In the supply chain and procurement field, success often depends on accurately predicting demand and quickly responding to unexpected challenges. The modern market is becoming increasingly unstable, with disruptions becoming more common.

However, many experienced professionals in the supply chain industry may not have fully recognized until recently how much social media, especially TikTok, can influence supply chain forecasting and management.

The Power of TikTok

The COVID-19 pandemic underscored the essential role of supply chains while also boosting the influence of social media, particularly TikTok. TikTok saw a 654% revenue increase between 2019 and 2020, becoming a key platform for business marketing. Hootsuite predicts that TikTok will reach 2 billion monthly active users by the end of 2024, with adults spending more time on it than on any other app by 2025.

TikTok’s impact on consumer behavior can drastically change product demand. A viral TikTok video can cause a sudden surge in demand, catching supply chains unprepared.

For example, in early 2023, a makeup palette inspired by the TV show *Euphoria* was released by a new brand and went viral on TikTok after a beauty influencer posted a tutorial. The hashtag #EuphoriaPaletteChallenge quickly gained millions of views, driving traffic to the Lemonhead LA website. Within hours, the palette sold out, overwhelming the brand’s supply chain, which was not prepared for the sudden demand. This led to stockouts, long wait times, and negative reviews.

To solve these issues, Lemonhead LA increased production, invested in advanced inventory systems, and improved communication with suppliers, enhancing their ability to respond to viral trends and future demand surges.

The TikTok Supply Chain

A survey by Zero100 found that two-thirds of supply chain professionals believe digital technology has shifted the balance of power toward demand, making it hard for supply chains to keep up.

The concept of the “TikTok Supply Chain” offers a solution to this imbalance. This approach involves collecting and analyzing demand data from social media and other digital platforms, allowing supply chains to:

– Enable real-time re-planning: By constantly monitoring social media trends, supply chains can quickly respond to changes in demand. For instance, Nike’s hyper-local stores replace 25% of their footwear every two weeks based on digital insights from nearby consumers.

– Embed responsiveness into operations: Manufacturing must become highly flexible, able to scale production up or down based on digital demand signals. Companies like Prose, which creates custom hair care products, and John Deere, which uses additive manufacturing for engine parts, show how dynamic production can meet changing consumer interests.

– Own the supply chain story: Sharing supply chain efforts on social media platforms can help brands shape demand and build consumer trust. Sharing stories about sustainability, transparency, and responsiveness can enhance brand reputation and align with consumer values.

The Influence of Gen Z and ‘Doom Spending

Consumer behavior among Gen Z is adding even more complexity to the market. Faced with economic uncertainty, high living costs, and substantial student debt, many Gen Z individuals engage in “doom spending”—impulsively buying luxury items, fashion, and experiences to cope with stress.

Maria Melchor (@firstgenliving) highlights this trend, saying, “When older people ask me how young people are affording nice things that they wouldn’t even buy for themselves, I tell them it’s because we can’t afford anything else. When houses are a million dollars plus, we’re giving up any lingering hopes of homeownership.”

Social media platforms like TikTok and Instagram fuel doom spending through trends and hashtags such as #TikTokMadeMeBuyIt, which drives demand for fashion, beauty, and tech products. 

Doom spending often traps young consumers in debt, especially with Buy-Now-Pay-Later (BNPL) schemes. Nearly a third of Gen Z is worried about their ability to repay BNPL debts.

Louise Hill, Co-founder and CEO of GoHenry, advises, “All kids and teens need to understand how money and spending are linked to their self-esteem. You can’t buy a lifestyle, and you won’t feel better about the future by spending too much now. Instead, teach kids that a strong financial future is within their reach by helping them become financially literate. This way, they will have the confidence to save for a range of goals, say no to peer pressure, and find better ways to cope when they feel down.”

Despite these challenges, over 40% of young people aged 6-18 report that recent economic difficulties have motivated them to save more. However, the lack of financial education in schools leaves many unprepared to manage their finances effectively. Educating Gen Z on financial literacy is crucial for empowering them to make informed spending decisions and reduce the risks of doom spending.

Leveraging AI to Manage Viral Demand

To handle the unpredictability of viral demand, companies must enhance supply chain resilience through AI-powered forecasting technology. By analyzing real-time data, including social media trends, customer behavior, and external factors like weather and economic conditions, AI can improve demand forecasting, inventory management, and production planning.

For example, logistics providers can use AI for route optimization, selecting the most efficient routes based on fuel consumption, canal blockages, and geopolitical events. Meanwhile, warehouses can deploy IoT sensors for real-time inventory tracking, offering precise stock visibility.

As social media-driven demand fluctuates rapidly, businesses must adapt with flexibility in manufacturing and logistics and understand the unique behaviors of Gen Z consumers. In today’s digital landscape, those who quickly adapt and integrate AI into their supply chains will turn challenges into growth opportunities.