TikTok Subscriptions Won't Challenge Amazon But Could Help Creators
Will TikTok’s Subscription Feature Compete with Amazon?
How do I know something won't challenge Amazon? When the press says that something will definitely challenge Amazon. It's through this lens that I review TikTok's shop feature that is in testing similar to Amazon's "Subscribe and Save" feature.
Why Are Subscription Models Important in eCommerce?
Subscription businesses are great for replenishable and giftable categories—not everything, but given the difficulty of customer acquisition, it provides a huge leg up for those who can leverage it. Amazon's Subscribe and Save was an early player, but Amazon has not innovated on the concept in any significant way.
Why Would TikTok Be Testing Subscriptions?
Several categories that are popular on TikTok, like beauty, skincare, health, and wellness, lend themselves to this model.
Customer acquisition for creators is difficult. If you acquire them once, why not try to acquire them in a more valuable format?
Alternatives to subscriptions for creators are more difficult to manage and set up.
How Does This Benefit TikTok Creators?
Imagine if you are a creator. You are not an eCommerce expert, but you love creating content and you are trying to increase your eCommerce revenue. You don't want to go through the hassle of managing and running an entire Shopify store. Why not just take the few features you want: buy from a video, and subscriptions, and leave the rest behind?
Sure, you might need a full-blown eCommerce site as soon as you start to access multiple channels, and it's risky to put all your eggs in the basket of a single social media site, particularly one with increasingly tenuous ownership.
What Makes TikTok a Unique eCommerce Platform?
But often, ease trumps all.
And popular creators will always follow the eyeballs. As a result, I do expect that TikTok will keep on adding popular eCommerce features until it looks like a new kind of eCommerce format. One driven by inspiration.
How Does TikTok’s Approach Compare to Shopify’s Shop App?
You might say this is in a similar vein to what Shopify is trying to do with its Shop App. It's just light on the inspiration (the interface is just too traditional), and the top benefit—Shop Cash—seems to mostly expire 90 days after you earn it. In contrast, something like Rakuten points lasts as long as a year after the last time you earn points.
Could TikTok Expand Subscriptions Even Further?
I do believe that TikTok could go further with subscriptions. This gives me the feeling that TikTok will try to build a subscription-based consumer app as well for people who enjoy buying on the format, in exchange for discounts. If that's the case, I would predict such a format would become one of the top few retail subscription programs in the United States quite quickly.
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