PetSmart acquired Pet360 for $130 million in cash and up to $30 million more in future performance-based payments.
The beauty e-retailer sponsors videos made by YouTube stars, an IRCE speakers says.
BeautyChoice.com knew it wanted to feature video on its site but also knew it didn’t have the resources to produce product videos on its own. Scanning the marketplace, the beauty products e-retailer quickly realized it didn’t need to make its own video. Its target consumer was already producing videos and posting them to YouTube. The e-retailer reached out to some of the most popular and prolific content creators about beauty—women in their late teens and early 20s—and arranged for them to mention and link to BeautyChoice.com in their videos.
More than 300 million video views in less than two years has sent site awareness and sales through the roof, says Jordan Blum, CEO of BeautyChoice.com. Blum will discuss his experience working with YouTube stars at the Internet Retailer Conference & Exhibition 2011 in San Diego. Blum will speak during a session entitled “Compelling content on a budget” from 1:45 p.m. to 2:30 p.m. on June 16.
“For us to try to produce our own videos and grow our own stars would be tough,” Blum says. “We said: ‘Let’s be real here. We can’t get into the production business,’ and we knew we wanted to drive traffic. These girls are already a big influence on YouTube and had large numbers of subscribers already.”
Kandee Johnson, a professional makeup artist, is one YouTube poster to whom BeautyChoice.com reached out. She has more than 480,000 YouTube subscribers, with each receiving an alert every time she posts a new video. Her YouTube channel, where all her videos are collected, has received nearly 15 million views to date. She posts one sponsored video a month that links to BeautyChoice.com. “She’s a great pitchwoman for a product. She just talks about it and has an exciting personality,” Blum says. “Every time she launches a video, it is sales time for us.”
Blum says BeautyChoice has video arrangements with about 40 YouTube stars, who are sent free products to talk about in their videos and also are paid a rate based on the number of YouTube subscribers they have. Blum says compensation ranges from a few hundred dollars per video to more than $1,000 for the most popular reviewers. He says videos typically have a click-through rate of 2% to 4%, with up to 4% of those consumers buying the product or products featured on the video. However, Blum says the greater benefit of working with the reviewers is the brand recognition BeautyChoice.com has achieved. He says about 30% of site visitors are direct visitors, meaning they type the e-retailer’s name into the address bar.
BeautyChoice.com also embeds the YouTube videos within the associated product pages on its e-commerce site so visitors who arrived at the site another way can see the products in action. The site does not use manufacturer-produced videos on its site. Blum says when he evaluated the video landscape he saw that manufacturer-made videos in the beauty category were only eking out a few thousand views per video. “We’re using video differently than most retailers. We use them to drive traffic to our site, and we’re driving big crowds,” Blum says.
Internet Retailer’s editors asked Blum to speak at IRCE because of his creative approach to sourcing video and his expertise at leveraging social media.