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How Will a TikTok Ban Affect US Brands & Retailers?

How Will a TikTok Ban Affect US Brands & Retailers?

TikTok has become integral to marketing strategies and sales growth for many brands and retailers, particularly in fashion and cosmetics and personal care. How can your business prepare for the potential looming TikTok ban in the US?

Loss of market intelligence

The most obvious impact is that brands and retailers is the loss of a valuable tool for gathering market intelligence on trends and validating assumptions about which trends are ‘hot’. TikTok is an early indicator of what’s trending, whether it’s predictig a surge in demand due to a trend (like Adidas Sambas) or identifying a trend itself, , like the ‘mob wife aesthetic’ or ‘cottage core’. Capturing demand from younger audiences in particular, will intensify. This is where an AI-powered market intelligence tool can aid in identifying wider competitive and market data analysis, ultimately empowering brands and retailers to improve demand planning, create more targeted assortments, boost sell-through and reduce product deadstock.

New entrants fill the void

The impending TikTok ban in the US is more likely to have a detrimental effect on small businesses and emerging brands that have used the platform to grow and evolve with their customer base, especially those that sell on the new TikTok Shop platform. Small to medium business activity on TikTok contributed $24.2bn to GDP in the US in 2023. Larger, more well-established brands will be less impacted as they do not tend to sell via TikTok. There may be some disruption as buyers and merchants lose visibility into customer trends and reactions, but new avenues will open and they will adjust. The video app space is evolving fast, and new entrants will undoubtedly take advantage of the revenue potential from brands eager to reach their audience. Brands should also consider migration to established competitors, such as Instagram Reels or YouTube Shorts.

Long-term focus versus short-term trends

A potential TikTok ban is challenging, but it isn’t the end of the world. Developing a long-term strategy for reaching out to your audience and planning assortments that meet their needs with accurate demand forecasting is more sustainable than simply reacting to short-term trends. Don’t over-rely on TikTok as a significant channel; focus on best practices in modern retailing and invest in a retail planning and / or retail pricing and inventory optimization solution. The right technology will provide a broader, more stable view and take the guesswork out of creating and fulfilling demand as part of your retail planning and execution strategy.