream. Some creator on TikTok decided to combine the both and it just took off. And I remember when I was at General Mills we sold out a fruit roll ups for the next three months. Inventory and stock was gone and it was out of stock.
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B
So back to the question.
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C
So I'm coming back to the question that Peter just asked today. We feel that viral moments is everything tell us otherwise.
- [09:21]
A
Yeah, I think this thought that TikTok Shop is designed for these viral one off moments and sort of like one off activations is quite outdated. And certainly we're familiar with the viral moments that brands have had both small and big. But we're also now seeing brands successfully build repeat purchase behavior and have TikTok Shop become part of their daily revenue generation. There's a few tools or aspects that have really enabled brands to embrace that opportunity. The first thing is around this real time feedback loop that brands have with the community on the platform. Through engagement with comments, live stream session feedback from creators, brands see what resonates with users in real time and can take that information and incorporate it into their product development strategies and their go to market strategy.
- [10:20]
C
So the tool actually gives them the data.
- [10:23]
A
Yeah. So by leveraging that, it's much more than a, you know, one off viral moment. It's something that builds and is continuous. We've also released some new product features. There's one in particular, product subscriptions which launched I think in December, just a couple of months back and it's been very successful in our health category. Shoppers can subscribe to their favorites, receive discounts, have flexible delivery options and it really creates convenience for the customer and of course great for the brands to drive their.
- [10:55]
B
Once they're opted in, they tend, you know, the opt out rate is fairly insignificantly low. So there is a incredible long term value to that solution.
- [11:04]
A
There is, and the third piece is that the creator community, the affiliate community as we call it on TikTok shop has grown incredibly strong since, you know, the, in the last year. And so currently we see that there's over 20,000 creators on TikTok shop in the US that have, that have over six figures sales last year. So, so we've moved beyond this moment where you know, creators are doing this as a, you know, fun side project, you know, trying to sell lively. It's their livelihood. Right. And so these creators are supporting the brands in their journey to drive major revenue on the plat. And these creators are really becoming entrepreneurs themselves, you know, becoming very familiar with the products, who is it good for, you know, the ingredients, et cetera.
- [11:53]
B
And that's. There is a tremendous value for the creator to do that because it helps them become more appealing to brands that are looking to leverage their creative abilities. When they understand and they can actually play to what the brand is looking for, the likelihood that they're going to be included in whatever campaign they're doing increases substantially.
- [12:12]
A
Yes, yeah, absolutely. And you know, TikTok is really this cultural center. Right. In many ways it's where culture starts. So there's always opportunities for these brands to engage with the community and be part of the discussion.
- [12:26]
C
You know, we have a discussion at home all the time because music, family, that if you want to have the next streaming hit that's not going to organically happen on Spotify or Apple Music. It has to become a TikTok anthem, if you know what I'm saying. For reals. But I do have a question on the TikTok shop aspect. So should the CPG guys actually be selling on TikTok then?
- [12:46]
A
What do you think? Yeah, absolutely.
- [12:49]
C
Peter's got one of them today.
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B
It's pretty classy, isn't it?
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C
That's how we're going to make our.
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B
Okay, I think this is our future tree. We do need to. We seriously do need to figure out
- [12:57]
C
what our TikTok shop strategy weak right now. So we got to figure that out. But with Patrick coming, we can't disappoint him. So you Talked about the 20,000 creators making their livelihood. So I would bucket them into huge stars. They have a followership probably in the millions. But your data shows that micro influencers often have 2x the engagement for CPG brands. So how is TikTok shops affiliate model with these content creators evolving to help a big brand like PepsiCo? You know, another example is the flavor swap chips.
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B
Right.
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C
Manage multiple micro creators of scale without a massive manual headcount.
- [13:36]
A
Yeah. So the surprising thing is that many of these creators who are driving big sales actually don't have hundreds or hundreds of thousands or millions of followers. In fact, there's a lot of very successful creators who have far fewer followers.
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C
Is there a minimum threshold you'll think of where you think it's going to be successful?
- [13:56]
A
Actually, no. It's much more about the creator's quality, passion, how they show up, how well they understand their. Their community that they're part of. This is much more important than how many followers they have.
- [14:11]
C
So with the CPG guys, how many followers do we have? Peter, I'd be you guys on, on,
- [14:16]
B
on TikTok followers if that.
- [14:19]
C
We don't have a strategy yet.
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B
We need to.
- [14:21]
C
We've got a shot.
- [14:21]
B
We have a shot.
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C
We got a shot.
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B
We could. We could be contenders.
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C
We could be contenders. So. So essentially, to be successful, you don't need a massive follower base. Is it just the engaging content that makes you successful and then the base comes over time?
- [14:36]
A
Yeah. I think for the creator to be successful, they need to understand the audience that they're talking to. And for the brand's perspective, they need to be working with the creators who understand the audience that they're targeting.
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C
Don't help brands understand and say and kind of coach them. These group of creators or these names are ideal for the audience you're looking for for your campaign.
- [15:02]
A
Yeah, absolutely. So It's a combination of both our teams working together with these brands. But then we also have a large and growing suite of tools available in the seller center for the brands so that the creators that the brands could be working with. Right. Are surfaced for their review and for their action. And I think a great example that I recently saw is there was this nurse, she was coming off her shift, very long night shift in the emergency room. And she was in New York City, it was freezing cold and she was saying the air is so dry in the emergency room. And she was sitting in her dark, cramped car and she's applying. She was talking about this, this, this cream that she's been, this lotion that she's been using on her face. Right. And she's like, my skin used to be like so dry and now like, I don't have to worry about it. Right. It's, it's so real.
- [15:53]
B
It's authentic. You sense that.
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A
You sense it. Right. And this creator, I think she had like 12,000 followers. A video like that will be much more effective than a brand paying maybe hundreds of thousands of dollars to work with, you know, big celebrity with who's wearing like, you know, the white clinical coat. You know, talking about some pop star
- [16:14]
B
celebrity, you're not really thinking that that's someone who deals with dry skin issues in an emergency room. And yeah, very different.
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A
And so this authenticity that this micro creator is able to deliver just can't be matched.
- [16:28]
B
Okay, I want to talk a little bit about live streaming. This concept of live shopping is often seen as being a very Asia first behavior, but we're actually starting to see strong adoption here in the U.S. from your perspective, what's different about how U.S. consumers engage with live and where do you think there is a big opportunity for brands in this space?
- [16:50]
A
Yeah. So we see that 76% of users who engage with TikTok Shop Live make a purchase.
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B
Wow. 76% of people who engage with TikTok Shop Live actually convert.
- [17:07]
C
That means the users, when they come to a live already are coming with intent.
- [17:12]
B
They're coming with interest. It may not be the intent to buy a specific item, but they're open to it.
- [17:18]
C
They're coming with an intent. I want to see, and if it's great, I'm going to buy it. Like, you don't have to push them that hard.
- [17:23]
B
Okay.
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A
Yeah. And because that live stream is surfaced to them in their feed. Right. Based on their interests. And so it's contextual. It's contextual. And so the conversion and the Efficiency of the format is incredibly high. Right. And the format itself enables the brand or the creator to demonstrate the product. It's like the shopkeeper, Right. That we were talking about a few minutes ago. It's like you're going into the shop and the shopkeeper is explaining to you the latest, you know, product releases, who this skin serum or you know, this skin serum is good for based on the ingredients and what problems it might help tackle. It's interactive. You can engage in the comment discussion. So the format is just so innovative and allows the brands to build that connection with the consumer that they simply can't on other channels.
- [18:17]
B
Interesting.
- [18:17]
C
That is pretty awesome. Peter, thinking about. So you know we talked about discovery, but traditional e commerce starts with search and intent. TikTok Shop starts the other way with discovery and inspiration first in traditional funnel
- [18:32]
B
it's much more upper funnel than it is more mid to lower funnel.
- [18:35]
C
Very much with some exceptions like the live that we talked about. But even live starts with inspiration still
- [18:41]
B
very much middle to operate.
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C
How should CPG brands rethink their entire go to market strategy in a world where consumers discover versus search?
- [18:50]
A
Yeah, it's a great question and a lot of brands are thinking about this to not only design their strategy for TikTok Shop, but oftentimes redesign their whole like team and organization structure to be able to support this new way of driving revenue. Right. And so there's three specific things I think that brands commonly need to realize. The first thing is, you know this concept of the brands being in over control of their brand. Yeah.
- [19:22]
C
It's large typically.
- [19:24]
A
Yeah. You know that they'll have their 150 page brand guideline that goes down to the detail about, you know, the do's and the don'ts. And I'm not saying, you know, that's obviously very important. Right. Not saying get rid of that, but I'm saying we need to move from the sort of very polished advertising to cultural participation.
- [19:45]
C
Yeah. We think that format is outdated by the way here on the CPG guys. Completely outdated.
- [19:50]
B
Yeah.
- [19:50]
A
A lot of brands though, you know they'll, they'll produce an ad and, and every frame of the ad is like focus grouped. Right.
- [19:58]
C
It's very old school and it's a shift for risk aversion.
- [20:02]
B
It's an ad that is not. That is the problem is that too many of them are not about actually growing their brands. It's to sri's point, it is about risk mitigation.
- [20:11]
A
Yeah. And it's to be successful on TikTok Shop in order to engage with this community. You still have your standards, obviously.
- [20:17]
B
Sure.
- [20:19]
A
But you're shifting, you're updating from that very polished way of advertising promotion to this sort of community participation and cultural participation.
- [20:29]
B
Do you see it as still being in some brand cases an issue of their reticence to yield any of the control on the messaging and what resonates to consumers, to the creator? Because I mean, you go back 10 years and I think that most of the brand managers looked at what was, what was coming out on social media and they were trying to play the whack a mole game like, no, no, that's not my message. Is it not better for them to actually listen to what these influencers are doing and what resonates with the consumer to say, okay, that is actually how people are using my product? I should probably play that up rather than trying to push it down?
- [21:10]
A
Yeah, absolutely. Because the conversation about your brand is happening on the platform whether you're there or not. And so increasingly, brands are realizing that they need to be there, they need
- [21:22]
C
to be fancy to swallow that pill that the conversations of the brands are taking place in TikTok whether the CMO has an account or not.
- [21:29]
B
Yeah, exactly.
- [21:31]
C
Which is a favorite pet peeve here. We tell CMOs we don't expect you
- [21:36]
B
to post things on TikTok Shop, but if you don't have it on your device and you're not paying attention to what's going on, that is a, that's malfeasance in our, in our opinion.
- [21:46]
C
You hear some nonsense on security and this and that.
- [21:49]
A
And very related to that is this concept that the brand is the only storyteller of their product. And so with it, you know, with TikTok in the US we have a community of over 200 million users. Right. And so the smartest brands are building with the community using the creator feedback, the comments, the real time responses to shape their trajectory. And so it's not only about the brand's voice. Right. It's about the community's voice about your product.
- [22:18]
B
You know what I love about that stat? The 200 million SRI that says that there are more people in the US who use TikTok than don't use TikTok.
- [22:24]
C
So I'm going to test your knowledge. Who has the Most followers on TikTok in the world? Well, it's not a big tough one to guess.
- [22:31]
B
I have, I have no idea.
- [22:33]
C
Guy called Khabilim really in Africa, highest followers.
- [22:37]
B
What you're, we're going to, you're going to have to educate me on why he he's earned that particular.
- [22:42]
C
All right. And then Charlie d', Amelio, whose parents are appearing on what podcast, the CPG Guys who advertise their new brand.
- [22:50]
B
That's right.
- [22:50]
C
So reminder to our audience, we're speaking to Patrick Melmondson from TikTok and I'm not kidding, guys, Charlie D' Amelio's parents will be appearing on the CPG guys to introduce the new brand portfolio of the Emilios.
- [23:02]
A
Okay.
- [23:02]
C
By the way, between both sisters, they
- [23:04]
A
have a brand portfolio.
- [23:05]
C
Yes, between both sisters. If you add both the following, they are number two on TikTok after Cobielm.
- [23:15]
B
At the CPG Guys, we're excited to partner with today's sponsor, Confido. Think about how many different workflows your team is managing right now. Your sales team is planning promotions in a spreadsheet. Your finance team is manually managing deductions from a dozen different retailer portals. Your ops team is building forecasts in a totally separate tool. When something changes, a promotion shifts. A big deduction comes in. Nobody finds out until it's already a problem. Most CPG brands are running these processes in silos. And the cost isn't just time, it's the decisions that don't get made or get made on bad information. Confido is the end to end platform for CBG operations built specifically for for brands to run all of it in one place. Trade promotion, management, deductions disputes, sales forecasting, demand planning, and retail analytics. When your trade events are connected to your forecasts and your deductions are automatically matched to your promotions, your whole team is finally working from the same picture. Over 200 CPG brands, including Olipop, Bear Bells and Simple Mills are already use it. Go to confidotech.com cpg guys to learn more. That's confidotech.com cpg guys
- [24:42]
C
so anyway, Peter, over to you.
- [24:45]
B
Yeah, so obviously CPG brands love investing on platform advertising on platforms like Walmart and Amazon because they have such huge scale. Those are big marketplaces. But it's more than that. They have also developed very deep closed loop measurement solutions because increasingly it's about actually being able to prove that this investment delivered an outcome. So my question to you is, how is TikTok shop closing the gap to show a CPG brand manager exactly how a viral video on Tuesday led to an actual even an in store purchasing a physical Kroger store on a Friday? Like what is that connection? So that they can start saying, oh, this is as important as what I'm doing on mid to lower funnel on an owned and operated site and investing on, on big marketplaces.
- [25:35]
A
Yeah, so we're seeing that success on TikTok and TikTok shop does not stay like on TikTok shop has a halo effect and there's, and there's a huge halo effect and so it drives demand across every channel whether that's the brand's dtc. There are other e commerce platforms in store and so we are working on various suite of tools to enable brands to better measure that. So for example, just recently TikTok shop we launched a off site performance capability in the seller center that helps merchants measure how TikTok drives sales beyond the platform. And so they can use pixel based purchase matching within their own custom defined attribution windows and periods to give the sellers a clear view, very tactical, a clear view of how TikTok's impact is driving sales on other channels. And we're continuing to work on further tools in that space. We have some recent TikTok marketing science studies that show that 2 in 5 users who discover a product on TikTok actually go to a physical store to buy it. Right. And TikTok drives two, six times more offline conversion and 1.8 times more online conversions than all other media channels. And so one recent example here is Fenty Beauty. So they measured up to a 6 times lift across all other channels with 1/3 of those sales from net new customers. So it's not only a driver of revenue just generally, but also new customers. Right. Which is a key goal for a lot of these businesses.
- [27:09]
B
This just reinforces what SRI and I have been saying for years now, which is that we are now in a world where 100% of all omnichannel purchases are are influenced to one degree or another by digital advertising. And this is just the metrics of proof behind our argument.
- [27:26]
C
Yeah, Fenty Beauty is a no brainer for me, but I think the large brands, especially Food and Bev, I don't think they still get the platform.
- [27:33]
B
They're not there yet.
- [27:33]
C
Creators.
- [27:34]
B
They're not there yet.
- [27:35]
C
But who's to blame, right? Not that we're playing blame game here. It's outdated CMO thinking from going to a NBA 5104 class at a Wharton or a Harvard or the Ivy training wherever, which tells them the four P's are the only thing that matters. Meanwhile we've got this whole digital creator economy which is influencing product purchases in spectacular ways. But Peter and I will say it's A chance for the smaller brands, the ankle biters, it's their heyday. Have fun guys while you're at it. That's what I would say.
- [28:05]
A
Yeah. So these brands are, you know, first and foremost investing on TikTok shop because of the revenue that they're driving on the platform. But this halo effect is just such a massive benefit that's totally incremental to
- [28:19]
B
that I would also, I want to add on to this and kind of emphasize, is important to understand that TikTok is a very powerful channel. But it's also important to understand, and this is some of the discovery that brands have to understand what parts of their portfolio are positioned to leverage the TikTok shop experience. Both from a margin structure, a price point there, there's a whole lot that it, it's not like you throw any product in your portfolio and say it's going to do really well. I'm sure you can sell it. The question is, can you profitably sell it? So there is some element of discovery in terms of what is right for a, in a brand's portfolio that, that will work on TikTok shop.
- [29:01]
A
Yeah. And as TikTok shop is becoming a bigger and bigger e commerce platform in the US and users are increasingly coming to the platform also with intent. And so last year in the US there was over 103 billion e commerce intent searches on TikTok shop. Right. One, which is massive. And so it's not only discovery. Right. Users are coming to discover, of course, to be inspired, to have fun, to seek joy right on the platform. But then because they're in this shopping mindset, they're increasingly using the platform for those everyday purchases as well. And so to your point, you know, there, there is a merchandising strategy, right, in terms of which products are the products that you're going to use to, you know, launch on the platform and work with creators and have a big content strategy behind. But then, you know, there's also Shop tab and there's also search, which is great for those everyday products too.
- [29:59]
C
You know, I personally, I'm obviously a sample of one, but I personally use TikTok every day for inspiration and discovery. I bought a black.
- [30:08]
B
I know you. How many text messages do I get from you with a TikTok video attached to it? And it starts almost from the, from 7:00am Pacific Time until after I've gone to sleep on the East Coast. I'm still getting videos from you.
- [30:23]
C
I just, like I said, I just bought a black DNA at this point. So others are Starting, I think very early to understand this plot of digital creators, social feeds, things of that nature we've seen recently. Amazon and Walmart have their own social feeds. We don't believe it matches what TikTok has by any means, but what is its special moat that TikTok has that a legacy retailer can never replicate, no matter what they do on social features?
- [30:50]
A
So TikTok and TikTok shop is entirely built on discovery, on community and creator storytelling, as opposed to this warehouse search first approach.
- [31:01]
B
If you think about those marketplaces, they were built for spear phishing.
- [31:05]
C
Do you see a T shirt?
- [31:06]
B
People go there knowing what they, they come with intent and they know what they want to buy. That's a fundamental shift.
- [31:12]
C
T shirt coming Peter, tell me what that means. Oh,
- [31:17]
B
when particularly poignant and pithy comments are made on the CPG guys, we like to put them on T shirts and then credit them and wear them.
- [31:25]
A
So you.
- [31:26]
B
So I, I don't be surprised if
- [31:27]
A
you don't be surprised.
- [31:28]
B
You see pictures of the CPG guys wearing. We will give you credit. We won't, we won't. We, we won't pay you any licensing fees, but we will give you credit. T shirt.
- [31:36]
A
Yeah. So unlike other platforms, really, culture and community starts on TikTok and it converts on TikTok shop. And so the products are demonstrated, validated and shared inside this cultural and community context in real time. And that combination is just impossible for search first platforms to replicate.
- [31:58]
C
Okay, I think Amazon and Walmart are going to struggle a legacy retailers, period. I don't want to name that wasn't,
- [32:04]
B
but that was not the intent of their being built.
- [32:07]
C
And you fundamentally shift, right where
- [32:11]
B
it's a fun, it's a, it's a paradigm shift in why people go to that marketplace. It's, it's not intuitive.
- [32:18]
C
Search.
- [32:19]
A
I won't forget that Search.
- [32:20]
C
It's like in here.
- [32:21]
B
I want to talk a little about the R and D engine. We're hearing more brands described TikTok shop as a real time test kitchen for product development. Can you share how brands are actually using the platform to test, iterate and scale products faster than what they do through traditional retail cycles?
- [32:40]
A
Yeah. So brands are certainly increasingly using TikTok to drive their product development and go to market strategy, receiving instant and real time feedback from the community about what sorts of products they want, you know, what sort of flavors do they want, what sort of challenges and problems, you know, do people have in their everyday lives and, and what new products can be made to solve those informal Focus groups in form of like real time focus groups.
- [33:09]
B
Real time.
- [33:09]
A
Whether that's a live room, right, and you're talking to potential buyers, whether you're engaging in the comments or whether you're hearing from creators, right, who going back to the point earlier, really understand their audience as well. And so, you know, there's this process that's being created and the best brands here are launching products, right? They're watching the real time response, they're iterating and they're scaling and they're able to do that much quicker than they can if they're rolling out products to a shelf in a store.
- [33:40]
B
And I have to imagine as they go to other channels to introduce these products that have been conceived and tested in TikTok shop, that they have metrics to then share with some of the other marketplace partners of ours, say here's what it did on TikTok shop, that has got to accelerate the adoption process for getting those items listed in distribution on their marketplace.
- [34:02]
A
Yes, they already know what works.
- [34:04]
B
Brilliant, brilliant.
- [34:05]
C
So as I, as I think through what we just talked about, you know, focus groups on the live platform, I don't see TikTok as just a test channel. Many enterprise, those legacy brands, probably thinking of it as infrastructure for brand development and innovation development. What are you seeing when you talk to large CPG brands in terms of investments, commitments and then inclusion of TikTok in long form strategy? I mean, I know when I worked for General Mills I would sit there in these monthly kind of leadership team meetings and insist everybody in that room must have a TikTok account, they must follow again, I wouldn't, I wasn't putting pressure on people to be digital creatives themselves because of all the comms issues, corporate comms issues. But I'm like, you must follow. But what are you personally seeing from large CPG brands?
- [34:59]
A
So TikTok shop is no longer an experimental channel. It's increasingly part of the core strategy,
- [35:06]
C
Chief growth officers and CMOs getting that plug increasingly.
- [35:10]
A
And whether those are new brands or very established brands. So a great example is what Hershey's recently did around the Olympics. You may have seen they came out with this Olympic gold medal Hershey suite, right, launching it on TikTok shop. And it was super successful. And you know, here you have a very established, you know, company, I think they've been around for over a hundred years leveraging TikTok shop, right? And they were able to tap into the community in a really interesting way. So there's like these three videos that I Very clearly remember seeing, you know, one of them was this performance athlete. And after their intense workout, they treated themselves to the chocolate.
- [35:51]
C
Right.
- [35:51]
A
And so, so this really caters to the fitness and athletic community. Right.
- [35:57]
B
It's a, it's a, it's a reward. Yeah.
- [36:00]
A
For like a really grueling workout. And you could see they were just like, you know, and the other example was this mom vlogger and she was hosting a backyard Olympics games champion for her kids. And you know, the winner got the, the gold medal treat. Right. And so this caters very much to, you know, the moment. And then there was another one which was a baker and he was making this dessert where you know, he melt the, the chocolate into this dessert that he was making and that delivered to another audience. And so here you have a very established brand leveraging TikTok and totally, obviously with the Olympics totally being relevant and part of the cultural conversation, but also tapping into these three, and those are just three examples, very distinct communities to drive their sales.
- [36:48]
C
No kidding. So Patrick, sit of you are CPG guys. And so guess what's going to happen? We need to do a live.
- [36:56]
B
We're going to have to do it. We're going to sell CPG guys branded M&MS.
- [36:59]
A
Online.
- [37:00]
C
Absolutely. And one thing I'll note, I want to give credit to Mars, Tim LaBelle. They had that TikTok strategy, right, when they did the 5 Gum partnership.
- [37:09]
B
Who did they do that with?
- [37:10]
C
Cat's eye. And the first thing they did was put it on the TikTok platform.
- [37:13]
B
It was brilliant. It was brilliant. All right, so let's close this out, Patrick, as we move to the end of this decade. Right. My question to you is, if we look at TikTok, is it still considered an app or is it more likely to be an operating system for discovery and consumption of consumers? Where are we in the evolution?
- [37:34]
C
I want to wrap that up and ask you, is it where the world will discover and consume everything?
- [37:40]
A
I think the future of commerce is certainly very much discovery led, not search led. And TikTok shop represents a fundamentally new retail model. Right. Where entertainment, community and commerce is fully integrated. And the growth on TikTok shop since launching in the US around two and a half years ago, has been scaling really rapidly. Enterprise adoption is accelerating. More brands are making this their core channel. And so this isn't a trend. It's really a structural shift in how users shop. And I certainly think it's going to continue.
- [38:17]
C
Awesome. Let me remind our listeners, you can find all of our content by simply going to a web Browser and typing cpguys.com in the URL. If you or someone you know has something to contribute to this ongoing discussion on the CPG guys, please send us an email@contactpguys.com to our audience, I want to thank you for the clicks, likes, comments, DMs, meeting us at trade shows, coming to our events, recording episodes with us, and to all of our sponsors as well. We're always grateful for you. The show doesn't exist without all of you. You work with us all year. Thrilled to have you as our audience and partners. Thank you. Thank you. Thank you deeply from Peter and my heart. Peter, pleasure doing this in Las Vegas with you. Give me that big takeaway from this conversation.
- [38:58]
B
My takeaway is how TikTok shop is not just a test and learn environment. It is a core component of how a brand should think, think about engaging consumers and build long term loyalty. This if you're not, if it's not in your DNA as a brand, you're missing an enormous opportunity that drives measurable conversion at scale.
- [39:23]
C
Patrick has made me rethink a little bit of philosophy on the in store shopping model. You know, there's too much rhetoric that exists in the CPG world today that says 80% of all shopping happens in store and that's what we should focus on and hence displays. Now when you specifically called out the warehouse based shopping, next time I'm in a store, even if it's grocery, that's what it is. A grocery store is a warehouse for a bunch of things and you're limited to what's available in that assortment that day at the time of based on stock. And the reason that model has existed forever is to be profitable. They need you to buy a basket. But with the increased use of AI in shopping and the whole presence of digital creators on not just on TikTok but other platforms as well, more and more individual consumers are moving to item based shopping. Inspiration, discovery, one item at a time in that world. That warehouse based shopping model, I think it's a threat to them and I guarantee you Peter, the in store brick and mortar industry will fight that hard and keep insisting it's the only way to shop. And everything else is brouhaha which is quite the opposite of how the consumer behaves. But in any event, Patrick, thank you for joining us on the CPG guys. This was a pleasure.
- [40:40]
A
Thank you. Thanks for having me.
- [40:41]
C
And don't be surprised if you see that T shirt soon on the CPG guys. That's a wrap of this episode of the CPG Guys.
- [41:01]
B
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