68% of Retailers Believe the Sale or Ban of TikTok Would Impact Their Business and Conversion Rates

First Insight’s Report Finds 82% of Retailers Plan to Increase Ad Spend on Facebook in the Event of a TikTok Ban

First Insight’s latest report, TikTok’s Uncertain Future, reveals that retailers may find themselves caught off guard by potential disruptions if a TikTok ban goes into effect. The report finds that while 68% of retailers acknowledge that a TikTok ban could impact their business and conversion rates, only 28% have a contingency plan in place.

"Retailers risk losing a powerful product discovery platform if TikTok is shut down,” said Greg Petro, CEO of First Insight. “With over two-thirds of consumers discovering products on TikTok that they later purchase elsewhere, the clock is ticking for retailers to develop contingency plans. Retailers need to understand where their shoppers will be if TikTok goes away, and which platforms can deliver the same product discovery and customer acquisition magic that TikTok presents.”

The report also reveals that 82% of retailers will increase their advertising spend on Facebook in the event that TikTok is banned, with both consumers and influencers believing that Facebook will be the dominant platform. In fact, 64% of influencers have already noticed shifts in consumer behavior, such as increased engagement on other platforms, signaling that consumers may be preparing for life beyond TikTok sooner than retailers realize.

Key Findings from the Report Include:

• Influence on Holiday Purchases: TikTok currently holds a lot of power when it comes to holiday spending, with 73% of consumers planning to use TikTok as inspiration for their holiday shopping, and 59% intend to make purchases directly through TikTok Shop.
• Retailers’ Reliance on TikTok: 81% of retailers surveyed use TikTok to sell directly to consumers, but nearly 70% have struggled with stockouts and delays due to viral content. The unpredictability of “TikTok made me buy it” moments highlight the challenges retailers face in managing inventory and planning for demand spikes.
• Facebook Will Dominate: 39% of consumers named Facebook as the platform where they will spend the majority of their time if TikTok is banned while 40% of influencers agree that Facebook is where they would shift their focus. Instagram followed as top choice for 32% of consumers and 33% of influencers.

Why This Matters for Retailers

The findings suggest that retailers need to be more proactive in monitoring where their customers are shifting their attention and preferences. Relying solely on historical trends or assumptions can lead to missed opportunities and costly mistakes. By integrating AI-driven, Voice-of-Customer (VoC) data into their planning, retailers can make better decisions on which influencers to partner with, how to optimize their pricing strategies, and where to focus their marketing spend—ensuring they stay ahead of trends and continue to resonate with their target audiences.

To download the full report, visit www.firstinsight.com.

Methodology

First Insight’s findings are based upon a May 2024 retailer survey executed through InsightSUITE, with 185 responses from U.S. retail decision-makers. Responses were sorted and filtered based on role, title, company size, and retail sector. Analysis focused on feedback from merchandising, marketing, and consumer insights management at retailers and vertically integrated brands offering apparel, footwear, and home décor items. Consumer and Influencer data was collected from an August 2024 survey that focused on highly engaged users of the TikTok platform. Further details on the findings are available upon request.

About First Insight

First Insight is the global leader in Voice of the Customer retail solutions, transforming business decision-making through actionable consumer insights and AI. First Insight’s platform enables retailers and brands worldwide to boost revenues and profitability by informing strategic decisions with consumer data and removing guesses and personal opinions. Trusted by leading retailers, vertically integrated brands, mass merchant retailers, and wholesalers, First Insight leads in optimizing strategy, product, pricing, planning, and marketing decisions. For further information, visit www.firstinsight.com.

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