Discovery-Led Commerce with TikTok's Patrick Nommensen

The CPG Guys are joined in the episode by Patrick Nommensen, Head, Strategic Initiatives, AMS & Europe, E-Commerce at TikTok.

This episode was record in Las Vegas at Shoptalk 2026.

Follow Patrick on LinkedIn at: https://www.linkedin.com/in/pnommensen/ 

Follow TikTok on LinkedIn at: https://www.linkedin.com/company/tiktok/ 

Patrick answers these questions:

1. Patrick, you’ve been vocal about how TikTok Shop is “discovery-led commerce,” where shopping starts with inspiration, not intent. In 2026, reports by others have estimated there are over 80 million U.S. shoppers on the platform, how do you preserve that sense of discovery at scale?
2. There’s a perception that TikTok Shop is driven by viral, one-off purchases. But we’re now seeing brands build repeat purchase behavior and long-term customer value. What tools are TikTok Shop providing for brands to move from “viral moment” to sustained brand loyalty?
3. We see the huge stars, but your data shows that micro-influencers often have 2x the engagement for CPG brands. How is TikTok Shop’s affiliate model evolving to help a brand like PepsiCo and flavor swap chips manage multiple micro-creators at scale without a massive manual headcount?
4. Live shopping is often seen as an Asia-first behavior, but we’re seeing strong adoption in the U.S. What’s different about how U.S. consumers engage with LIVE, and where do you see the biggest opportunity?
5. Traditional e-commerce starts with search and intent. TikTok Shop starts with discovery and inspiration. How should CPG brands rethink their entire go-to-market strategy in a world where consumers don’t search—they discover?
6.  Retailers like Walmart and Amazon have deep "closed-loop" measurement. How is TikTok Shop closing the gap to show a CPG Brand Manager exactly how a viral video on Tuesday led to an in-store purchase at a physical Kroger on Friday?
7. Amazon and Walmart have launched their own social feeds. What is the "moat" that TikTok Shop has that a legacy retailer can never replicate, no matter how much they invest in "social" features?
8. We’re hearing more brands describe TikTok Shop as a real-time “test kitchen” for product development. Can you share how brands are using the platform to test, iterate, and scale products faster than traditional retail cycles?
9. TikTok Shop is no longer just a test channel–many enterprise brands are now treating it as core infrastructure. What are you seeing from large CPG brands in terms of investment and long-term strategy?
10. If we sit down in 2030, is TikTok still an "App," or is it the underlying operating system for how the world discovers and consumes everything?

CPG Guys Website: http://CPGguys.com
FMCG Guys Website: http://FMCGguys.com
SheCOMMERCE Website: https://shecommercepodcast.com/
Rhea Raj’s Website: http://rhearaj.com
Lara Raj in Katseye: https://www.katseye.world/

DISCLAIMER: The content in this podcast episode is provided for general informational purposes only. By listening to our episode, you understand that no information contained in this episode should be construed as advice from CPGGUYS, LLC or the individual author, hosts, or guests, nor is it intended to be a substitute for research on any subject matter. Reference to any specific product or entity does

CPGGUYS LLC expressly disclaims any and all liability or responsibility for any direct, indirect, incidental, special, consequential or other damages arising out of any individual’s use of, reference to, or inability to use this podcast or the information we presented in this podcast. 

Transcript

Patrick Nommensen 0:00

Hi, I'm Patrick Nommensen from TikTok, and you're listening to the CPG Guys Podcast.

PVSB 0:08

Hello and welcome to the CPG Guys Podcast, set at the intersection of commerce and tech. Your hosts, Shri Raja gopalan and Peter V. S. Bond, explore how brands and retailers engage consumers in a digitally driven world. And now, here are the CPG Guys.

Sri 0:27

Hello and welcome to this episode of the CPG Guys. We're live at Shop Talk in Las Vegas. In what I would now call Peter Residency Suite, because what what is it? Are we officially in residency? I was just here like a month ago for CES.

PVSB 0:40

Are we officially in residency? I mean, are we bigger than like Donnie and Marie? Is this big? Six, eight times. Celine Dion is the goal. Celine Dion.

Sri 0:47

Miss Miss Celine Dion. Two decades plus, right? Yeah. And then I feel like we're here almost every month for some reason. We're doing our usual favorite thing, programming while being at a trade show with industry's key leaders. I'm, of course, Sri, your co-host, and also CR own co-founder at ThinkBlue Consulting, your trusted partner in your Omnichannel development journey. Get in touch with me at Shri at thinkblueconsulting.co. And do listen to my older daughter's music at www.rhearaj.com. Follow Lara Raj, my younger daughter, is a member of the world's fastest growing global girls group, Katseye. Just coming back from the Lollapalooza 4 City Tour of South America. We're headed to Coachella in a month's time. Can't wait. Rhea and I will probably be headed to India for an NBA thing shortly. And I'm joined today by Nana than my co-host and co-founder, PVSB, who also moonlights as head of industry and client engagement at Flywheel, the Commerce Acceleration Division of Omnicom, back in Vegas. But this is an important week for you and me, and it has nothing to do with Cat Sai, it has nothing to do with Vegas. What's going on this week in the U.S.?

PVSB 1:50

Now that the World Baseball Classic has concluded, it's signifying the beginning of the Major League Baseball season as my Dodgers go to achieve the three-peat, three in a row, and the Yankees hope to win their first World Series since 2009.

Sri 2:05

Keep saying that because we have 27 championships and the Dodgers are still making their way to double. Then I'll keep coming back and telling him it's like saying Brady's not the GOAT because he retired seven years ago. Just keep going. Make up your mind. Make up your mind. I'm going to go with we're going to win our.

PVSB 2:20

I'm winning this argument. No, you're not. He's got two World Series and one more conference. In hundred years, you got two. Jackie Robinson, greatest player in the history of baseball. End of the discussion. Nice to go ahead. Now wait a minute. Let's go to the judges. Sorry, they gave me the call.

Sri 2:38

Adam Judge, greatest sitter to exist in the basics.

PVSB 2:43

Two years in the major league. Shohei Ohtani, twitching, kidding, two-time MVP. And he's got more than two years to be able to do that. Let's see how long that arm lasts.

Sri 2:53

Let's move on. But in but in any event, of course, make sure you're subscribing to our podcast on your preferred listening platform, where you can get our latest episodes and even go back to consume some of the 580 plus episodes we've already published. And now let's see who our guest is today. We're joined by a seasoned digital strategist and corporate leader. Patrick currently heads strategic initiatives for AMS in Europe. E-commerce at none other than TikTok. Paparaj actually has followers now on TikTok. Are we talking about ourselves in the third person again, Tri? Who's Papa Raj? From nowhere to 160,000 in six months. That happened fast. Of course, our guest career spans steering UK e-commerce, guiding global product strategies, shaping public affairs for a global tech portfolio, including musical.ly. Which of course I might even say you know. I know, but I had to break it up. I know. So I have to have I have to have that conversation, Peter. With a pen chant for turning market insights into actionable growth, Patrick helps brands and platforms navigate multiple market challenges and accelerate impact in today's connected economy to break it all down. Welcome. We're thrilled to welcome Patrick Nommensen from TikTok. Hey, welcome to the CPG Guys. Thank you. Yeah, it's great. How's it to be in the dry dessert I am where and where are you headed down into Vegas from?

Patrick Nommensen 4:15

I am coming from Seattle, which is the very opposite of dry. Nice and wet and over.

Sri 4:21

Nice and wet. Awesome. So uh think thanks for joining us on the show. In the digital liner notes of this episode, we'll of course include links to your LinkedIn profile, your company's corporate website for our listeners to access while we go on with our conversation. So, Patrick, I'm gonna jump right into it and I'm gonna go into sh what I call shoppertainment evolution. And what that means is, you know, we've heard you be vocal about how TikTok shop is discovery-led commerce, where shopping starts with inspiration, not with intent. In 2026, reports by others have estimated there are over 80 million US shoppers on the platform. How do you preserve that sense of discovery at such a big scale that 80 million is no joke?

Patrick Nommensen 5:03

Yeah, the the growth of TikTok and TikTok shop in the US has been incredible. And we now have uh a community of over 200 million users just in the US. And uh what we're seeing is that discovery and discovery e-commerce is really driving the next chapter of e-commerce growth. So within e-commerce for the past many years, everything has been very search-driven. You have in mind what it is you're looking for, you open up your favorite browser, uh retailer platform, you search for size 11 man's black running shoe, and it's effectively a warehouse search. Very well said, a warehouse search. We will remember that. Very clinical, you might even say very clinical. Yeah, very clinical. And uh it's very efficient, but very transactional. And there's some bits and pieces of discovery sprinkled in there, right? Some ads, right? You might discover something new.

PVSB 5:56

It's also very much determined by the user's ability to actually describe what it is that that they're looking for.

Patrick Nommensen 6:05

Right. It relies on this assumption that there's intent. Yes. Um, and with so true. And with Discovery E-commerce, it's it's not like that. It's much more like walking down the main street in your favorite little town, right? You see a lot of nice little boutique shops, you do some window shopping, something in the corner of your eye is like, oh, that's cool. I want to go have a look. You go inside and the passionate shopkeeper explains to you the latest trends and gives you recommendations about what he or she thinks might be uh a great fit for you, uh a great style for you, gives you some, you know, some demonstrations about how to use this cosmetic or you know, how to dress.

PVSB 6:46

The credibility you give to that person recommending it is very strong because you feel a connection.

Sri 6:52

And TikTok shop brings that back in a digital way. Okay. You know, a few months ago we had R.J. Solpaker from TikTok shop on the show. Was it six months ago? Yeah, about that. Give or take. We did have a deep discussion on the shop aspect alone, but I spent, I don't know, two hours on TikTok every single day. Now, of course, I wear other hats in addition to being CPG guys, and I'm also looking at my daughter's creative content and other digital creators all the time. But I think I'm shopping on TikTok shop almost daily at this point, personally. That's true. We gotta get that old guy over there caught up. I'm you think I'm not?

PVSB 7:28

You think I I'm on TikTok shop all the time. I know he's buying stuff for his daughter all the time. It's mostly for my daughter. Unicorn. Anything that has unicorns or K-pop demon hunters on it, it I'm probably going to buy for her. In any event, Patrick, welcome to the show. There is a perception that TikTok shop is driven by viral one-off purchases. But from what Shriana are now seeing, brands are building repeat purchasing behavior and even long-term customer value. What tools are TikTok shop providing for brands to move from kind of that viral moment to actually sustainable brand loyalty?

Sri 8:03

I want to give you two examples of viral moments that were very real in the industry we heard from CPG, right? One was um we have a guest on the show frequently, Wall Street analysts, Nick Modi from RBC. He comes by, he talks about how Coca-Cola could have um pro uh could have um done merchandising along with protein because some kid on TikTok, a creator, actually decided to put protein powder in Coca-Cola and it just took off. And people were running to the store the very next minute or ordering online whatever and were buying protein powder and Coca-Cola, mixing it up. But the idea there would have been for Coca-Cola and a protein company to co-merchandise it. Well, they already made it for Core Power, which is their port protein milk. General Mills had this with um the fruit roll-ups and ice cream. Some creator on TikTok decided to combine the both and it just took off. And I remember when I was at General Mills, we sold out of fruit roll-ups for the next three months inventory and stock was gone. And it was out of stock. So back to the question. So I'm coming back to the question that Peter just asked. Today we feel that viral moments is everything. Tell us otherwise.

Patrick Nommensen 9:20

Yeah, I think this this thought that TikTok shop is designed for these viral one-off moments on and sort of like one-off activations is quite outdated. And uh certainly we're familiar with the viral moments that brands have had, both small and big, but we're also now seeing brands successfully build repeat purchase behavior uh and have TikTok shop become part of their daily revenue generation. There's a few uh uh tools or aspects that have really enabled brands to embrace that opportunity. Uh the first thing is around this real-time feedback loop uh that brands have with the community on the platform through uh engagement with comments, uh live stream session, feedback from creators. Brands see what resonates with users in real time and can take that information and uh incorporate it into their product development strategies and their go-to-market strategies.

Sri 10:20

So the tool actually gives them the data.

Patrick Nommensen 10:22

Yeah. So by leveraging that, it's much more than a you know, one-off viral moment. It's something that builds and is continuous. Uh, we've also released some new product features. And there's one in particular, Product Subscriptions, which launched uh, I think in December, just a couple of months back. And uh it's been very successful in our health category. Shoppers can subscribe to their favorites, receive discounts, have flexible delivery options, and it really creates convenience for the customer and of course great for the brands to drive their uh once they're opted in, they tend, you know, the opt-out rate is fairly insignificantly low.

PVSB 11:00

So there is an incredible long-term value to that solution.

Patrick Nommensen 11:04

There is. And the third piece is that the creator community, the affiliate community, as we call it, on TikTok shop has grown incredibly strong since you know the in the last year. And so currently we see that there's over 20,000 creators on TikTok shop in the US that have over six figure sales last year. So so we've moved beyond this moment where you know creators are doing this as a you know fun side project, you know, trying to sell some products. It's it's their livelihood, right? And so these creators are supporting the brands in their journey to drive major revenue on the platform. And these creators are really becoming entrepreneurs themselves, you know, becoming very familiar with uh the products, who is it good for, you know, the ingredients, et cetera.

PVSB 11:52

And that's there is a tremendous value for the creator to do that because it helps them become more appealing to brands that are looking to leverage their creative abilities. When they understand and they can actually play to what the brand is looking for, the likelihood that they're going to be included in whatever campaign they're doing increases substantially. Yes.

Patrick Nommensen 12:12

Yeah, absolutely. And uh, you know, TikTok is really this cultural center, right? Uh in many ways, it's where culture starts. So there's always opportunities for these brands to engage with the community and be part of the discussion.

Sri 12:26

You know, we have a discussion at home all the time because music family, that if you want to have the next streaming hit, that's not gonna organically happen on Spotify or Apple Music. It has to become a TikTok anthem, if you know what I'm saying. For reels. But I do have a question on the TikTok shop aspect. So should the CPG guys actually be selling on TikTok then? What do you think? Yeah, absolutely. Yeah.

PVSB 12:48

Peter's got one of them today. It's pretty classy, isn't it? That's how we're gonna make our lives. Okay, I think this is our future shrine. We do need to fit we seriously do need to figure out what our TikTok shop strategy is.

Sri 12:59

We're weak right now, so we gotta figure that out. But with Patrick coming, we can't disappoint him. So um you talked about the 20,000 creators making their livelihood. So I would bucket them into huge stars. They have a followers yet, probably in the millions. But your data shows that micro influencers often have 2x the engagement for CPG brands. So how is uh TikTok shop's affiliate model with these content creators evolving to help a big brand like PepsiCo? You know, another example is the flavor the flavor swap chips, right? Manage multiple microcreators of scale without a massive manual headcount.

Patrick Nommensen 13:36

Yeah, so the surprising thing is that many of these creators who are driving big sales actually don't have hundreds or hundreds of thousands or millions of followers. In fact, there's a lot of very successful creators who uh uh have far fewer followers.

Sri 13:50

Is there a minimum threshold you'll think of where you think it's going to be successful?

Patrick Nommensen 13:56

Actually, no. It's it's much more about the creators of quality of their you know how they how they show up, how well they understand their their community that they're part of. This is much more important than how many followers they have.

Sri 14:10

So with the CPG guys, how many followers do we have, Peter? How about CPG guys? On TikTok? Followers? If that. We don't have a strategy yet. We need to put it on. Oh we've got a shot. We have a shot. We got a shot. We could we could be contenders. We could be contenders. So so essentially to be successful, you don't need a massive follower base. Is it just the engaging content that makes you successful and then the base comes over time?

Patrick Nommensen 14:35

Yeah, I think for the creator to be successful, they need to understand the audience that they're talking to. Yeah. Um, and for the brand's perspective, they need to be working with the creators who understand the audience that they're targeting.

Sri 14:52

All help brands understand and say and kind of coach them, these group of creators or these names are ideal for the audience you're looking for for your campaign.

Patrick Nommensen 15:02

Yeah, absolutely. So it's a combination of both our teams working together with these brands. But then we also have a large and growing suite of tools available in the seller center for the brands so that the creators that the brands could be working with, right, are surfaced for their review uh and for their action. And I think a great example uh that I that I recently saw is uh there there was this nurse. She was coming off her shift, very long night shift in the emergency room, right? And uh she was in New York City, it was freezing cold, and she was saying, the air is so dry in the emergency room. And she was sitting in her dark, cramped car, and she's applying and she was talking about this this this um cream that she's been this lotion that she's been using on her face, right? And she's like, My skin used to be like so dry, and now like I don't have to worry about it, right? It's it's so real. It's authentic. You sense that. You sense it, right? Yeah, and this creator, I think she had like 12,000 followers. A video like that will be much more effective than a brand paying maybe hundreds of thousands of dollars to work with who's wearing like, you know, the white clinical coat, you know, talking about some pop star celebrity, you're not really thinking that that's someone who deals with dry skin issues in an emergency room.

PVSB 16:19

And yeah, very different.

Patrick Nommensen 16:21

And so this authenticity that this microcreator is able to deliver just can't be matched. Okay.

PVSB 16:28

I want to talk a little bit about live streaming. This concept of live shopping is often seen as being a very Asia first behavior, but we're actually starting to see strong adoption here in the US. From your perspective, what's different about how US consumers engage with live and where do you think there is a big opportunity for brands in this space?

Patrick Nommensen 16:50

Yeah, so we see that 76% of users who uh engage with TikTok shop live make a purchase.

PVSB 16:58

Wow. Let's not let's uh 76% of people who engage with TikTok shop live actually convert to the street. That means the users when they come to a live already are coming with intent. They're coming with interests. It may not be to intend to buy a specific item, but they're open to it.

Sri 17:17

They're coming with an intent. Um I want to see, and if it's great, I'm gonna buy it. Like you don't have to push them that hard.

Patrick Nommensen 17:22

Okay. Yeah, and because that live stream is surface to them in their feed, right, based on their interests. And so it's contextual. It's contextual. And uh so so the the conversion and the efficiency of the format is incredibly high, right? And the format itself enables the brand or the creator to demonstrate the product. It's like the shopkeeper, right, that we were talking about a few minutes ago. It's like you're going into the shop and the shopkeeper is explaining to you uh the latest product releases, who this skin serum or you know, this skin serum is good for based on the ingredients and what problems it might help tackle. It's interactive, you can engage in the comment discussion. So the format is just so innovative and allows the brands to uh build that connection with the consumer that they simply can't on other channels.

PVSB 18:16

Interesting.

Sri 18:17

That is pretty awesome, Peter, thinking about. So you know, we talked about discovery, but traditional e-commerce starts with search and intent. TikTok shop starts the other way with discovery and inspiration first.

PVSB 18:30

In traditional funnel, it's much more upper funnel than it is more mid to lower funnel.

Sri 18:34

Very much, with some exceptions like the live that we talked about. But even live starts with inspiration. Still very much middle to upper. How should CPG brands rethink their entire go-to-market strategy in the world where consumers discover versus search?

Patrick Nommensen 18:49

Yeah, it's a great question. And uh a lot of brands are thinking about this to um not only design their strategy for TikTok shop, but oftentimes redesign their whole like team and organization structure to be able to support um this new way of driving revenue, right? And so uh there's three specific things I think that uh brands commonly need to realize. Um the first thing is you know this concept of the brands being in over control of their brand. Yeah.

Sri 19:21

There's large brands typically.

Patrick Nommensen 19:23

Yeah, you know, that they'll have their 150-page brand guideline that goes down to the detail about uh you know the the the do's and the don'ts. And uh I'm not saying you know, that's obviously very important, right? Not saying uh get rid of that. Um, but I'm saying we need to move from the sort of very polished advertising to cultural participation.

Sri 19:45

Yeah, we think that format is outdated, by the way, here on the CPG guys. Completely outdated.

Patrick Nommensen 19:49

Yeah, a lot of brands though, you you know, they'll they'll produce an an ad and and every frame of the ad is like focus grouped, right?

Sri 19:57

Um and it's a shift. It's for risk aversion. It's an ad majority.

PVSB 20:02

That is that is not that is the problem, is that too many of them are not about actually growing their brands. It's to Sri's point, it is about risk mitigation.

Patrick Nommensen 20:10

Yeah, and it's to be successful on TikTok shop in order to engage with this community, you still have your standards, obviously. Sure. Um but you're shifting, you're updating from that very polished way of advertising, promotion to this sort of community participation and cultural participation.

PVSB 20:29

Do you do you see it as still being in some brand cases an issue of their reticence to yield any of the control on the messaging and what resonates to consumers to the creator? Because I mean, you you go back 10 years and I think that most of the brand managers looked at what was what was coming out on social media and they were trying to play the whack-a-mole game. Like, no, no, that's not my message. Is it not better for them to actually listen to what these influencers are doing and what resonates with the consumer to say, okay, that is actually how people are using my product. I should probably play that up rather than trying to push it down.

Patrick Nommensen 21:09

Yeah, absolutely. Because the conversation about your brand is happening on the platform, whether you're there or not. And so increasingly brands are realizing that they need to be there.

Sri 21:21

They need to be to swallow that pill that the conversations of the brands are taking place in TikTok, whether the CMO has an account or not. Yeah, exactly. Which is a favorite pet peeve.

PVSB 21:32

We we tell CMOs We don't expect you to post things on TikTok shop, but if you don't have it on your device and you're not paying attention to what's going on, that is a that's malfeasance in our in our opinion.

Patrick Nommensen 21:45

Yeah, we hear some nonsense on security and this and that. And very related to that is this concept that the brand is the only storyteller of their product. And so with it, you know, with TikTok in the US, we have a community over. Over 200 million users, right? And so the smartest brands are building with the community, using the creator feedback, the comments, the real-time responses to shape their trajectory. And so it's not only about the brand's voice, right? It's about the community's voice about your product.

PVSB 22:18

You know what I love about that stat, the 200 million Sri that says that there are more people in the US who use TikTok than don't use TikTok.

Sri 22:24

So I'm going to test your knowledge. Who has the most followers on TikTok in the world? Well, it's not a very tough one to guess. I have I have no idea. Guy called Khaby Lame in Africa. Highest followers. All right. And then Charlie Di Amelio, whose parents are appearing on what podcasts? The CPG guys who advertise their new brand. That's very good. So reminded to our audience we're speaking to Patrick Nommensen from TikTok. And I'm not kidding, guys, Charlie Di Amelio's parents will be appearing on the CPG guys to introduce the new brand portfolio of the Emilios. Okay. By the way, between both sisters. Yes. Between both sisters, if you add both the following, they are number two on TikTok after Kabulim.

PVSB 23:11

Okay. So anyway, Peter, over to you. Yeah. So obviously CPG brands love investing on platform advertising on platforms like Walmart and Amazon because they have such huge scale. Those are big markets places, but it's more than that. They have also developed very deep closed loop measurement solutions because it in increasingly it's about actually being able to prove that this investment delivered an outcome. So my question to you is how is TikTok shop closing the gap to show a CPG brand manager exactly how a viral video on Tuesday led to an actual even an in-store purchase in a physical Kroger store on a Friday? Like what is that connection so that they can start saying, oh, this is as important as what I'm doing on mid to lower funnel on an owned and operated site and investing on big marketplaces?

Patrick Nommensen 24:04

Yeah. So we're seeing that success on TikTok and TikTok shop does not stay like on TikTok shop. It has a halo effect. And there's a and there's a huge halo effect. And so it drives demand across every channel. But whether that's the brand's DDC, there are other e-commerce platforms in store. And so we are working on various suites of tools to enable brands to better measure that. So for example, uh just recently, TikTok shop, we launched an off-site performance capability in the seller center that helps merchants measure how TikTok drives sales beyond the platform. And so they can use pixel-based purchase matching within their own custom-defined attribution uh windows and periods to give the sellers a clear view, a very tactical, a clear view of how TikTok's impact is driving sales on other channels. And we're continuing to work on further tools in that space. We have some recent TikTok marketing science studies that show that two in five users who discover a product on TikTok actually go to a physical store to buy it, right? And TikTok drives 2.6 times more offline conversion and 1.8 times more online conversions than all other media channels. And so one recent example here is Fenty Beauty. So they measured up to a six times lift across all other channels, with one-third of those sales from net new customers. So it's not only a driver of revenue just generally, but also new customers, right? Which is a key goal for a lot of these places.

PVSB 25:37

This just reinforces what Shri and I have been saying for years now, which is that we are now in a world where 100% of all omni channel purchases are are influenced to one degree or another by digital advertising. And this is just the metrics of proof behind our argument.

Sri 25:55

Yeah, Fenty Beauty is a no-brainer for me, but I think the large brand, especially Food and Bev, I don't think they still get the players. They're not there yet. They're not there yet. But who's to blame, right? Not that we're playing blame game here. It's outdated CMO thinking from going to a MBA 5104 class at a Wharton or a Harvard or the IV training, wherever, which tells them the four Ps are the only thing that matters. Meanwhile, we've got this whole digital creator economy, which is influencing product purchases in spectacular ways. But Peter and I will say it's a chance for the smaller brands, the ankle biters, it's their heyday. Have fun, guys, while you're at it. That's what I would say.

Patrick Nommensen 26:34

Yeah. So these brands are, you know, first and foremost, investing on TikTok shop because of the revenue that they're driving on the platform. But this halo effect is just such a massive benefit that's totally incremental to that.

PVSB 26:48

I would also I want to add on to this and kind of emphasize it. It is important, it is important to understand that TikTok is a very powerful channel, but it's also important to understand, and this is some of the discovery that brands have to understand, what parts of their portfolio are positioned to leverage the TikTok shop experience, both from a margin structure, a price point, there, there's a whole lot that goes in. It's not like you throw any product in your portfolio and say, it's going to do really I'm sure you can sell it. The question is, can you profitably sell it? So there is some element of discovery in terms of what is right for a in a brand portfolio that that will work on TikTok shop.

Patrick Nommensen 27:30

Yeah. And as TikTok shop is becoming a bigger and bigger uh e-commerce platform in the US, and users are increasingly coming to the platform also with intent. And so last year in the US, there was over 103 billion e-commerce intent searches on TikTok shop, right? One which is massive. And so it's not only discovery, right? Users are coming to discover, of course, to be inspired, to have fun, to seek joy, right, on the platform. But then because they're in this shopping mindset, they're increasingly using the platform for those everyday purchases as well. And so you to your point, you know, there is a merchandising strategy, right, in terms of which products are the products that you're going to use to uh you know launch on the platform and work with creators and have a big content strategy behind. But then, you know, there's also ShopTab and there's also Search, um, which is great for those everyday products too.

Sri 28:28

You know, I personally use I'm obviously a sample of one, but I personally use TikTok every day for inspiration and discovery. I bought a black.

PVSB 28:38

How many text messages do I get from you with a TikTok video attached to it? And it starts almost from the from 7 a.m. Pacific time until after I've gone to sleep on the East Coast, I'm still getting videos from you.

Sri 28:52

I just, like I said, I just bought a black DNA at this point. So others are starting, I think, very early to understand this plot of digital creators, social feeds, things of that nature. We've seen recently Amazon and Walmart have their own social feeds. We don't believe it matches what TikTok has by any means, but what is that special moat that TikTok has that a legacy retailer can never replicate no matter what they do on social features?

Patrick Nommensen 29:19

So TikTok and TikTok shop is entirely built on discovery, on community and creator storytelling as opposed to this warehouse search first approach.

PVSB 29:30

If you think about those marketplaces, they were built for spearfishing. Do you see it? People go there knowing what they they come with intent and they know what they want to buy. That's a fundamental shift. T-shirt coming, Peter. Tell them what that means. Oh, we when you when when particular when particularly poignant and pithy comments are made on the CPG guys, we like to put them on t-shirts and then credit them and wear them. So you so I I don't be surprised. If you see, don't be surprised if you see pictures of the CPG guys wearing we'll give you credit. We won't we won't we we won't pay you any licensing fees, but we will give you credit on the t-shirt.

Patrick Nommensen 30:05

Yeah. So unlike other platforms, really culture and community starts on TikTok and it converts on TikTok shop. And so the products are demonstrated, validated, and shared inside this cultural and community context in real time. And that combination is just impossible for search-first platforms to replicate.

Sri 30:27

Okay. I think Amazon and Walmart are going to struggle. A legacy retail is peered. I don't want to name it.

PVSB 30:33

That wasn't, but they that was not the intent of their being built. And you shift it. It's a paradigm shift in why people go to that marketplace. It's it's not intuitive. It's like in your I want to talk a little bit about the RD engine. Uh we're hearing more brands described TikTok shop as a real-time test kitchen for product development. Can you share how brands are actually using the platform to test, iterate, and scale products faster than what they do through traditional retail cycles?

Patrick Nommensen 31:09

Yeah. So brands are certainly increasingly using TikTok to drive their product development and go-to-market strategy, receiving instant and real-time feedback from the community about what to what sorts of products they want, you know, what sorts of flavors do they want, what sort of challenges and problems do people have in their everyday lives and and what new products can be made to solve those. Informal focus groups. In form of like real-time focus groups. Real time. Whether that's a live room, right, and you're talking to potential buyers, uh, whether you're engaging in the comments or whether you're hearing from creators, right? Who going back to the point earlier, really understand their audience as well. And so, you know, there's this process that's being created. And the the the best brands here are launching products, right? They're watching the real-time response, they're iterating and they're scaling. And they're able to do that much quicker than they can if they're rolling out products to a shelf in a store.

PVSB 32:09

And I have to imagine as they go to other channels to introduce these products that have been conceived and tested in TikTok shop, that they have metrics to then share with some of the other marketplace partners of ours, say, here's what it did on TikTok shop. That has got to accelerate the adoption process for getting those items listed in distribution on other marketplaces. They already know what works.

Sri 32:33

Brilliant. Brilliant. So as I as I think through what we just talked about, you know, focus groups on the live platform, I don't see TikTok as just a test channel. Many enterprise, those legacy brands, are probably thinking of it as infrastructure for brand development and innovation development. What are you seeing when you talk to large CPG brands in terms of investments, commitments, and then inclusion of TikTok in long-term strategy? I mean, I know when I worked for General Mills, I would sit there in these monthly kind of leadership team meetings and insist everybody in that room must have a TikTok account, they must follow. Again, I wouldn't I wasn't putting pressure on people to be digital creatives themselves because of all the comms issues, corporate comms issues, but I'm like, you must follow. But what are you personally seeing from large CPG brands?

Patrick Nommensen 33:27

So TikTok shop is no longer an experimental channel. It's increasingly part of the core strategy. Increasingly. And whether those are new brands or very established brands. So a great example is what Hershey's recently did uh around the Olympics. Uh, you may have seen. They came out with this Olympic gold medal Hershey suite, right? Launching it on TikTok shop, and it was super successful. And, you know, here you have a very established, you know, company, I think they've been around for over 100 years, leveraging uh TikTok shop, right? And they were able to tap into the community in a really interesting way. So there's like these three videos that I very clearly remember seeing. You know, one of them was this performance athlete, and after their intense workout, they treated themselves to the chocolate, right? And so so this really caters to the fitness and athletic uh community.

PVSB 34:26

It's a it's a reward for like a really grueling workout.

Patrick Nommensen 34:30

And you could see they were just like and the other example was this mom vlogger, and she was hosting a backyard Olympics Games champion for her kids. And the you know, the winner got the uh the gold medal treat, right? And so this caters very much to you know the mom. And then there was another one which was a baker, and uh he was making this dessert where you know he melt the the chocolate uh into this uh dessert that he was making, and that delivered to another audience. And so here you have um a very established brand leveraging TikTok and totally obviously with the Olympics, totally being relevant and part of the cultural conversation, but also tapping into these three, and those are just three examples, very distinct communities to drive their sales.

Sri 35:17

I'm no kidding. So Patrick sitting in front of you are CPG guys and so guess what's gonna happen? We need to do a live.

PVSB 35:25

We're gonna have to do a we're gonna sell CPG guys branded MMs online.

Sri 35:29

Absolutely. And one thing I'll note, I want to give credit to Mars and Tim Label. They had that TikTok strategy, right, when they did the five gum partnership. Who did they do that with? Cat's eye. And the first thing they did was put it on the TikTok platform.

PVSB 35:42

It was brilliant. It was brilliant. All right, so let's close this out. Patrick, is we move to the end of this decade, right? My question to you is if we look at TikTok, is it still considered an app, or is it it more likely to be an operating system for discovery and consumption of consumers? Where are we in the evolution?

Sri 36:03

I want to wrap that up and ask you, is it where the world will discover and consume everything?

Patrick Nommensen 36:09

I think the future of commerce is certainly very much discovery-led, not search-led. And TikTok shop represents a fundamentally new retail model, right? Where entertainment, community, and commerce is fully integrated. And the growth on TikTok shop since launching in the US around two and a half years ago has been scaling really rapidly. Enterprise adoption is accelerating. More brands are making this their core channel. And so this isn't a trend. It's a it's really a structural shift in how users shop. And I certainly think it's going to continue.

Sri 36:46

Awesome. Let me remind our listeners, you can find all of our content by simply going to a web browser and typing cpgguys.com in the URL. If you or someone you know is something to contribute to this ongoing discussion on the CPG Guys, please send us an email at contact at cpgguys.com. To our audience, I want to thank you for the clicks, likes, comments, DMs, meeting us at trade shows, coming to our events, recording episodes with us, and to all of our sponsors as well. We're always grateful for you. The show doesn't exist without all of you. You work with us all year. Peter, pleasure doing this in Las Vegas with you. Give me the big takeaway from this conversation.

PVSB 37:27

My takeaway is how TikTok shop is not just uh a test and learn environment. It is a core component of how a brand should think about engaging consumers and build long-term loyalty. This, if you're not, if it's not in your DNA as a brand, you're missing an enormous opportunity that drives measurable conversion at scale.

Sri 37:52

Patrick has made me rethink a little bit of philosophy on the in-store shopping model. You know, there's too much rhetoric that exists in the CPG world today that says 80% of all shopping happens in-store, and that's what we should focus on, and hence displays. Now when you specifically call it out the warehouse-based shopping, next time I'm in a store, even if it's grocery, that's what it is. A grocery store is a warehouse for a bunch of things. And you're limited to what's available in that assortment that day at the time off based on stock. And the reason that that model has existed forever is to be profitable. They need you to buy a basket. But with the with the increased use of AI in shopping and the whole presence of digital creators on not just on TikTok but other platforms as well, more and more individual consumers are moving to item-based shopping, inspiration, discovery, one item at a time. That world, that warehouse-based shopping model, I think it's a threat to them. And I guarantee you, Peter, the in-store brick-in-mortar industry will fight that hard and keep insisting it's the only way to shop, and everything else is blue ha ha, which is quite the opposite of how the consumer behaves. But in any event, Patrick, thank you for joining us on the CPG Guys. This was a pleasure. Thank you. Thanks for having me. And don't be surprised if you see that t-shirt soon on the CPG Guys. That's a wrap of this episode off the CPG Guys.