TikTok is still battling a coming ban in the United States, partnering with Oracle (NYSE: ORCL) and Walmart (NYSE: WMT) to keep its 80 million American user base. While Oracle has a bigger stake and will get paid through it, Walmart has a smaller stake, and while they still get a bit of revenue sent their way, the mega-corporation has gotten something a lot more valuable than money.
Walmart is now first in line to advertise to a new generation of potential consumers. Walmart has mostly been a brick-and-mortar giant, but with the pandemic ravaging the world, they're working to compete in the online market and up their shipping game. They've even released Walmart Plus to take on Amazon Prime (NASDAQ: AMZN), and at a much lower price point. They've even got the advantage of having stores everywhere to make shipping cheaper and faster. But they've been behind on the e-commerce market until now.
With their TikTok partnership, not only can they corner the online market with ads, they can also use the app as a market research tool and strengthen their online presence. Using a social media app as a way to introduce themselves to the next generation could be the vital step they need to stay relevant. However, they've set their sights on a tough demographic.
Surveys and studies have found that Gen Z shops based on their morals; they tend to reject big companies and brand names simply because of their business models and how they interact with their customers and employees. The use of influencers for brands is also a popular marketing tool to target millennials and Gen-Z. If a large company wants to have success advertising with the next generation, picking a social media star to advocate for them is the best way to do it. In addition, smaller online businesses do well with Gen Z, because of their word of mouth styled advertising. It's easy for companies to scoff at this idealistic style of shopping, but Gen Z is about to hit the work force. In a world of social media and cancel culture, companies that aren't socially conscious could find themselves in trouble, no matter their advertising platform.