2 big trends we're bullish about in 2024

It’s almost 2024 and the AdTribe team has been reflecting on the big ecomm trends we’re most bullish and excited about going into the new year. We know Ecomm operators already have more than enough marketing channels to pursue, but there are a two emerging opportunities that we think brands need to pay some serious attention to.

1. Social Commerce

Social media platforms continue to get better and more sophisticated with their commerce integrations. The experience of product purchases directly on Meta and Google have gotten cleaner and more intuitive over the past year. The trend of consumers shopping directly within the media platforms where they are spending their time will continue is here to stay and it’s no longer a novel or fringe concept. And the big lurking elephant in the room when it comes to social commerce (and the one we’re most excited about), is TikTok Shop. We think it’s going to be a game changer for DTC companies.

First, a quick primer on the basics of TikTok Shop:

• TikTok Shop officially launched in September 2023. It has its own dedicated tab within TikTok, where consumers can scroll through different products and shops or search for specific brands or product categories directly within the app.

• The add to cart and check out process all happens within the app and you get order and shipping confirmation emails directly from TikTok.

• TikTok videos that mention or promote specific products now have TikTok shop links embedded within the video. Both brand and creator accounts have the ability to link to TikTok shop items. Creators earn an affiliate commission on purchases.

• If you’ve spent any time on TikTok recently, it may have felt like half of the content on your FYP were videos promoting one TikTok shop item or another. (Did you see about a thousand videos touting the benefits an electric scrub brush? Or was that just me?)

We’re bullish about TikTok Shop because:

• Rapid growth and potential market size: estimated revenue in October 2023 was $260 million, up 43% from September 2023, its launch month. That’s an implied annual revenue of $3 billion, with the potential to be more than $20 billion if it continues its current trajectory of double digit month-over-month growth.

• Large built-in audience: TikTok has 150 million users in the US and 69% of active users (around 74 million) say they are willing to purchase something from TikTok Shop.

• Opportunity for a wide range of brands: we’re seeing many examples of small and emerging brands to perform exceptionally well on the platform. The Unbrush Hairbrush has sold almost 700K units since it launched on TikTok Shop. A self-help journal called the Shadow Work Journal has sold almost 500K units. The Atlantic even wrote an article about their runaway success on TikTok.

However, despite all of the potential of TikTok Shop, do we think every brand should jump on this emerging sales channel? No. Here are some factors to consider to determine if it’s right for your business:

• Is Gen Z your primary customer target? TikTok still heavily over-indexes with Gen Z. 55% of TikTok Shop customers are between the ages of 18-35.

• Do you sell relatively low price products? The average order value on TikTok Shop is in the $30-$45 range. So, if you sell a $1,000 cold plunge tub, TikTok Shop may not be the best fit for your business, yet. 

• Do you have relationships and the ability to seed product with TikTok creators? 80% of Tik Tok Shop videos come from non-vendor accounts, so having the ability to seed products to creators will be critical to your success on the platform.

^{*TikTok Shop statistics we referenced are from Coefficient Capital’s 2024 Consumer Trends Report.}

2. AI Powered Personalization

Capturing your target customer’s attention has never been easy and in an increasingly fractured media landscape, it’s only going to get more difficult in 2024. Consumers are looking to connect with content that feels uniquely tailored and relevant to them. A new report from Twilio Segment shares that 92% of companies are using AI to personalize messaging that’s helping grow their businesses.

We’re bullish about AI Personalization because:

• the quality has gotten better: with advances advances in generative AI, creating high-quality and compelling content and messaging that is tailored to customers at the individual level has gotten much easier.

• it’s gotten cheaper: personalization tools used to be an expensive and complicated product that only large companies with scale and resources could utilize. But, as investment continues to pour into the AI industry, competition among Saas companies offering AI services has increased, which in turn has made those services cheaper and easier to access.

The scope of AI Personalization is quite broad, but we are most excited about Content Personalization and Recommendation Personalization. Here are a few AI Personalization tools we like and recommend to our clients:

• Clerk.io  helps deliver the most relevant search results to your customers using keywords, sales data, behavior, and availability with an intelligent search engine built specifically for e-commerce.

• Kimonix is like your personal collections and product recommendations manager - with this tool, you can create, organize, compare via A/B testing, and promote smart collection pages. It also enables you to suggest products throughout your store utilizing sophisticated criteria and personalized one-on-one strategies.

• Sniffie helps increase profitability by setting optimal discounts and automating the pricing. As more brands start to go omni-channel, managing pricing across all sales channels will become increasingly more difficult. This tool can help you manage it more efficiently.

Similar to TikTok Shop, this is not a one-size-fits-all strategy. Do we think every brand should be investing in AI Personalization? No. These are the types of businesses we think are primed to benefit from Personalization tools:

• Businesses that operate in categories like fashion & apparel, beauty, home goods, and marketplaces are ideal because they will often carry lots of SKUs and consumers need help finding the right product.

• Travel & hospitality industry is also ideal for AI personalization because having an unique tailored message served at the right moment can have a large impact on conversion.

What we’ve been discussing around the AdTribe Watercooler

• Amazon Ads for non-Amazon vendors: Amazon is testing an interesting new ad product - display ads for brands that do not currently sell on Amazon. Given that 20% of all search volume originates on Amazon, this could be a new opportunity for additional reach and brand awareness for DTC companies. The program is still in closed beta testing mode, so there’s not much information in terms of performance, but it’s a new development we’ll be watching closely. More info here.

• Third Party Attribution tools: Marketing attribution is notoriously imprecise, particularly on platform attribution metrics, which have a tendency of over-attributing performance to themselves. More and more marketers are turning to third party attribution platforms like Triple Whale and Northbeam Analytics. Pros: consolidate information from multiple advertising platforms into one dashboard, ability to slice and dice data in multiple ways. Cons: expensive subscription, data can also be misleading if data flows are not set up properly. Read more about the pros and cons.

• Coming Soon page on Shopify: Launching a business in the future? Rolling out a new product? Even if you don’t have anything to officially sell yet, setting up a ‘Coming Soon’ page a no brainer for generating pre-launch excitement and capturing leads. Shopify wrote a post with all the basics. Our additional tips for optimizing a ‘Coming Soon’ page: add an email sign-up form to capture leads, share an enticing offer or call to action, build a relationship with your email leads by sending out regular updates.

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