Product Pricing, Seeding, Affiliate Strategies And Other Tricks Of The Beauty Trade For TikTok Shop Success
In just two years, TikTok Shop has generated $2 billion in beauty sales, but Emily Rhodes, acting head of personal care at TikTok, emphasized during a Beauty Independent In Conversation webinar last week that it takes much more than hopping on the platform for a beauty brand to do business on it.
“A successful TikTok content strategy is really about consistency, community and creativity,” said Rhodes, who was joined by Freddy Wolfe, CEO of Truly Beauty, and Yasmin Zeinab, founder of Abi Amé, for the webinar. “You can find many ways to connect with your audience.”
She advised brands to be intentional about the products they choose to list and promote on TikTok Shop, noting that differences often emerge between the items that gain traction on TikTok Shop over other sales channels due to the former’s video-first format. For small brands with tight resources, she recommended investing in one to two products across seeding and content to rev up organic traffic.
According to Rhodes, product seeding to content creators employing TikTok Shop typically generates a 3X return on investment after about 90 days. Brands then typically start to amplify traffic with campaigns and advertising tools they can opt into on the platform like GMV Max, which allows them to extend and optimize their reach by segmenting content by audiences.
Though the threat of a ban in the United States still looms over the app owned by Chinese company ByteDance, Americans are turning to TikTok Shop to discover products in astounding numbers. Rhodes underscored that over half of the country is on TikTok and 76% of users report that they learn about brands and products through creators on TikTok Shop, where health and beauty is currently the top-performing category. Data from market research firm NIQ compiled by publication The New Consumer and investment firm Coefficient Capital shows health and beauty sales on TikTok Shop totaled $1.34 billion in January through July last year.
TikTok Shop isn’t just supercharging discovery through the intertwining of shopping and entertainment, though. Rhodes pointed out it’s also helping to build brands by generating awareness and halo effects that carry into sales channels outside of TikTok. “The platform’s very new, but…we’re seeing very real impact when it comes to brand building in terms of awareness, building hero products, creating communities and even retail expansion,” she said. “What other sales channel gives you a sale here and a lift everywhere else?”
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Affiliate Strategies
Body care brand Truly Beauty has become a nine-figure business in about five years largely due to its presence on TikTok Shop, where between 10% to 15% of its sales are now generated. To develop top-of-funnel awareness, the brand taps TikTok Shop’s vast affiliate network, but doesn’t exert much, if any, control over what creators communicate about its products in video reviews. Instead, it takes a broad approach with affiliates and aims to saturate the platform with as much content on the brand as it can generate to keep it competitive with TikTok’s algorithm.
Wolfe said, “Any one video probably didn’t do that much in sales, but, if we have a thousand of those videos together, it kind of adds up to something that works pretty well for us.”
Wolfe believes that small brands don’t need to throw substantial cash at product seeding on the platform to start gaining traction. Brands leveraging paid advertising on it should expect a slower ramp of up to 90 days before they see any return, depending on how well their product featured in promotions is being reviewed.
Wolfe said a respectable return on ad spend (ROAS) lands between four and five on TikTok Shop, meaning that for every dollar spent on advertising, a brand is generating $4 or $5. Truly’s top-performing products on the platform close in on a 10 ROAS. “The algorithm has to figure out who to market to,” cautioned Wolfe. “It takes time to get that going.”
A bootstrapped brand with a scrappy team, Abi Amé fosters a small community of creators on TikTok Shop who post multiple pieces of content a month to generate awareness for the brand. Taking a narrow and deep approach with affiliates has boosted the brand’s gross merchandise value on the platform 10X since January of this year. Abi Amé seeds about 100 products per month for TikTok Shop.
“That strategy works really well because we’re able to get more out of every product that we seed,” said Zeinab. “I think, once an affiliate is talking about a product multiple times, it builds trust with their audience and community, but it’s also feeding information into the algorithm.”
Content Strategies
Beyond affiliate content, Truly utilizes two types of content on TikTok Shop to fill out its marketing funnel: brand-developed content for middle-funnel customers looking for more information on the brand and live sales for bottom-funnel customers looking for specific discounts before purchasing products. Truly typically held three to four livestreams a week when it launched on TikTok Shop.
Although still nascent in the U.S., livestreaming can unlock huge opportunities for beauty brands on TikTok Shop. Rhodes highlighted the success of Canvas Beauty as an example. Last June, the body care brand became the first company on the platform to generate $1 million in revenue from a single livestream. Months later, it beat its own record when it racked up $2 million in sales during a single Black Friday livestream.
Abi Amé went viral on TikTok Shop in the initial 30 days it was on the platform and has discovered that stitch content performs the best to convert customers. Zeinab noted that seven out of 10 of the brand’s subsequent viral moments were spurred by stitches. She said, “One of our key learnings in the first 30 days was that stitch content works really well for us, and we’ve just continued to double down on that.”
To shake up its educational content on the platform, Abi Amé has found that delving into trending topics has been effective for engagement. A TikTok video it posted on April 13 using skincare terms to dissect the love triangle between pop stars Selena Gomez and Justin Bieber and Gomez’s music producer fiancé Benny Blanco garnered 45,000 views.
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Prices and Discounts
Dispelling the narrative that customers only snap up cheap products on TikTok Shop, Rhodes shared that the average order value for body care on the platform is higher than in rival sales channels. She added that TikTok Shop body care sales are outpacing body care sales in the beauty industry generally, with conversion in the category increasing 2X compared to e-commerce competitors.
Earnest Analytics figures compiled by The New Consumer and Coefficient Capital show the average order value for TikTok Shop was $32 in the 12 months ended March this year compared to $77 for Sephora and $78 for Ulta Beauty. Over that span, the average transactions per customer was 7.2 for TikTok Shop, 2.8 for Sephora and 3.3 for Ulta.
Truly has seen products priced from $30 to $70 and above perform well on TikTok Shop. Wolfe counseled brands to refrain from offering overly steep discounts and adopt a sustainable promotion strategy on the platform. Truly has held 10- to 15-minute flash sales during livestreams targeted to certain products. However, they represent a small percentage of its sales on TikTok Shop, per Wolfe. Last year, a $99 holiday kit from the brand sold out without ever being discounted.
“We can talk about high ROAS, but it’s still easy to lose money,” said Wolfe. “If you offer big discounts and then there’s a lot of fees, it’s easy to kind of lose sight of that. I would say a mistake is not sticking with your price. There’s a lot more appetite for higher price items.”
Last year, Abi Ame’s $77 Soft Skin Set containing Summer Skin moisturizer and Soft Touch Exfoliating Body Mask caught fire with its 30-year-old-plus consumer base and became among its top-selling body care products on TikTok Shop. The brand opts into marketing campaigns around key gift-giving holidays like Mother’s Day and constrains promotional periods to protect its brand equity.
“We try to limit the discounting to two to three key moments a year and make that very publicly known,” said Zeinab. “Otherwise, the product is on full price on the platform.”
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