In reality, she said, the return to stores was “a steady incline rather than immediate.” But in 2023, the retailer saw consumers move back into stores for a more interactive, immersive experience, she said. Online, though, one trend gained a lot of traction among Benefit Cosmetics consumers: TikTok Shop.

“We’re seeing a huge increase in sales for our Benetint, which is a really original product of ours. It’s been around for many years,” Casserly said. “That has been influenced by the popularity of TikTok and TikTok Shop. We’ve also seen a big success with the launch of our pore care line, which was six products.”

Benefit Cosmetics joined TikTok Shop while the marketplace was still in beta. The ecommerce expansion for the social platform launched in the U.S. in September 2023. As of Q4 2023, TikTok Shop sales accounted for 4% of Benefit Cosmetics’ direct-to-consumer sales. Casserly said Benefit Cosmetics’ goal is to grow that to 10%. Similarly, DTC sales represent about 4% of total business, she said.

Benefit Cosmetics’ parent company, LVMH, is No. 3 in Digital Commerce 360’s Europe Database. The database ranks the region’s largest online retailers by web sales.

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The benefit of being on TikTok Shop

Casserly said that although Benefit Cosmetics sometimes nudges consumers from TikTok to the retailer’s website, it encourages its consumers to shop within the app.

“It’s a dangerous place,” said Ella Pearn, Benefit Cosmetics UK’s senior digital public relations and influence manager, joking about how easy it can be to spend on TikTok. Pearn said the hashtag “TikTok made me buy it” being viewed tens of billions of times is a testament to TikTok Shop’s influence. (Videos posted using the hashtag had 77 billion views as of November 2023, CNBC reported.)

“Instead of adding hurdles to the buying process, TikTok has created a platform that allows its users to seamlessly complete orders without leaving the app,” Pearn said. “Then, with everything in one place, they can stay exactly where they want to be and funnily enough that is TikTok. Social commerce is certainly the future.”

Still, Casserly said the average Benefit Cosmetics customer on TikTok Shop skews “a lot younger.”

“The average spend is probably a little bit less because it’s a new way of shopping, so there is some nervousness around purchasing through there. But we are seeing that start to grow,” Casserly said. “There’s a lot of offering on there that isn’t necessarily brands you would see on websites as well. There’s a lot of TikTok-grown beauty brands that have a lot of success through TikTok Shop but not necessarily in other marketplaces. That’s another difference. It’s a different group of competitors.”

Benefit Cosmetics displays its products on TikTok Shop, where it has sold more than 96,500 items.

Advertising versus organic posts on TikTok

Benefit Cosmetics began using TikTok in March 2020, Pearn said, well before TikTok Shop launched its beta. The retailer then “started advertising with brand campaigns relatively early on, when the costs were relatively pricy. We took part in a number of brand campaigns with the one-day max format, possibly Q2/Q3 of 2020. That brand activity’s always been there. Then we sort of moved to working more with influencers, which has always been a natural step for Benefit as a brand.”

Benefit Cosmetics is “very much in digital media. It’s our largest outlet,” she said. She said Benefit Cosmetics most heavily invests in TikTok, with plans to continue growing that investment in 2024. The other top digital media channel is Meta’s platforms, she said.

One of the benefits to being on TikTok, she said, is that the “for you” page can show content from anyone, anywhere. And although some brands have found success in organic TikTok posts, as opposed to in-app ads, “there’s certainly a method to the madness of the TikTok platform,” she said.

In addition to using the TikTok Shop for sales, Benefit Cosmetics has a TikTok page to teach consumers about its beauty products and tools.

Historically, she said, Benefit Cosmetics would primarily use social media ads to target consumers interested in beauty products. The brand would then create lookalikes based on those users. TikTok, though, allows the content to be from anyone on anything, versus other platforms that use attributes to target consumers, she said.

“We’re still learning and still defining what that really looks like for us,” Pearn said. “You can create something you think is going to work incredibly well and then it doesn’t. After a decade of what has been meticulously staged, edited, polished content that’s been heavily curated across all social media platforms, we really find ourselves in a bit of a creative renaissance. TikTok has paved the way for that and for a new, much more authentic style of content. It’s leveling the playing field, and even things like livestreaming that TikTok offers makes that incredibly exciting.”

She said that makes both organic and paid TikTok content more accessible. Benefit Cosmetics previously used Instagram livestreaming when that functionality was new, but “we never saw the same results as we see on TikTok.” The brand also has livestreamed on the television network QVC, she said.

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Hiatt joined Vera Bradley in January 2023. The accessories retailer also has a fairly new CEO and chief financial officer. The relatively new leadership team presents a chance to make positive changes to the brand and connect with new consumers this year, she said.

“We will really use this as an opportunity to reconnect with what people love about the Vera Bradley brand and make sure that we are modernizing that for today and reaching those new generations,” she said.

Vera Bradley ranks No. 277 in the Top 1000, Digital Commerce 360’s database of North America’s largest online retailers by web sales.

Vera Bradley’s TikTok strategy

Modernizing the Vera Bradley brand is a key focus in 2024, Hiatt said. One way to do that is by embracing TikTok. The online video platform has become a driving force behind how young consumers make purchasing decisions, according to research from Morning Consult.

Vera Bradley sees benefits from TikTok without directly needing to post.

“We’ve really benefited recently from a lot of organic TikTok related to Vera Bradley,” Hiatt said.

Videos with “#VeraBradley” have 105 million views to date on the platform, leading to better brand awareness. It also works directly with influencers on posts.

“Most brands have to work with influencers in some form or fashion. I think it’ll continue to be a strong trend,” she said.

Influencers with smaller followings can be more impactful, she explained, but there are also times to go with a larger influencer.

“It really depends on the type of messages you’re trying to send. Are you introducing yourself to new people? Or are you furthering a connection with your existing customers? And that would really dictate when you would go big or not,” she said.

Vera Bradley will invest more in influencer marketing in 2024 than it did in 2023, she anticipates. Joining TikTok Shop is the logical next step.

“We know more and more people are discovering brands and interacting with their favorite brands” on TikTok, she said. “So why not just make it an easy experience if they find something that they want to buy via TikTok Shop?”

TikTok Shop launched in the U.S. in September 2023. Vera Bradley is treating it like any other marketplace and spent time watching competitors before its own launch, Hiatt explained.

Other ways to reach new customers

Collaborating with other brands is another way to expand Vera Bradley’s reach, Hiatt said.

“Finding pockets of things that people are passionate about, whether it’s Disney or Peanuts, or the NFL, has been really fun and has really reached a broad spectrum of different customers,” she said, referring to Vera Bradley’s collections incorporating those brands.

The accessories retailer has to find ways to work with the other media brands that are true to Vera Bradley’s bold and bright patterns it’s known for, she said.

“We’ve always been a multi-generational brand, which was very rare. And we will continue to speak to all customers but want to make sure that we’re continuing to introduce ourselves to newer generations,” Hiatt said.

Collaborations with other brands are successful in bringing in new customers, who then turn into repeat customers, she said without revealing more.

Hello Kitty, Shark Week and Harry Potter collaborations have been particularly successful at bringing new customers to Vera Bradley, CEO Jacqueline Ardrey told investors in a third-quarter earnings call in December.

Vera Bradley took advantage of changing consumer habits

Vera Bradley hasn’t reported results from its fiscal fourth quarter yet, which will include the holiday season. Consumers were pickier this year when it came to holiday shopping. “They were really shopping around and maybe waiting a little bit longer to decide what they wanted to get,” she said.

The retailer has adapted to changing consumer preferences over the last year with an emphasis on travel. Much of the consumer spending growth in recent quarters came from spending on experiences, rather than goods. Vera Bradley used that as an opportunity to grow its travel accessories, Hiatt said. While that includes suitcases, it was also advantageous to expand their idea of what travel is.

“We will continue to focus on travel, but we’re also expanding how we think about travel. There’s the traditional suitcase on an airplane, but also people are taking longer weekends and road trips,” she said.

That’s an opportunity for duffel bags, travel organizers, toiletry bags, and other products beyond suitcases. 

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ThriftBooks ranks No. 319 in the Top 1000, Digital Commerce 360’s database of North America’s largest online retailers by web sales.

ThriftBooks, generative AI and LLMs

Using generative AI and large language models (LLMs) to improve the ThriftBooks.com experience is a top priority this year, Hagen said.

“Generative AI is a big focus. And so is using the large language models to find a new way to connect our customers with books that they might not have known they were looking for,” she said. 

The online bookseller uses AI to make relevant recommendations on books to customers, she said. For example, the proprietary technology learns that customers who read a specific recent bestseller tend to purchase other subgenres, which it can then recommend to them. As more customers purchase through ThriftBooks’ website, the recommendations become better because they have more data to draw on.

“This customized approach helps to create a ‘surprise and delight’ customer experience, ultimately leading to increases in customer engagement and retention,” Hagen said, without sharing specific figures. 

Recommendations are important because ThriftBooks has a vast inventory of books. It sells 19 million titles, Hagen said.

“It’s a lot of information for a human to be able to process,” she said. With LLMs, though, they can “make that experience that much more succinct and manageable without having to add costs to the system.”

The LLMs generate summaries of books based on product descriptions, author biographies, and reviews to present the information in a digestible way for consumers. That’s particularly useful for less popular books, like out-of-print titles that ThriftBooks sells, she said. 

The retailer started rolling out these tools in early 2023, with plans to continue experimenting in 2024. It uses open-source machine learning libraries and is experimenting with various LLMs, Hagen said without revealing more.

ThriftBooks’ loyalty program

ThriftBooks has a few other tools to engage with customers. Its loyalty program, ReadingRewards, is also key to customer retention, Hagen said. The program contains three tiers:

• Reader: free to join
• Bookworm: $75 in annual spending
• Literati: $150 in annual spending

Members earn points for shopping with ThriftBooks, and members in higher tiers earn more points per dollar spent with the retailer. 

“The best thing about the loyalty program is we give out free books. So it’s not like you’re redeeming points for dollars off,” Hagen said. “Our customers love to get free books, and so it’s really been a way for our customers to engage with us and get excited about their free books when they arrive in the mail.” 

The free book rewards also provide a low-risk way for members to experiment with AI-generated recommendations.

“Part of using large language models is helping customers find a book that maybe they didn’t know existed. There’s a book you’re not familiar with, and you try it, and then hopefully it’s something that they really enjoy,” Hagen said.

ReadingRewards members are more likely to return to ThriftBooks, she said. The top Literati tier grew 30% year over year in 2023, and the middle Bookworm tier grew 20%.

ThriftBooks and social media

An active social media presence is keeping ThriftBooks in touch with a younger audience of consumers, Hagen said.

“What we’ve seen in the last several years is Booktok, and the whole TikTok space has really taken off, and it’s really helped us create some resonance with a younger generation, a younger set of consumers,” she said.

Booktok refers to TikTok videos about books, which publishers credit with selling 20 million copies in 2021.

ThriftBooks sees gains from social media without directly selling there, Hagen explained. The retailer does not sell on TikTok Shop and has no current plans to. Instead, it capitalizes on videos created by customers, reposting unboxing videos, for example. ThriftBooks has more than 166,000 followers. That’s also why ThriftBooks doesn’t spend much on influencer marketing, she said. There’s simply enough organic content out there for free as consumers create their own videos about ThriftBooks and engage with the retailer’s videos.

One exception was in celebration of ThriftBooks’ 20th anniversary last year. The retailer invited BookTok influencers to tour one of its processing centers and share videos with their followers. That was particularly popular, she said.

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Digital Commerce 360 followed the most important stories discussed on the Javits Center floor in New York City. These are the top ecommerce stories from NRF day three.

Tractor Supply shares AI applications

Tractor Supply Company CEO Hal Lawton started off the day with a keynote session about the retailer’s rapid growth. The chain nearly doubled revenue since the pandemic, and it just reached $1 billion in ecommerce sales, he said.

Lawton also addressed one of the biggest topics of the conference: AI and its applications for retailers. He likened the discussion around AI today to conversations retailers had about the internet in the early 2000s. This time around, though, retailers aren’t asking “When is this going away?” — but rather, “How can we use this?”

Tractor Supply Co. is already using AI in several ways, both customer-facing and behind the scenes. The retailer is using AI to write marketing copy as well as machine learning in supply chain and inventory replenishment.

Customer service is one of the largest applications for generative AI at Tractor Supply so far, Lawton said. It used Microsoft’s Azure OpenAI toolkit in its internal GURA customer service platform. GURA uses AI to scrape Tractor Supply’s web and training materials. Then, workers can ask questions about customer inquiries, such as “What dog food is good for sensitive skin?” It then answers with specific SKUs available in that store, and can answer follow-up questions to narrow down the results.

Tractor Supply also uses computer vision to allocate labor in stores more effectively. Security cameras located over the checkout use machine learning to determine if another cashier is needed based on how many customers are in line and how many items they have. 

Tractor Supply is No. 99 in the 2023 Digital Commerce 360 Top 1000, a ranking of North America’s leading retailers by online sales.

Saks addresses organized retail crime

Saks president Marc Metrick ended his session by addressing crime, a topic that other speakers addressed less directly throughout the show. Metrick called organized retail crime a “huge issue” facing his business and luxury ecommerce more broadly. These crimes directly impact consumer experience in a negative way, he says. 

Retailers like Saks have to “put plexiglass over the experience online,” he said, akin to measures taken by retailers like Walgreens in stores, where products are locked behind glass to combat theft. In practice, that means putting additional roadblocks in front of consumers for customer service help, he explained. Walgreens is No. 19 in the Top 1000.

Customer service reports of “merchandise not received” more than doubled in just a few years, Metrick said. In the past, Saks would give that customer a refund or credit for the purchase that never arrived. Now, the retailer has invested in wider fraud protections to determine if that customer has made other similar complaints or has a history of returns.

In December, the NRF retracted a previous statement on the financial impact of organized retail crime. The organization previously attributed nearly half of total retail shrink to the issue in an April 2023 report.

“We stand behind the widely understood fact that organized retail crime is a serious problem impacting retailers of all sizes and communities across our nation,” a spokesperson from the NRF told Digital Commerce 360 in December. 

Saksfifthavenue.com is owned by Hudson’s Bay Co., which ranks No. 28 in the Top 1000. 

Retailers try to emulate strategies of Shein and Temu

U.S. retailers can learn important marketing lessons from Shein and Temu, Jason Goldberg, chief commerce strategy officer at the Publicis Group, told attendees. Both retailers have strong paid and organic social media driving their growth, he said. A diverse affiliate program is behind many of these posts on platforms like TikTok, and drives sales, says Coresight Research CEO Deborah Weinswig. 

Shein and Temu are also adept at gamifying shopping, Weinswig said. She pointed to features like virtual gift boxes, spinning wheels for discounts, and awarding points to customers for making purchases and leaving reviews. 

Goldberg praised the way Shein and Temu created trust with U.S. consumers as unfamiliar brands. Both offer free shipping and returns, and a shipping on-time guarantee. Making these promises to consumers helps make the case for purchasing from them versus a legacy brand, he says. 

Goldberg warned U.S. retailers not to discount Shein and Temu as real competitors, especially as they expand into new categories. 

Shein is No. 2 in Digital Commerce 360’s ranking of ecommerce retailers in Asia. Temu, which Pinduoduo owns, launched in 2022 and isn’t yet reflected in rankings. Pinduoduo operates an app-only marketplace for Chinese consumers. Because it doesn’t operate an ecommerce website, it is not included in Digital Commerce 360’s Asia Database.

Catch up on Digital Commerce 360’s other daily recaps from the 2024 NRF Big Show:

• Here’s what you missed from NRF Day 1.
• Here’s what you missed from NRF Day 2.

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In a phone interview with Digital Commerce 360, Gerbig reflected on the lessons he learned taking Pink Lily from a bootstrapped ecommerce site with a team of two to a company with 300 employees and $120 million in annual revenue. With 15,000 products in its inventory, the company found new paths to its customers, thanks to its early focus on nascent social media trends.

The Pink Lily Boutique is No. 836 in the Digital Commerce 360 Top 1000, a ranking of North America’s leading retailers by online sales.

Coming out of 2023, Gerbig cited a “really solid holiday season, comparable to last year,” but he is also looking ahead. From merchandising to ecommerce platform changes and staffing, he shared what he believes Pink Lily got right early on, as well as where his attention will be in 2024.

What sold well in the 2023 holiday season?

Asked what has been selling the best on Pink Lilly of late, Gerbig credited its mainstays.

“Basics and athleisure, and loungewear continues to be a top seller for us,” he noted. These standards have long made up the staples in Pink Lily’s colorful online catalog. But it has invested in new technology along the way.

“We have an in-house design team that creates a lot of our graphic tees and graphic sweatshirts,” Gerbig explained. “We just invested in a large DTG — direct-to-garment — printing machine that can print, you know, 900 shirts an hour with various designs.”

That machine replaced an old screen-printing process for the online retailer. The time and labor to build each screen and change out designs became too intensive. So they brought in a larger machine to apply new designs on demand. Those graphics include simple callouts to coffee, emotions and locations on cozy t-shirts and sweatshirts. The Pink Lily site currently shows about 100 options, according to Gerbig. He credits remote work with driving demand.

“As more people just work from home and more people want to wear comfortable clothes, I mean, yoga pants, workout pants, hoodies, just your basic casual stuff continues to be a pretty solid performer,” he explained.

Gerbig on growing Pink Lily’s team to 300 staff

Remote work has played a role for Pink Lily’s growth internally, as well. The company is located in Bowling Green, Kentucky, which is where the Gerbigs studied together at Western Kentucky University before starting Pink Lily. Gerbig believes staying in the area was the right call, though he acknowledged that attracting top talent to relocate can be a challenge.

“It’s not exactly a giant digital talent hub, you know, like if I was in Dallas or L.A. or Atlanta — or even Nashville for that matter,” said Gerbig. “But the good thing is we have a lot of remote jobs.”

As much as 25% of Pink Lily’s staff is remote, according to Gerbig. That number would likely be higher, he said, if it weren’t for the onsite needs at the warehouse that come with managing inventory and shipping orders. Still, opening up to remote hires has allowed him to fill out departments for non-warehouse positions.

“Otherwise, I think we might have struggled a bit,” he admitted. “But the fact that we can make these guys remote — we have a lot of remote staff now — a lot of remote employees and everything seems to work out just fine.”

Testing out physical retail

As Pink Lily’s staffing expanded from in-person to remote-heavy, the online retailer also piloted a physical retail presence for its sales. That flagship store was set — like the company — in Bowling Green, and it’s something that Gerbig is contemplating in the coming year.

“The majority of our sales are online,” he stated. “But I know a lot of companies do have a strong retail strategy and strong retail presence, and that’s the conversation that’s come up recently. So we’re paying attention to a few things, and we might look a little bit deeper into that — maybe later on in 2024.”

Like other retailers, Gerbig is watching what happens with macro trends in the economy and consumer habits. Signals on those fronts are likely to influence the company’s next steps.

“We’re paying a lot of attention to the economy and the markets and competition, just some of the ideas floating around about what to do with retail stores,” he explained. “Are customers going back to more retail, or are they shifting to more ecommerce?”

AI and ecommerce tech

As an ecommerce brand, Gerbig is also paying attention to Pink Lily’s tech stack. That extends to their ecommerce platform, as well as emerging uses for artificial intelligence.

“We’re paying attention, but we haven’t quite dived into the full AI, yet,” he said.

Currently, he likes solutions for automating some responses in customer service.

“Those have been helpful for us —  to not have to staff so many full-time customer service reps considering the same questions: ‘Hey, what’s my tracking number? When does this restock? What’s my order number?’ — things like that that can easily be answered by a machine or a robot,” he cited as examples. “Those have been helpful.”

Beyond those use cases, he is hopeful that better AI-powered options will emerge for fit recommendations.

“[The technology is] still kind of young, and it’s not perfect yet, so we haven’t started using it, but we are paying attention because one of the main drawbacks of being an online business is you can’t try to clothes on,” he said. “People have different body sizes, different shapes, things fit differently. So the ability to kind of do that digital try-on will be very, very helpful once the technology is proven.”

Pink Lily’s ecommerce platform

Pink Lily uses Shopify, which has been its ecommerce platform since 2020, according to Gerbig. After initially starting with Volusion, moving to BigCommerce, then eventually making the move to Shopify, he seemed confident that it’s the right fit for the time being.

“There’s a lot of add-ons, a lot of apps, a lot of different plugins that work,” he said, calling the overall user experience “great.” He also values Shop Pay, and the checkout session speed that Pink Lily is able to achieve as a result.

“I don’t know if it’s Shopify specifically, but just the app partners that they have,” he explained. Gerbig cited inventory control, customer service, restock alerts and website heat maps of customer activity as features he values.

“I think I don’t see any reason why we wouldn’t have Shopify,” he stated. “It’s been good to us.”

Pink Lily’s social media strategy

One area where Pink Lily proved itself early on was on social media, where Tori spearheaded its presence. Over 10 years, platforms have changed and opportunities have shifted, but Gerbig noted how the company has learned and evolved along the way.

“We’ve learned that if you’re the first one to a trend and utilize that trend to its maximum potential, you can really grow it,” he said. In the early years, that meant using social media posts to organically grow traffic. Later, that shifted to paid strategies.

“So once social media organic posting kind of died out a little bit, we jumped on the paid ads bandwagon,” Gerbig recounted. “We really pushed paid ads, Google ads, Facebook ads, YouTube ads, pretty heavily back in I would say 2016-2017, before the whole world caught on and before it got extremely flooded.”

That was followed by prioritizing influencer marketing in 2017-2018, when Gerbig said Pink Lily “put 60%-70% of our marketing budget on influencers.” Now, the company has a holistic marketing approach, which he said encompasses “social, paid ads, email, influencer” and notably in 2024: TikTok.

“We do a lot of text alerts, so we have this holistic marketing approach where we have, you know, eight to 10 different channels and make sure that we kind of spread the budget across different areas,” he said. “But if we see that one is performing well or if there’s something new and up and coming, we’re quick to shift and throw a few more dollars of budget at the channel, and to see what happens.”

Potential on TikTok

TikTok alone represents one of Pink Lily’s priorities in the coming year. Against the backdrop of the company’s historical successes on social media, Gerbig specifically sees the ByteDance-owned platform as having “the biggest potential.”

“TikTok is huge, TikTok Live, TikTok Shop, and then just organic,” he noted. “We’ve posted on TikTok a lot more and put a few more eyeballs on that category as we try to tweak our campaign strategy. Because, you know, what you do on TikTok needs to be a little bit different than what you do on Facebook, also a little bit different than what you do on Instagram because [there are] different algorithms, different customers, different eyeballs and different chances to go viral on each platform.”

Other retailers have shown new interest in TikTok as well. Both Newegg and Peloton have recently expanded their presence there, and a Morning Consult report in 2023 showed that it played a growing role in driving holiday purchases.

What has worked so far

10 years after launching Pink Lily, Gerbig spoke confidently about the lessons learned and analytics-driven approaches that helped grow its sales and size from the business’ lean years to where they are now.

“We didn’t have money,” he said. “We had a very small amount of capital that we put into a printer and a small amount of inventory. So I had to focus on being cash-flow positive from day one and being profitable.”

After expanding and continuing to experiment with tech, merchandizing and social strategy, he expects to keep those core values in place in 2024.

“Our expectations are to keep doing what we’re doing,” Gerbig stated.

As for what ultimately made the difference in Pink Lily’s growth trajectory, Gerbig points to the early combination of skills that he and Tori brought to the table.

“I think we lucked out when we decided to divide and conquer the roles of running the business, so it just so happens that she is an expert in sales and marketing,” he explained. “And it just so happens that my fields were in finance and operations and business strategy.”

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Social media platforms, including TikTok, drove 5.72% of total web traffic to retailers in the Top 1000 in November, from 5.63% in November 2022, based on Digital Commerce 360 analysis of Similarweb data. The Top 1000 database is Digital Commerce 360’s ranking of the largest North American online retailers by web sales. That represents a fairly large range, with significant differences by category.

Jewelry and apparel retailers receive far more traffic share through social media than the average, 12.96% and 11.15%, respectively. Both categories have grown traffic from social media year over year, up from 11.26% and 9.04%, respectively. Health and beauty, one of the most popular categories on TikTok, ranked third in social media referrals, with 7.38% of web traffic in November, increasing from 5.92% in 2022.

How is TikTok impacting holiday shopping?

Social media virality is a key factor in consumers’ purchasing decisions, says Ellyn Briggs, brands analyst at Morning Consult.

“Roughly half of Gen Z adults (46%) and millennials (50%) say a product going viral is important to them when considering whether or not to purchase it,” she says, citing decision intelligence at Morning Consult.

TikTok, more than any other app right now, is synonymous with viral marketing, according to Briggs.

“TikTok users have proven themselves to be voracious consumers,” Briggs says. These users have “notably higher purchase consideration” for most brands than U.S. adults as a whole, according to Morning Consult data. And that consumption extends beyond online shopping to purchases in stores, too. TikTok users are more likely than the general public to say they enjoy shopping in stores. They’re also 7 percentage points more likely to be Amazon Prime members than all adults, Morning Consult found. 

TikTok is essentially a shopping guide for consumers who are already primed to spend more than the average person, both in stores and online, Briggs says. It’s also a form of brand discovery for Gen Z, a group more likely to say it is open to purchasing from new brands than any other generation, at 77%.

Those findings are echoed by Insider Intelligence, which reports that 53% of U.S. adults between 18 and 29 years old use TikTok for product discovery. Those consumers are more reluctant to actually purchase through the platform, however. Just 8% of that age group said they would buy through a TikTok shop if it was an option.

Who is using TikTok for shopping?

Young people are the most likely consumers to make purchasing decisions based on TikTok, Briggs says.

“TikTok is one of Gen Z’s most-used social media platforms, and it’s their favorite for following influencer content,” Briggs says.

Within that cohort, there’s a sharp divide by gender, with women much more likely to use TikTok and make purchases based on that usage. 75% of Gen Z women use TikTok, according to Morning Consult’s data. 62% of Gen Z men use the app. TikTok has grown 21% among Gen Z since Morning Consult conducted the same study in 2020.

Female Gen Z TikTok users are most likely to engage with “haul” videos, in which a creator shares products they’ve purchased. These videos are the most likely type of content to drive a purchase from a Gen Z consumer, per Morning Consult. 42% of Gen Z consumers say they’ve purchased a product based on viewing a haul video. Nearly a third of Gen Z TikTok users say they’ve purchased a product because of a “get ready with me” video and “routine” videos, both of which typically show a creator using skin care and beauty products.

TikTok users are particularly prone to purchasing clothes and beauty products shown on TikTok. 49% of female Gen Z respondents said they’ve purchased clothes because they were sponsored by an influencer, and 53% said the same about beauty products. It’s no surprise that those two categories are some of the most popular on TikTok, Briggs says.

How are retailers reacting?

Retailers are paying attention to TikTok as a channel to drive sales thanks to the platform’s undeniable impact.

“TikTok has proven itself as a must-invest media channel over the last few years, at least for any brands trying to reach a young audience,” Briggs says.

She points to e.l.f. Cosmetics (No. 950 in the Top 1000), Charlotte Tilbury, Crocs (No. 104) and Skims (No. 218) as a few examples of retailers that successfully grew brand awareness, favorability, and sales through TikTok.

32% of respondents in a Digiday poll of 400 brand and retail professionals in November 2023 say TikTok is “extremely valuable” for revenue. That’s up from just 8% in 2022. 60% said TikTok will play an important role in holiday marketing, up from 55% in 2022. Those retailers are putting money behind their answers: 78% say they allocated funds for TikTok marketing in Q3 2023, up from 54% in Q1 of the same year. 35% of retailers also said they’re purchasing ads on TikTok, an increase from 24% last year. 

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In the year ahead, many retailers and brands will turn away from that strategy and focus instead on adding specific pieces of ecommerce technology that address pressing needs and promise a quick ROI, Forrester Research Inc. says in its recently released “Predictions 2024: Digital Commerce” report.

Emily Pfeiffer, principal analyst, Forrester Research Inc.

Retailers and other types of companies are driven to seek new solutions when existing ecommerce systems that impact customer-facing transactions and internal processes are unable to meet new needs, says report co-author Emily Pfeiffer. For example, many retailers and brands have inventory systems that do a good job of tracking merchandise from suppliers to distribution centers to customers. However, they are not designed to provide online shoppers with real-time information about inventory availability.

Commerce teams move away from replatforming to ‘point solutions’

Those inventory systems and other components of ecommerce operations, Pfeiffer says, “would have a very high cost to rip and replace.” Instead, she says, more companies are leaving those systems in place for now and seeking add-on technology that addresses the pressing needs they currently face.

“And that is the right way to think about it,” Pfeiffer says. “I have a business problem, what capability will solve it, what tech function will give me that capability, let me go add that. Those are the types of moves we see coming in the next year.”

Pfeiffer, a principal analyst at Forrester, isn’t surprised by this development. In last year’s report, she and her colleagues predicted that one-third of organizations that tried to “play software company” by piecing together combinations of function-specific technology would regret they did. She believes that prediction was on the money.

In response, Forrester predicts that fewer companies will attempt big initiatives to refresh their ecommerce technology infrastructure. It also predicts that “smaller, targeted moves will replace half of major replatforming projects.”

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In many cases, those smaller moves will consist of retailers and brands looking for a “point solution,” technology that addresses their specific problem. While that may lead them to new vendors, she says it’s a good idea to determine what a retailer’s current vendor offers, as ecommerce tech providers are constantly acquiring companies with specialized expertise and innovating themselves.

“Start with your trusted vendor, then look at point solutions,” Pfeiffer says. “The last resort should be a major replatforming.”

Other ecommerce technology predictions for 2024

Besides predicting a shift to more targeted tech investments, the Forrester report makes four other predictions for 2024:

1. At least one-quarter of digital tech spending will shift away from maintenance.

Given the need for flexibility today, “businesses will realize they can’t keep throwing good money after bad. They’ll spend less on maintaining legacy systems — and on the partners that support them — as they finally move to eliminate outdated tech instead of paying to keep it on life support.”
With many tech budgets tight, Pfeiffer says she and her colleagues hope companies will “put money into things that will move them forward instead of automatically writing that check” to maintain the systems they have in place.

2. Only one-quarter of businesses will benefit from digital commerce initiatives based on generative AI.

Retailers will be constrained by consumers demanding more control over their personal data and new AI-related regulations, Forrester predicts.
“Trust is everything,” Pfeiffer says. “Make it really clear what data is being used, how it’s being used and give customers control if they want it not to be used.”

3. Social media giants will partner with three retail media networks for commerce.

Forrester doesn’t predict which three retailers’ advertising networks will partner with social networks. But it points to examples such as Meta Platforms Inc., owner of Facebook and Instagram, working with retailer Dollar Tree. It also points to Pinterest working with U.K. retailer Tesco.
Such relationships, Forrester says, will leverage customer data to make purchasing on social networks more appealing. And social commerce is yet to take off among U.S. consumers overall. However, a 2022 Forrester survey found 61% of U.S. online adults under 25 had completed a purchase on a social network.

4. Six percent of businesses will boost employee productivity with computer vision and augmented reality.

Examples include store associates, warehouse workers and B2B salespeople using cameras on mobile devices to capture physical data and get recommendations on the best actions to take. Already, 4% of retail and wholesale workers say they used augmented or mixed reality tools on their jobs weekly. Forrester projects an increase of at least 50%, to 6% or more, in the coming year.
“Digital businesses should initially adopt these tools as tests with clearly defined desired outcomes — and then carefully monitor the impact on those intended results and goals,” the Forrester report advises.

In addition to Pfeiffer, Forrester analysts Lauren Cevallos, Chuck Gahun and Brendan Witcher co-authored the 2024 digital commerce predictions report. They had input from Fiona Swerdlow, Keith Johnston, Kelsey Chickering, Joe Cicman, J. P. Gownder and Delilah Gonzalez.

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Bachir Kassir, founder, MyTradeZone.com

“We know that 40% of B2B marketing budgets are spent on trade shows and that over 95% of marketers use social media content in their campaigns,” he says in his promotional material, adding: “So why is there no social network specifically dedicated to B2B trade?”

That’s where MyTradeZone fills the gap in B2B commerce, he adds.

“On MyTradeZone, each business can both market its products/services and source what it needs, all within the same platform,” he says.

Kassir notes that he founded and launched the site quietly several years ago, building a base of about 50,000 users through word-of-mouth.

A toolset with CRM and email marketing

But he recently publicized MyTradeZone’s official launch in a press release and is considering taking on investment partners to spur growth. He adds that he expects the site to begin generating revenue in the first quarter of next year.

MyTradeZone.com provides built-in features ranging from site search, product listings, and online video chats to email marketing and CRM software applications to help buyers and sellers find and build business relationships with particular types of trading partners.

It offers limited access to these features at no charge under its basic membership plan. Premium plans will provide the same features and higher site search rankings for monthly fees from $20 to $50 based on the volume of activity.

In addition, the top premium plan will let participants earn fees from online ads placed on the social network site. MyTradeZone will take a cut of those ad fees.

MyTradeZone.com does not operate as a conventional ecommerce marketplace hosting product and services sales transactions among participating buyers and sellers, who complete those transactions outside the networking site. But it will let users monetize business communities, such as by setting up industry organizations and charging membership fees through the Stripe online payments system. In that case, MyTradeZone will charge a fee based on a percentage of the membership fees.

Kassir says MyTradeZone has been gaining about 100 members daily — a figure he wants to grow to about 1,000.

To get there, he says he’ll continue to invest in “lots of business tools” available to members and offer premium membership deals to trade shows, business networking groups and trade associations. He adds that while he has mostly self-funded MyTradeZone, he may consider outside investors.

Paul Demery is a Digital Commerce 360 contributing editor covering B2B digital commerce technology and strategy. paul@digitalcommerce360.com.

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Babylist, an online marketplace and baby registry aggregator, treats generative AI as a “co-pilot,” and not necessarily a time-saving tool, says Lee Anne Grant, chief growth officer.

Lee Anne Grant, chief growth officer, Babylist

“It’s a tool to help generate ideas, content and copy,” she says. “In some ways, using it is taking us more time.”
This is because Babylist’s creative team uses the technology to inspire rather than outright write complete blog posts or other marketing content. Marketers ask AI questions and then think about how the results can help them create.

“We had an all-hands meeting [in early 2023] with the goal to approach the technology in an educational development way,” Grant says. “You’re not only allowed to use it for your job, but you’re also expected to.”

More retailers are likely to follow suit as the technology continues to advance and retailers learn how to wield it. 56% of U.S. marketing or advertising decision-makers already use generative AI in their marketing efforts, according to consulting firm Forrester Research Inc.’s June 2023 business-to-consumer marketing survey of 154 executives. These large language models, chatbots and image generator vendors include ChatGPT, DALL-E, Stable Diffusion and Midjourney.

Digital marketers are learning that the more they test, the more the technology learns. This affordable tool can help — but not replace — marketers. Babylist uses ChatGPT to test copy for newsletter and marketing email campaigns. Online florist UrbanStems uses generative AI to write blog posts, and it creates images for social media marketing creative. And men’s footwear brand Koio uses AI-generated copy for brainstorming email and ad ideas. The costs are low, and retailers like UrbanStems are mindful that if they aren’t using it, their competition certainly is.

Retailers must consider the potential upsides — and pain points — when using generative AI

Digital marketers are using generative AI to draft ideas and examples for emails, SEO and other marketing materials. While the potential benefits are vast, there are also concerns, says Jay Pattisall, vice president, principal analyst at Forrester.

Marketers must consider how brands, retailers and agencies are using the technology, Pattisall says. Copyright law does not protect AI-generated art, for example.

But the potential for how brands can use AI is exciting, he says. Advertising agencies are building platforms for their clients as part of their own proprietary technology. Retailers are building in-house, too, he adds.

“But at this stage, it’s more practical to buy because there are more options available on the marketplace. That may change in the future,” he says.

Babylist tests ChatGPT-generated email campaigns

Babylist uses ChatGPT to test newsletter marketing email campaigns. In 2023, Bed Bath & Beyond Inc., owner of major baby products retail chain Buy Buy Baby, filed for bankruptcy. Babylist saw this as an opportunity to acquire Buy Buy Baby’s customers.

Babylist ran a test for an email marketing campaign on April 29 with ChatGPT for its two newsletter audiences. It sent out one test to 10% of its “pregnant” newsletter recipients (about 59,000 subscribers out of 589,000 on the total list) and 10% of its “parent” newsletter recipients (222,000 recipients of 2.32 million).  Half of each group received one email written by a Babylist editor and the other written by ChatGPT.

The results? For the pregnant group, the editor’s email won with a 2.9% higher open rate compared with the generative AI’s version.

• The Babylist editor’s subject line: “buybuy BABY Bankruptcy & Your Registry: What to Know.”
• The ChatGPT’s subject line: “What the buybuy BABY Bankruptcy Means for Parents.”

For the parent group, ChatGPT gained a slight edge over the human editor with a 0.37% higher open rate.

• The Babylist editor’s subject line: “buybuy BABY Bankruptcy & More Parent News.”
• The ChatGPT’s subject line: “What the buybuy BABY Bankruptcy Means for Parents.”

Babylist found that ChatGPT-generated subject lines increased open rates in half of their tests. It concluded that ChatGPT is a “great resource for when the team needs subject line inspiration or help writing one,” Grant says.

AI helps retailers brainstorm ideas

ChatGPT-generated content helps Babylist’s creative team create better content, Grant adds. The value is in the brainstorming.

“If a copywriter is feeling stuck on a new concept for TikTok video, they can ask ChatGPT to generate a bunch of ideas,” she says.

Using generative AI allows retailers to scale and personalize marketing based upon the brand’s approach, says Forrester’s Pattisall.

“Let the people be in charge of the creativity and let the machines help scale and volumize the marketing,” Pattisall says.

Retailers must consider copyright and liability issues

Babylist employees are instructed not to share proprietary or confidential information with ChatGPT or any other public generative AI platform, Grant says.

This is important because retailers must also take care about what materials they use to “train” the AI model, Pattisall says.

“If those inputs are using data points that are copyrighted material, then the model potentially is violating the copyright by using rights-protected materials,” he says.

One example of this is between visual media company Getty Images and Stability AI Inc. Getty Images accused Stability AI of using more than 12 million photos without permission or payment to use those images. The complaint, filed in February 2023, says that Stability AI unlawfully used Getty’s copyrighted images and text, including metadata, to train its AI text-to-image tool Stable Diffusion.

Metadata is the information used to summarize how and when the data was created as well as the source, type and owner of the data. Stable Diffusion is a text-to-image model that uses deep learning to generate high-quality images from written descriptions.

“All of Getty’s images are copyrighted images,” Pattisall says. “So the liability is a concern for marketers.”

UrbanStems jumps onto generative AI to keep up with competitors

Competition prompted online flower retailer UrbanStems to focus on generative AI, says Katie Hudson, content director. In early 2023, the retailer was already using generative AI to create notes to accompany its flowers. Hudson says she noticed competitors doing the same — and she read about it in the media.

Katie Hudson, brand marketing and content, UrbanStems

UrbanStems decided to look into how it could use the technology beyond brand awareness, Hudson says.

Mother’s Day is UrbanStem’s busiest holiday. It accounts for 15% of the retailer’s total annual revenue. For Mother’s Day 2023, the retailer used ChatGPT to write a blog about the 10 best brunch spots for Mother’s Day in Washington, D.C.

UrbanStems marketers wrote the introduction, AI wrote the rest of it, and the article appeared in the retailer’s blog section on its website.

“During May, which includes Mother’s Day, we saw this local post drive 5% of our organic blog traffic. It was in our top 10 performing posts for the month,” Hudson says.

Blogs are not intended to drive conversion, but rather, improve organic search results, she says.

“Our blog had our highest ever non-brand search traffic during Mother’s Day,” Hudson says.

This could be attributed to the brunch blog, among other marketing efforts, she says. Over the two weeks leading up to Mother’s Day, UrbanStems’ organic search’s conversion rate increased 17%, she says.

UrbanStems used AI to write a top 10 best brunch spots for Mother’s Day in Washington D.C. in April 2023. The post increased organic blog traffic 5% in May. It was in the top 10 performing blog posts of the month.

UrbanStems has not drafted enough generated-AI posts on its blog to truly compare performance, Hudson says. Part of the reason is because it typically takes several months for its blogs to gain traffic and views in search engines like Google, she says.

Digital marketers use AI to automate content creation tasks

Not only did this ChatGPT-post drive traffic to its site, but it saved its marketers time as they did not have to manually research brunch places.

The retailer is drafting at least one AI-generated blog post a week to test how the posts perform, Hudson says. UrbanStems marketers use templates to help guide the AI. Marketers can use saved templates and copy and paste information like name insert and word count requirements, she says.

“We don’t have to do everything from scratch,” Hudson says.

What’s left is copyediting.

“I find where it’s saving us time is truly the structure of the blog. It builds it out. We give it all the key questions you might want answered and it will give us some interesting facts. We then go in and tweak as needed,” Hudson says. “Instead of a blog post taking a couple of hours, it will take 20 minutes.”

AI results need human assistance

The AI results aren’t perfect, as sometimes the AI will make up descriptions for products it does not know, or it will not write in the tone UrbanStems’ brand voice, Hudson says.

“We asked ChatGPT to write about a bouquet with a certain kind of flower and the description was way off. It didn’t know our products at all,” Hudson says, without revealing more. “It was kind of guessing. So, we had to go back and do tweaks.”

UrbanStems is feeding ChatGPT its own product descriptions. This will help it better understand the tone of the “brand’s voice” as it learns, Hudson says.

“We’re still working on having AI understand our brand voice. AI tends to create cheesy writing [for descriptions],” she says.

So for now, UrbanStems is still writing its own product descriptions.

“We are using AI to draft all our SEO content, some of our blog content, and all our meta descriptions and title tags for SEO purposes,” she says.

Retailers use AI to generate marketing content

Babylist also uses generative AI for search engine optimization. The online marketplace uses Frase, a generative AI content writing software vendor.

Typically, marketers log into Google Webmaster Tools to search what to use for SEO, Babylist’s Grant says. Now, Frase generates frequently asked questions keywords that Babylist should use to make sure an article they’re writing is SEO-optimized, she says.

“That frees up our editors to take the time to write an article and create better quality content,” Grant says, without revealing more.

Forrester’s Pattisall says generative AI will allow retailers to send more relevant communication. Marketers can uncover new ways to grow and acquire new customers. They can also use the technology to keep existing customers at a cost that does not exponentially increase year after year, he says.

“[Retailers] can maintain their business margins,” he says “They can provide the type of marketing services that they’re good at in a way that doesn’t break the bank. [The technology] allows them to be profitable,” he says.

Generative AI produces images for social media

Another way marketers can use generative AI is to create images. UrbanStems uses AI software program Midjourney that creates images from text prompts. Marketers ask it to create an image of a 10-stem red and white arrangement of peonies, in a glass vase on a white background.

Hudson says the results were encouraging.

“While it still looked like AI — not quite like a true image — it was a great starting off point,” Hudson says. “I sent that off to the merchandising team and they were able to use that image for vendors to use as a reference. That’s a huge value to us.”

AI-generated images allow UrbanStems to experiment and create new bouquet designs quickly. They do not have to buy the flowers and conduct a photo shoot to mock up new designs, she says.

Hudson says the retailer uses the standard tier of Midjourney, which means it has limits on how many images it can have the AI create in a month. Businesses can also pay more to have the AI generate images in seconds or create images in 10 minutes for cheaper.  A basic plan can cost $10 a month to $120 per month for a mega plan.

UrbanStems uses Midjourney to create images of flower arrangements to use as product mock ups to share with vendors.

Using generative AI to generate social media images

During the summer of 2023, UrbanStems ran a test via social media to see if it could gain consumers insights using AI generated images.
The test used products UrbanStems already sells, but the goal was to see if it could gain insights before actually creating new products.

The retailer launched “This or That” polls using Instagram Stories, where viewers could vote on which bouquet they preferred. The stories were live for 24 hours. UrbanStems paired similar bouquets together that have similar price points and color schemes.

The retailer’s average interaction rate for Instagram stories is 20% of its 233,000 followers view the story.

The poll’s results reflected real-life sales, Hudson says. The winning bouquets had higher
online sales compared with the bouquets with fewer votes, she says. The bouquets Sol vs. Neon Lights polled from July 12-13, 2023, with Neon Lights as the clear favorite with 79% of the vote compared to Sol’s 21%.

In UrbanStem’s Summer 2023 summer poll “This or That,” in its Instagram Stories, The Sol received 21% vs. The Neon Lights (79%).

These results give Hudson confidence that the brand could do a poll like this with AI-generated images so UrbanStems will know what shoppers’ preferences are before going to market with those products.

What’s more, it’s insights like these that Hudson believes will lead to further investment from its management team in Midjourney and generative AI applications in general.

“I feel confident I could get our company on board investing in [higher-cost plans],” Hudson says. “It will take some of the heavy lifting off our junior marketers that no longer have to be in the weeds looking up SEO terms, for example. We want our employees to grow in their role and not be bogged down.”

Marketers test and learn from AI

Another way retailers are using AI is to help alleviate the workload for junior marketers. Some retailers like men’s footwear brand Koio are just getting started using generative AI.

For about six months, Koio has used ChatGPT for email subject lines, says Joe Anhalt, vice president, marketing, growth.

“It’s one of the first places we go for inspiration,” Anhalt says. “It might take a few times and we have to make tweaks on our own, but the prompts are showing us results.”

The shoe retailer uses the AI-generated copy for performance ads on Facebook and Instagram, he says, without revealing more. The brand uses software vendor Zenlytic with generative AI tool Zoe. Zoe answers questions and generates reports about how marketing campaigns and specific promotions are performing.

While Koio hasn’t tracked how AI is performing compared with human marketers, the tool has saved it considerable time, he says.

“The larger win for us has been not needing a full-time employee to produce some of these tasks,” Anhalt says.

AI has helped marketers free up time to do other tasks, Anhalt says. However, there is a learning curve for junior marketers, he says. The retailer typically pairs a junior marketer with a copywriter until they are confident the junior marketers can use ChatGPT or a similar tool to craft emails, banner ads and other site content, he says.

What does it cost to use AI?

Overall, Babylist, UrbanStems and Koio said the cost to use generative AI technology is affordable. For certain applications, ChatGPT is free and services like Midjourney and Frase charge “reasonable” rates, according to UrbanStems and Babylist.

It’s not about the cost, Forrester’s Pattisall says. “Retailers’ knee-jerk reaction tends to be, ‘how much money is this,’ or ‘how much money will this save us?’” Those are the wrong questions, he says. “The better way to think about this is how effective it’s going to be.”

Generative AI continues to evolve at an accelerated rate. As marketers learn how to use it, the technology itself improves. It’s an idea generator if nothing else, Babylist’s Grant says.

“An editor might ask ChatGPT to come up with 40 ideas for an Instagram post,” Grant says. “30 out of 40 of those ideas might be bad — but you end up with a gem of an idea from all the wacky weirdness.”

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The social media app’s Shop option, prominently displayed between the For You and Following feeds where users watch videos, presents a never-ending scroll of “recommended” random products, according to an early version Bloomberg has reviewed. It includes products from a $2.99 Nike sweatshirt that appears counterfeit to a $6.99 statue of a “naughty dwarf” sitting on a toilet. Many of the listings, including a budget planner and a waist-trainer vest, say they’re shipped from China, where TikTok’s parent company ByteDance Ltd. is based. That could reignite U.S. regulatory concerns if it puts user data in the hands of Chinese sellers.

The TikTok Shop marketplace will be competing with Amazon.com Inc. to sell a target of $20 billion in merchandise this year, Bloomberg has reported. The effort has been discussed internally as a “community commerce” effort, according to people familiar with the matter. That means it’s meant to capitalize on the app’s potential to bring people together through their niche interests. But the early version of the experience shows no evidence of the ultra-personalized algorithm TikTok is known for in its video feed, which has been key to its success in capturing users’ attention.

Amazon is No. 1 in the Top 1000, Digital Commerce 360’s ranking of the largest North American online retailers. Amazon is also No. 3 in the Global Online Marketplaces Database. The Digital Commerce 360 database ranks the 100 largest marketplaces by 2023 third-party GMV.

TikTok Shop marketplace listings

Instead, Shop is plagued by the same problems with a free-for-all marketplace that Amazon has faced. Categories and sub-categories of products are filled with overwhelming choice. The Home & Kitchen section shows a 37-cent-mini-car trash can next to a $16 four-foot computer desk and an $8.43 three-piece polyester satin sheet set. Misspelled brand names and implausible prices on many of the listings raise red flags for potential counterfeit sales.

TikTok said the article is “misleading” and that it doesn’t “represent the TikTok experience.”

The TikTok Shop marketplace highlights prices — which are remarkably low and listed in large font. It highlights coupons and free shipping offers in red and green, respectively. TikTok creates a sense of urgency by listing next to a product how many times it’s been sold. It also lists a countdown clock with the hours, minutes and seconds left of a sale.

The TikTok Shop marketplace does not list brands before users click on a product. The majority of product names seem more tailored to search engines and algorithms than human shoppers. One listing, for instance, touts “Women’s 3 Piece High Waist Workout Shorts Butt Lifting Tummy Control Ruched Butt Smile Yoga Short Pants.”

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Where are the products from? Are they real?

The most prominent section is for “Today’s Deals.” On the feed Bloomberg has seen, the top promoted product was a snail mucin-based face serum. The serum has recently gone viral on the app: a COSRX-brand Advanced Snail 96 Mucin Power Essence. The seller, listed as FIFTHLINYOUNG-4, advertised the serum for for $7.99, down from $39. But neither number aligns with the $25 price the brand COSRX offers on its website. The TikTok seller also says the product is manufactured in China, when COSRX products say on the packaging that they are made in Korea.

“Dear, yes, it is genuine,” the seller said in a message on TikTok. “The new store is offering discounts during events.”

The seller didn’t respond to questions about why the product says it is manufactured in China. CORSX didn’t immediately respond to a request for comment.

The snail mucin is also the only skincare item FIFTHLINYOUNG-4 has listed.

The other items by that shop include:

• A drone marked down from $999 to $88.
• Alisting featuring photos of the internet-favorite tumbler from Stanley without listing the brand name in the title or description.
• An LED tooth-whitening kit with photos that don’t match the brand name in the listing.

“Even in testing, there are over 200,000 verified U.S. merchants on TikTok Shop selling legitimate products — including over 150,000 beauty products that have been validated through our process and represent some of the biggest names in the beauty business,” a TikTok spokesperson said.

Sketchy sellers previously booted from Amazon marketplace

In June, a person familiar with the company’s U.S. Shop strategy said the company was focusing on American sellers. That strategy appears to have changed. A quick search reveals a number of Chinese brands on the TikTok Shop marketplace that Amazon has kicked off its platform for faking customer reviews. Amazon booted Guangdong SACA Precision Manufacturing from its marketplace in June 2021. Products from its brands Taotronics and VAVA are currently available on TikTok. So is the hot-selling headset brand Mpow. Amazon also removed its parent, Shenzhen Qianhai Patozon Network & Technology Co., from its marketplace.

In its terms that a user can click on before checkout, TikTok says “we make no representations, warranties, or guarantees, whether express or implied, that any content on TikTok Shop is accurate, complete, or up to date. We have no visibility or control over the contents on or available through those sites or resources and you acknowledge and agree that we have no liability for any such content.”

When a user checks out from the Shop tab, she can make purchases from multiple sellers at the same time in the same checkout. TikTok is processing payments through its app, Bloomberg has reported.

That means the company will also be collecting additional information about users, including:

• Card details.
• Billing address.
• Shipping address.

TikTok regulatory concerns

That may eventually lead to extra regulatory scrutiny for the company. TikTok has been under pressure from federal, state and local governments for its data privacy practices. The app’s Chinese ownership has sparked national security concerns over whether it can track or influence Americans on the app. The company has said it is working to isolate sensitive data from its American users so that only staff in the U.S. can access it through a separate unit called USDS.

“TikTok US protected user data is stored in the U.S. and managed by USDS,” a company spokesperson said. “And we work with third-party payment platforms to facilitate transactions on TikTok Shop, with all data managed by the payment partner.”

Lawmakers have been particularly sensitive to whether the app collects location data on users. Prior to the launch of Shop, the company said it updated its app so it no longer collects precise or approximate GPS data, only approximate location information.

But the TikTok Shop marketplace appears to open up some user data to its sellers. In TikTok’s Buyer Policy, the company says that “Sellers are independent controllers of the data that they collect about you via TikTok Shop, and TikTok is not responsible for their compliance with applicable law.”

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