Online video helps e-retailers attract, engage and inform customers—and to sell merchandise
by Paul Demery
When fashion-conscious tweens and teens think of where to find cool clothes to wear while strutting down school halls this fall, they may not initially focus on Sears, a retailer better known for Kenmore refrigerators and Craftsman screwdrivers.
Then again, maybe they will.
Sears, Roebuck and Co., through an ambitious online video strategy built around Disney Channel singer and actress Selena Gomez, pulled out all the stops this summer to reach kids as they created their back-too-school look. Gomez, with the energy of a, well, Disney pop star, and clad in Sears apparel, prances, dances and jumps her way through a series of videos that energize the retailer's merchandising and marketing strategies, says Dana Schueller, director of marketing, planning and program development for Sears parent Sears Holdings Corp.
"Our goal is that these videos will continue to increase awareness and consideration of Sears as a destination for back-to-school fashions," she says.
Lounging with video
The videos, distributed through YouTube.com as well as other social networking sites, are based at Sears microsite ArriveLounge.com, which engages visitors with videos featuring Gomez and other Disney stars from the Wizards of Waverly Place TV show, and lets shoppers enter an online Style Room, where they can click on the stars' images to purchase their outfits on Sears.com.
To build on the excitement of visiting ArriveLounge.com, Sears is also running a contest there that lets visitors submit homemade rock videos to compete for a spot in the Sears Air Band, which will perform this fall at the MTV Video Music Awards.
What was that about refrigerators and screwdrivers? Since launching in June, the video-heavy ArriveLounge.com has more than doubled the number of visits and average time per visit for Sears compared to its 2008 online back-to-school campaign, Schueller says. More than 1,000 contestants have submitted videos for the Air Band performance, videos that are getting widely distributed by visitors throughout the web, she adds.
Online retailing, meet the power of online video.
Online video has emerged as a key component of successful online retailing that can not only engage consumers and lead to sales, but build store traffic and reduce customer service calls. And experience is teaching online retailers valuable lessons about how to best use video, such as how long consumers will watch a video and when text overlays can improve results.
Video fans
The growth of video on e-commerce sites mirrors what's happening all across the Internet, as consumers become increasingly used to seeing video everywhere, from news sites to Facebook pages. And those videos are getting watched.
The number of U.S. Internet users who viewed online videos reached 157 million in June, a record number for a single month, according to comScore Inc.'s Video Metrix service. Exceptional news events, notably the death of pop music artist Michael Jackson, boosted June's total. But online video viewing has been steadily rising over the past few years, according to the Pew Research Center's recent report, "The Audience for Online Video-Sharing Shoots Up," which is based on a survey this year by the Pew Internet & American Life Project.
Underscoring the importance of online video as a marketing tool for retailers, 62% of U.S. adult Internet users watch videos on YouTube and other video-sharing web sites, up from 33% in late 2006, the report says.
That level of adoption makes video no longer optional for a successful e-commerce site, some retailers contend.
"Retailers who don't have video will be at a disadvantage," says Gordon Magee, Internet marketing and media manager for pets supplies e-retailer Drs. Foster & Smith, which has about 300 videos on DrsFosterSmith.com. "Video is to the Internet today what the Internet is to retail. In the old days a web site was a bonus, but now itÕs a requirementÑand today video is in the same category. When people go to a web site, they want video to be entertained and to learn."
Adds Peter Cobb, co-founder and senior vice president of marketing at eBags.com, where about 230 videos attract about 1,700 unique viewers every day, "There may be 20 or more e-commerce sites that sell the exact same product, often at the same price, so all of us in the online retailing business have to come up with ways to provide compelling entertainment and information, and present it in a way that makes us appear trustworthy, so people feel comfortable giving us their credit card. This gets to why we have online video, because it goes to the top of the list of what enables us to do these things."
Low-cost option
Not all retailers go to the expense of producing TV-quality video, as Sears did with Selena Gomez. Some present low-cost video slide shows of products and grainy user-generated content. Production costs can range from about $50 to several thousand dollars per video, depending on volume and whether it's a simple product demonstration or a 'featurette' with professional actors, scripts and movie sets, says Raj Gajwani, CEO of SilverDock.com LLC, a video production and consulting firm.
Some retailers with ambitious video programs say they get by on a shoestring budget. "For us it is pretty cheapÑone person who handles all planning, production, editing and monitoring," Cobb says.
But, whatever the quality and expense, many retailers report that moving beyond static images and text to some form of online video attracts and engages shoppers.
At Blendtec, a kitchen blender manufacturer that dramatically raised its profile three years ago when it garnered millions of views on YouTube of videos showing CEO Tom Dickson blending things like golf balls and iPhones, video has contributed to a 700% rise in sales since then, marketing manager George Wright says.
The exposure from Internet videos has lifted Blendtec's profile through word-of-mouth marketing, copycat videos loaded on YouTube by Blendtec's followers, and a more universal understanding of what the company sells, Wright says.
"Before the web videos, I would tell people why our direct coupling technology created a better blending experience, and peoples' eyes would gloss over," he says. "But now when they see in an online video how we put marbles in a blender and push the smoothie button, they care about what makes our blenders different. Then we can provide the details of our product technology and their eyes don't gloss over."
E-mail links
Retailers are also using video to boost response rates in e-mail marketing.
"In all of our e-mails, we see a much higher engagement when we include a video link," says Rich Fahle, vice president of content, outreach and entertainment for multichannel books retailer Borders Group Inc., which has particular success with videos of authors browsing stores and discussing their favorite books.
When eBags executives personally delivered their 10 millionth bag order along with a gift certificate to a customer—a woman who answered the door with four excited kids—and caught it on video, the retailer e-mailed the video to 1.2 million people. "That e-mail had an amazing click-through rate," Cobb says.
And for GoPro.com, a five-year-old manufacturer of video and still cameras designed to take action shots while attached to things like surfboards, helmets and race cars, online video has made it possible to grow quickly through viral marketing and branding, says founder and CEO Nicholas Woodman.
A surfing video by GoPro customer John Maher that uses a surfboard-mounted camera, for example, shows him close up and standing on his board under the curl of an ocean wave. That and other customers' videos, which usually show the GoPro logo, have been posted to GoPro.com, YouTube.com and other sites and have produced a surge in recognition for the young company, Woodman says.
"Before online video sharing, a video got shot, went into a drawer, and sat there until someone took it out to share at a family party," he says. "Now customers use our cameras and put their videos on the web, where we have tens of thousands of videos showing our brand. It's clear to us that a large percentage of our web traffic is driven by authentic branding by our customers' videos."
While companies like Sears, Blendtec and GoPro have attracted attention to their brands and traffic to their sites with highly entertaining videos, there's also a role for more sober content. Video should also be used as a customer service tool that explains how products work and reduces calls to a retailer's contact center, says Bobby Tulsiani, a video analyst at research and advisory firm Forrester Research Inc.
That's the strategy followed by Peak Road LLC's Masai Fitness, a manufacturer and distributor of fitness products that provides promotional and instructional videos to its client online retailers. "The consumer gets a fast-paced, visual walkthrough of our products' key features as well as the reassurance that they are going to have the assistance they need to get up and running with the product," says CEO Rob Rekrutiak.
Within two weeks after deploying the instructional videos, Masai Fitness experienced a drop of 10 percentage points in the volume of customer service calls as a percentage of orders, says Gajwani of SilverDock.com, which works with Masai Fitness' product images, assembly manuals and other materials to produce the videos.
Multichannel boost
At Muttropolis.com, a multichannel retailer of pet supplies that sponsors online and in-store information-sharing events for owners of particular pet breeds, online video has bridged the gap between pure entertainment and information, says Chris Liashek, online marketing manager.
Muttropolis.com features online community bulletin boards where customers post their own videos along with information about caring for and enjoying their dogs, cats and other pets. The videos draw the most visitors to the retailer's Online Pet Park community section.
And the most entertaining videos—such as one titled 'Dogs Home Alone' that shows a large black dog repeatedly skidding down a slide on all four legs into the family pool—routinely drive new web traffic through viral marketing, while also keeping loyal customers engaged with Muttropolis.
"Our analytics show increases in online visits when customers find a video entertaining because they forward them on to friends or share them through Facebook or Twitter, but we've also seen an increased buzz from the videos in traffic to our in-store breed meet-up events," Liashek says.
In turn, these events prompt customers to post new videos, photos and other information from the in-store events, and those, too, are shared through social networks. "So we know video is helping to build our community traffic and enhance our brand," she says.
Casting the right format
When it comes to product demonstration videos, EyeBuyDirect, a web-only retailer of prescription eyeglass lenses and frames, is finding that it pays to present and test different formats, says founder and CEO Roy Hessel.
Since launching online videos earlier this year with Treepodia Ltd., a developer and distributor of video content, the retailer has experienced an overall 30% increase in product page conversion rates, Hessel says. And because Treepodia charges fees only on a per-view basis with no additional set-up fees, "I only pay for the opportunity to convert traffic at a higher rate," he adds.
Treepodia develops videos in two basic formats: One, which it calls its automated version, appears like a PowerPoint slide show that displays a series of still product images with overlaid text that describe a product's features. The other is a full-production video, which typically shows models in a moving scene using the featured product.
Although Hessel says he hasn't yet seen a difference in conversion rates between the automated and more costly full-production video formats, the retailer has conducted A/B tests of full-production videos to identify versions that convert at the highest rates.
In two versions of a video showing a model wearing eyeglasses while reading a magazine, for example, only one video showed text subtitles to describe the eyeglasses—'Designer Fashion' and 'Best Seller.' That version produced a 9.2% conversion rate, compared to 2.0% for the video without subtitles, says Tal Rubenczyk, CEO of Treepodia.
Timing counts
With analytics built into video management and distribution systems, such as from Liveclicker and Treepodia, retailers are also fine-tuning their video strategies down to the most effective length of time for each type of video.
EBags, which works with Liveclicker to manage and distribute video content, has found that visitors are most likely to view entire product demonstration videos, but less likely to watch to the end branding videos such as interviews with product suppliers and users, Cobb says.
At Drs. Foster & Smith, Magee has found that video viewers begin to lose interest after about the first two minutes. "So we're making our videos shorter to keep them within a two-minute window," he says.
Even within a two-minute video, he adds, viewers often lose their concentration after 30 seconds, so it's good to make at least subtle changes within a video such as a change in music or voiceover, Magee says.
Keeping viewers' attention is no doubt easier when the subject is a young actress like Selena Gomez. But online retailers are finding that even more mundane video can provide value—to customers and merchants—that goes far beyond entertainment.
paul@verticalwebmedia.com
