Welcome back to Meagan’s Newsletter: The Gen Z POV, where I break down trends, industries, and tech with a Gen Z lens every other week. I’m Meagan and I’m so happy you’re here.

My last edition’s deep dive on the rise of paid membership communities completely popped off, with over 500k people reading it in the first 48 hours 🤯 Thank you all for reading, sharing, and all the awesome comments — I so appreciate it.

We’ve also got hundreds of new subscribers (!!), so for those new here, I’m a Gen Z expert and write about the trends I’m seeing in my life. I was formerly an investor, and now run Gen Z VCs, the largest community of Gen Z innovators globally with 24k+ members from 80 countries and now a broader movement. I started the community 2 years ago, and I also consult with CMOs, CEOs, and execs on reaching Gen Z / GTM strategies around community building, socials, impact, and more 💫

Now onto the theme of this newsletter… the future of social commerce.

To start, the new TikTok Shop feature has come up organically on my FYP multiple times this weekend (now has completely taken over my algorithm!) and they’re really making a push in the U.S.. I mention this because soon enough, there will be more people in the world that have TikTok than those that have television.… let that sink in. Bye bye commercials, hello social commerce, where creators are the new storefronts!

• The #tiktokmademebuyit hashtag has 47.6 Billion views (vs. 4 Billion views for the world’s most televised event ever, Queen E’s funeral)

• 92% of TikTok users said they take action after watching a product in TikTok

And this goes way beyond TikTok — there are plenty of other companies that are banking on the fact that creators are the next big storefronts.

Amazon’s Influencer program is a big one with creators raking in $10k per month on their storefronts, but there are also newer players like Flagship & Canal capitalizing on creator-owned storefronts and disrupting giants like LTK (which drives $3 Billion annually to brands via influencer social commerce).

Now… let’s get into it! ⬇️

Do you remember WornOnTV, the site that scrapes outfits worn on TV shows/films and directs you to the exact replica where you can purchase it online?

I used to use that website religiously. When I first started building out my “professional wardrobe,” I would watch Supergirl on The CW, take note of the outfits Supergirl would wear in her office scenes, then go directly to WornOnTV to buy those same outfits. Here’s one I still have that I bought directly on the site. And the site is still functioning to this day, promoting outfits worn on Emily in Paris, Euphoria, The White Lotus, and more.

All that said, this type of behavior isn’t limited to our TV screens anymore… and the internet only perpetuates the hype. 2 weeks ago Taylor Swift stepped out into NYC wearing these $673 butterfly jeans, and they almost immediately sold out (even with the price point). Tons of Gen Zers ran to TikTok to recreate the look for cheaper (see here) and a $32 dupe from fast-fashion brand Cider popped up as well to meet the demand.

TikTok has become our new WornOnTV, and creators are our new celebrities. Social proof is everything, and thus, social commerce is driving our consumption in a big way. Below, I’ll cover three overarching trends, and the evolution from “rented” creator storefronts to “owned” creator storefronts:

• TikTok Shop (in-app eComm sales) is predicting to reach $470Bn in GMV in 5 years… why this is a big deal

• Creators making real $$$ with Amazon Storefronts

• The rise of curation-led infrastructure powering social commerce like Flagship/Canal and giants like LTK

TikTok Shop… A $470Bn Opportunity

For those who aren’t familiar, TikTok Shop is TikTok’s in-app eCommerce platform that allows users to purchase products directly from the videos that pop up on their FYP. Last year, TikTok Shop achieved $4.4Bn in GMV in 2022 & expects that number to reach $470Bn in 5 years.

That may sound like a big number, but it feels attainable because TikTok is truly helping brands meet consumers where they are & making the buying process frictionless.

How it works

The above screenshots are from my FYP (For You Page) yesterday. I was watching a snippet of Ashton Kutcher on a Barstool Sports Podcast, and you can clearly see his "Dad" hat stands out… it certainly did to me!

And right above the caption, there's a "Shop" button that shows you can view/purchase that same hat Ashton is wearing in the video.

I can buy that exact hat (or other variations) right within TikTok without having to leave the app. I can even discover other items on Barstool's "Shop" page if I dig a little deeper!

Because Gen Z is digitally native, we’re used to a 1-2 click buying experience directly in app or via a link-in-bio — there are very few things on the internet that will prompt me to really “put in work” to actually purchase them. One recent memory was Maia Knight’s Fanjoy merch drop, where I counted and had to click through 8 times to actually buy a crewneck. Optimizing the discovery-to-purchase journey for Gen Z consumers is so important… our attention span is only 8 seconds, so you have to grab us early and direct us right to your cart.

Why this matters

Soon there will be more people in the world that have TikTok than those that have television.

TikTok has 1.05 Billion active users globally. To put in perspective, 1.72 Billion people in the world have TVs.

Not only that, TikTok already serves as a top-of-funnel for businesses and creators to monetize their products and services. Now it's just easier to sell those in-app. Take this small business with 366k TikTok followers that sells hair scrunchies… she made a video about using TikTok Shop which went viral with 13.7M views in 2 days. That led to 200 new sales via TikTok Shop and ~$2.3k in revenue!

For context, this small business has sold over 30,000 oversized scrunchies using her link in bio on TikTok ($345k in potential revenue) 🤯

The controversy / headwinds

TikTok Shop hasn’t been an immediate slam dunk in the U.S., as there’s been some hesitancy from retailers to hop on board. According to Business Insider, as of last month, there were fewer than 100 US retailers actually selling goods on the platform. TikTok has been saying the program is invite-only, but in reality, there’s a public landing page that says you can be up-and-selling in less than a day if you get approved as a seller.

This is largely due to the potential ban in the U.S. that’s giving retailers pause to invest in building on the platform, which completely makes sense. However, this is a reminder that TikTok is a global platform, and the U.S. represents only 14% of their global user base.

There’s still a massive opportunity for TikTok to seize this market through native social selling, with creators leading the charge and making it 10x easier for their followers to purchase. And they’re really putting in the work to make this happen: serving ads to users, subsidizing shops, and even offering education — this video ad was served to me multiple times this past weekend despite not being a business or seller.

If TikTok Shop gets shut down, the idea around “creators as storefronts” will still live on… which I’ll get to in this next two sections. First with Amazon to lay the groundwork, then creator-led infrastructure platforms like LTK, Canal, and Flagship.

Making $10k+ a month with Amazon Storefronts

Believe it or not, we can thank Jeff Bezos for the growth of influencer marketing and social commerce. Amazon’s affiliate marketing program, Amazon Associates, has been around since July 1996 and was one of the first to launch on the internet. Today, they have a 50% market share in the affiliate marketing sector, and video-first creators are leveraging Amazon Storefronts in a big way.

One of the best ways to sell something is by showing, not telling… video content does this particularly well, when creators showcase the tools they’re using & outfits they’re wearing organically. Let me show you what I mean.

@sailor.rozema

this bagel gui11otine is my favorite thing in the whole world

This video of a creator cutting her bagel with a fun little machine has over 100 Million views.

What’s the first thing you do when you see this? Try to find the product on Amazon & see how much it costs.

There were several people in the comments reacting to this video — whether it was around the price of the product, how useful it really is vs. a knife, or simple comments like “*opens amazon*” and “unnecessary but sadly i’d buy it.”

Let’s do some quick math, assuming this creator put this $18 bagel slicer in an Amazon storefront, which offered creators a 1-10% commission on each product sold.

100 Million Views —> 1% of viewers clicking on the link (1 Million people) and then 1% of those who clicked purchasing the product (10,000 people)

If this creator @sailor.rozema was a part of Amazon Associates and drove $180,000 in sales (10,000 purchasers x $18 bagel slicer)… she could theoretically make between $1,800 (1% commission) and $18,000 (10% commission) on one viral video.

Now imagine the creators who do this for a living… posting multiple times a day, about multiple products, across categories like beauty, tech, lifestyle, and fashion. There are thousands who do this.

• Sal Farzin, @SimplySalFinds, is a full-time tech creator with almost 3 million TikTok followers. About 80% of his six-figure influencer income comes from promoting products on Amazon.

• @OurFavoriteFinds on TikTok have dedicated their entire account to building (and monetizing) multiple Amazon storefronts. On their TikTok, they test if products work, showcase the best products they bought that month, share life hacks using products, their random Amazon finds, and more.

And this is not just for techie products and people… plenty of influencers use Amazon storefronts for all kinds of categories.

If you’ve been reading this newsletter for a while, you know I love to write about TikTok it-girl Alix Earle. She charges between $40-70k for a sponsored post (different from affiliate), but can drive upwards of $2 million in sales on a single video. Just showcases the power of her brand & how highly her audience values her recommendations.

It’s no mistake Alix is capitalizing on this with Amazon Associates. In her bio, she openly directs her 5M+ followers to check out her Amazon Storefront over everything else! She has 52 different storefronts ranging from prom dresses, festival necessities, content creation must haves, skincare, spring break and more — all tailored for her audience, based on the things she’s actively using/wearing in her videos.

I myself have purchased from her storefronts, and I can guarantee there are hundreds of thousands of others who have as well. Alix is raaaaaaaking in the cash, with social commerce making it all possible.

Creator-Led Infrastructure: From LTK to Flagship & Canal

Amazon is not the only game in town. We can’t talk about affiliate marketing and social commerce without LTK (formerly known as LikeToKnowIt), an app and platform allowing people to “shop their screenshots” and purchase directly from their favorite influencer’s social posts. Today, LTK is profitable & valued at over $2Bn, and the platform drives over $3 Billion in sales annually for brands (with influencers taking a 10-25% cut). Think of it like an entirely shoppable Instagram feed, where you follow your favorite influencers & discover new styles.

Something to think about… almost all of LTK’s influencers are women, and more than 130 have become self-made millionaires through the platform 🤯 LTK screams millennial, which makes sense since it’s been around since 2011.

So it’s been 12 years since LTK launched & there’s been a ton of innovation in the category since then. At the end of the day, creators on LTK are still “renting” their real estate (similar to any creator on a social platform), with each creator’s store being a part of the LTK ecosystem with LTK branding.

The future seems to be moving in the direction of creator-owned storefronts. So instead of visiting XYZ creator’s LTK page or Amazon storefront, they’d be visiting XYZ’s own website with a curated storefront. Canal ($27M raised, founded in 2021) and Flagship (raised a seed round in Feb 2023 led by Index & Sequoia) are paving the way here.

TLDR… so what’s my take?

Is the future of social commerce owned or rented by creators? I think it’s both.

On TikTok Shop: Even if TikTok in the U.S. gets shut down, I still think it’s a massive opportunity globally to enable followers to shop in-app, especially for creators who have small businesses. It feels like a frictionless way to sell products and a no-brainer to at least test. My entire FYP has been creators leveraging the TikTok Shop tool vs. any big brands or retailers. For brands, I’d focus on influencer marketing as a channel for now.

On Creator-Led & Owned Storefronts: I think you win here by making affiliate rates transparent (so creators know where to double-down & what to sell that feels authentic with their audience), and giving the creator more tools to be able to iterate as they promote their storefronts. One interesting caveat though, is even if a creator has their own branded storefront, they’re still relying on social media to promote the products/stores. It’ll be interesting to see how newer platforms like Flagship & Canal unlock distribution or growth hacks for creators to increase storefront visibility.

Oh… and we haven’t even scratched the surface on live shopping in the context of social commerce. Guess we’ll have to save for another day 😉 

And as promised, here are a few things (tech, culture & life) I’m intrigued by at the moment.

• Tech: A lot of crazy AI stuff in the past few weeks. Josh Browder outsourcing his entire personal financial life to GPT-4, and even crazier, an AI generated song featuring Drake & The Weeknd going massively viral on socials and streaming platforms (which has since been banned / taken down by request of the artists and their management). Grimes on the other hand has encouraged her fanbase to “use her voice without penalty” for AI-generated songs, as she’s agreed to split royalties 50/50 for fan-created content. There’s a lot of work that needs to be done around the regulation of AI and protection of artist’s voice and IP, but in the meantime, I’ll be enjoying these fake AI-generated videos of Kanye West covering Taylor Swift songs like This Is Me Trying (1.1M views) and Call It What You Want (414K views). Idk how Taylor feels about these, but it feels like poetic justice to me… and they’re oddly beautiful renditions of the songs.

• Culture: The “If I Were A Fish” song has taken the world by storm. Watch this video, it’s so heartwarming with people all over the world stitching it, reminding us all to embrace the joy in being different. This song has been stuck in my head for the past few weeks, and when you hear people say they’ll miss TikTok… this is what we mean. It led to like 500 people gathering in Washington Square Park to hear the creator perform it live with her guitar… all from TikTok 🥺 💗

• Life: Boy oh boy do I have updates.

  • Hosted an AI panel in NYC highlighting a guy (now friend!) who went viral on LinkedIn for asking GPT4 to become a CEO and “create the most profitable company you can build with 1,000 USD and 1 human hour per day.”

  • Was the Keynote Speaker at the PEI Conference to encourage PE & VC firms to let their younger investors have a voice / public brand! PE Hub gave me a nice shoutout to their 70k+ investors, and Deloitte included Gen Z VCs in their annual VC survey… pretty cool.

  • My LinkedIn post about Blackpink/Coachella/KPop went viral with over 1,000 likes! We love the intersection of tech & culture.

  • Last but not least… remember when I wrote about the $115Bn opportunity for content & IP-led studios and I talked about the extension of IP into products and experiences? WELL. I finally attended the Bridgerton Experience for their opening week in NYC… and it was magical. If you’re looking for a fun night out, 10/10 recommend. I bought a tiara, gloves… the whole nine yards. Well done, Netflix.

P.S. you can win cool things by referring the newsletter!!!! Pls share with likeminded friends if you enjoy reading this every other week 😀