Retailers Embrace Social Commerce

TikTok Fuels Viral Apparel Sensations

From Lululemon Athletica (LULU) to Zara (IDEXY), retailers are embracing TikTok to create buzz and sell more apparel. The strategy appears to be paying off. TikTok, which is owned by parent company ByteDance, has become the destination for teens and young adults to find fashion inspiration and items to purchase. That has resulted in items going viral and selling out. These items have included a Lululemon skort, a pair of Aerie (AEO) leggings, and other items.

TikTok’s searchable hashtags and its lineup of influencers with millions of followers make it easy for a product to go viral. It does not hurt that the app has more than one billion active users. Many of these users are teenagers—a demographic which spends an average of 12 hours per week on social media apps.

Gap Invests in Social Commerce

Gen Z is known for craving authenticity in the products they wear. They also tend to seek input from others, which is one of the reasons why TikTok has been so effective for retailers. Products tend to go viral more quickly on TikTok than on Facebook’s (FB) Instagram or other social media platforms.

That was the case for a vintage Gap (GPS) hoodie which made an appearance in an influencer’s TikTok video earlier this year. That drove the price of the hoodie on resale sites to as much as $300 and prompted Gap to send the TikToker hoodies in different colors. The company also manufactured a fresh batch of brown logo hoodies which are available for presale and will ship this fall.

Social Commerce Poised for Growth

While teens are leading the charge in purchasing apparel based on TikTok videos, social media is influencing purchasing decisions for all generations. Social commerce sales are forecast to reach $36.62 billion this year—up 35.8% year-over-year. TikTok is driving a lot of that but so are Facebook, Instagram, and other social media apps. In some other countries around the world, social commerce has even more influence than in the US. For example, in China in 2021 social commerce is expected to earn more than $350 billion.

Social media has become a part of our daily lives. Retailers are beginning to understand the power of social commerce and it is taking off in the US. It will be interesting to see how this trend will impact the tech industry.

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