TikTok Tick-Tock ⏳: Time Is Running Out on Traditional Retail

Kiara Springs, a 25-year old, is part of a new retail trend, shares The New York Times.  She sells about $10k/month online but doesn’t own a brick-and-mortar retail store, pay a landlord rent, go to the wholesale markets, or have a POS system. Her “sidewalk” to get traffic is TikTok, and her “POS” is Amazon.  Her “stockroom” is the brand’s warehouse. She has an Amazon affiliate account and goods are drop shipped.   

Social Media + Online Affiliate Portal = New Retail 
I do not think retailers like Ms. Springs are good for our industry, from the brick-and-mortar stores to the wholesale markets. Social media-based shopping largely bypasses brick and mortar commerce because it relies on affiliate marketing programs that most indie stores do not offer. This social media commerce is good for Amazon and other online platforms like Shopify that have been honing affiliate marketing for decades. (It's hard to imagine that Amazon IPO'd in 1997.)   

The traditional benefit of a retail store was it got the foot traffic.  Now, one can get that online, such as via TikTok.  One used to face high barriers to entry to opening a store, such as finding a high-traffic location, obtaining suppliers, and handling payments.  Now one can get all this online via Amazon or Shopify.  Social media acts as the consumer acquisition part of the sales funnel, and low cost, quick e-commerce portals like Amazon and Shopify complete it.  

A 25-yr old women can run a retail operation, no lease, no employees, and no workers comp policy. While that may sound liberating, it’s bad for our clients and bad for us.  We have to act. 

Social Commerce Is a Growing Threat
Ms. Springs reported making about  $10k/month. If she gets a 10% affiliate commission, that’s $100k in retail sales that an indie boutique lost out on.  Kiara says her best month netted her $50k— that’s $500k in orders a boutique lost.

If there were just one—or maybe a few thousands of Kiara’s—that may go unnoticed.  Social commerce could be a nuisance we write off. But there are millions of Kiara's doing this and the number is increasing. Imagine if millions of Kiara's promoted Juliska or Vietri on her TikTok, and then added that product to their Amazon store. That would shrink our retailers’ sales. 

Millions of boutiques are losing out on hundreds of millions of dollars. Social commerce is eating the profit margins and revenue of our brick-and-mortar client base.

Wholesale Marts
The trickle down effect of this is that that the boutique will buy less at the marts. 

Fighting Digital Goliaths and Digital Dianas
Big companies are aware of this changing landscape. Shoppers are changing where they buy, and from whom. Abercrombie & Fitch’s CEO recently said that flagships went from being a giant store to a cellphone and tablet screen.  Many large retail players are investing their money in stores with smaller footprints and moving their investments to digital. The issue for our indie stores is they are too small to compete against these big-box store, the Zolas, and the Amazons, and too digitally naive to compete against the Kiara Springs. They’re stuck between 'digital Goliaths and digital Dianas.' 

Our Role
If stores are shrinking to the size of a cell phone screen, that in theory would be good for us as we provide the 'screen,' but we don't own a foot-traffic generation tool (i.e. social media platform) nor do we offer an active affiliate marketing service. Yet.      

We’ve explored offering an affiliate program that our stores can use. (Please see an example of our beta affiliate program here: https://www.theivyhouse.com/affiliate.cfm ) One issue we face is that affiliate selling is often a drop ship model. For it to work, the merchant often has to have the item in stock.  For an affiliate program to work for our retailers, we need to know the store's stock and 99% of the time we don't because we’re not their POS software. For starters, we could offer affiliate selling for products from our 65 Syncing brand partners that already share stock with us.    

We Have the Ideal Affiliates 
We handle about 6,000 wedding registries each year. Our brides make a great affiliate audience because they know the store and the products they registered for. They may be at home because they may soon have a child and need a flexible schedule.  They are young and digitally savvy.  

The clock is TikTok-ing on us creating an affiliate program for our indie stores. While we can't build a TikTok, we can complete our nascent affiliate program.

Homework

• Sign up for an Amazon affiliate account. Apply at: https://affiliate-program.amazon.com/
• Once approved, try to offer something from your company.

.......

Related

Amazon affiliate information: 
https://affiliate-program.amazon.com/help/node/topic/GRXPHT8U84RAYDXZ

Kiara’s Amazon affiliate influencer store:
https://www.amazon.com/shop/jusskiara

Kiara’s TikTok page:
https://www.tiktok.com/@jusskiara

The New York Times article on Kiara Springs:
https://www.nytimes.com/interactive/2024/04/18/business/media/tiktok-ban-american-culture.html

Bookshop.org relies on affiliate programs with brick-and-mortar bookshops as well as influencers. Their general affiliate program: 
https://bookshop.org/affiliates/profile/introduction

A post sharing how Amazon and TikTok have been competing for influencers' attention: 
https://bridge.myshoplocal.com/news.cfm/23357/Affiliate-Marketing-TikTok-Amazon-and-Your-Indie-Shop

A post sharing how PayPal grew by referrals (a sister of affiliate marketing): 
https://bridge.myshoplocal.com/news.cfm/22245/Referrals-Johnny-Softwareseed--

A post sharing how brands use ambassadors (a type of affiliate):
https://bridge.myshoplocal.com/news.cfm/21745/Ambassadors-

Tags:
nyt tiktok affiliate selling influencers

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