Blending video and e-commerce

A 650% increase in traffic. Around 10 million page views. Selling more products in one weekend than the entirety of the best month on record. A significant increase in sales. And calls from The Today Show and The Tonight Show. All because someone thought tossing a 2” x 2” board and some golf balls in a blender was funny.

That someone clearly was right.

“I was walking past our testing room and saw sawdust all over the floor, so I asked what was going on,” remembers George Wright, hired last year as marketing manager for manufacturer and e-retailer Blendtec. “Staff said Tom was in here doing some destructive testing, seeing if he could blend a board with a new blender designed for use in the home. I decided I had to see that. So the next time they did destructive testing I was there, and I had it filmed. It was hilarious.”

Faster than one can turn an iPod into a smoothie, the retailer purchased the domain WillItBlend.com, got its hands on some ‘60s talk show music, grabbed the in-house producer of video demos for commercial products, promoted Blendtec founder and CEO Tom Dickson to online video host (trading in his suit for a white lab coat), and rolled the camera. Staff created an array of minute-long videos of blendings—hockey pucks, Precious Moments figurines, Thanksgiving dinner, mobile phones, cans of soda, marbles, tilapia—and on Nov. 1 posted them on WillItBlend.com as well as YouTube and a few other sites, then sat back to see what happened. What happened was the company sold a lot of blenders.

From Nov. 1 through Dec. 15, the blending videos logged more than 8.4 million views on WillItBlend.com and YouTube

combined. But then add other sites and blogs and MySpace spaces to which the videos found their way (some posted by the company but many more posted by amused Internet users) and ultimately it’s impossible to figure out just how many people have viewed them. And now the company has turned the online viral marketing campaign multi-channel by taking the show on the road for demos at Costco stores.

So for the cost of a web domain (infrastructure and technology already were in place, of course, for the e-commerce site), a few hours of employees’ time and a shopping spree for one helluva bizarre assortment of goods, Blendtec boosted brand awareness, e-commerce site traffic and sales. And the views, the traffic and the sales—and the videos, with inspiration from the site’s “Suggest Something to Blend” form, which has garnered more than 20,000 submissions—just keep on coming.

After all, when someone sees a happy-go-lucky man in a lab coat jam a golf club into a blender with the name Blendtec on it, turning the club into mush, odds are pretty good that come blender purchase time that viewer will remember that goofy mental image and the laughs and think of Blendtec.

“When George approached me about actually filming extreme blending challenges and putting video clips out on the web, I thought it would be fun, but I never imagined that it would take off like it did. In fact, when George said we were going to post videos on YouTube, I didn’t even know what YouTube was,” Dickson admits. “Will it Blend was not designed as a sales campaign—it was designed to be a branding campaign. The first six videos we produced and posted cost us about $50, and now they have been viewed by millions. This campaign put Blendtec on the map in just a few weeks.”

A star is born
There are many brand name manufacturers and other businesses that have posted on numerous social networking and video-sharing sites clever television commercials or video clips specifically designed for online play. These efforts all boil down to brand awareness. But using online video for viral marketing is just a small part—so far—of applying video in Internet retailing. Weaving online video into e-commerce sites to enhance the customer web experience is where the action’s at. The aim is to better inform shoppers about products in a way that text, imagery and audio cannot, and/or to entertain shoppers in a manner that increases brand awareness and turns shoppers into customers.

Online video is the latest technology to further advance the Internet. In October everyone realized—if they hadn’t already—that online video was a smashing success with Internet users. The tip-off? Google Inc. acquired YouTube Inc. for $1.65 billion. Today the free video-sharing site—which uses Flash technology to display and play video clips—and others like it continue to lead online video and its multitudinous fans into a new realm of web experiences.

Video, however, isn’t much fun on a dial-up connection. That’s where another Internet development steps in—the increasing adoption of broadband Internet access. Unlike dial-up, high-speed connections make videos appear in an instant and boast uninterrupted, TV-quality display. As of November, 78% of active Internet users had high-speed access at home, up from 65% in 2005, 54% in 2004 and 12% in 2000, according to Nielsen/NetRatings. So today, putting online video on a retail site is nowhere near the worry it was a couple years ago, when about half of potential customers still were using dial-up access.

In addition to having eager viewers with high-speed Internet access, online video has become an affordable proposition. If a retailer already has a digital camcorder lying around, that’s half the battle. Then it comes down to dreaming up how video can help better display or explain products, or how to regularly entertain shoppers. Find a well-lit room at HQ, get a creative staff member to dress up displays for products or the room for a demo, turn other staffers into directors and stagehands for a day, and voilŕ—original video to upload to an e-commerce site.

Some retailers have begun investing in online video, a few even starting their own online “TV channels.” But when it comes to creating basic, attractive display or demonstration videos, the price is surprisingly small, experts attest. Beyond content creation, ensuring an e-commerce site has technology that can display video—Flash, for example—and the bandwidth to ensure a good site experience for shoppers/viewers is a must. Many retailers, however, already have these in place, the experts add.

Taking the next step, a merchant can inexpensively set up an in-house video studio. “Buy a Mac, which comes with video-editing software built in, a high-definition video camera, Photoshop, and you have yourself a good little studio for around $3,000,” says Eric Heneghan, co-founder of Elevation Inc., an interactive marketing and technology consulting firm. “The investment simply depends on the kinds and quality of videos you want to shoot and how much content you want to create.”

The investment can be really low when content is free. In addition to producing an original fitness show and airing live bodybuilding show webcasts, which cost $7,500 and $15,000, respectively, Bodybuilding.com gets much of its content from customers and product manufacturers, videos that demonstrate crunches, explain the latest supplements or, plain and simple, show off amazing physiques. “Some people are in the mindset of doing TV, thinking they need $1 million to do a show,” says Ryan DeLuca, CEO of Bodybuilding.com, which first posted online videos in 2000. “But online video is just not overly expensive.”

Shmuel Gniwisch, CEO of Ice.com, which is readying an online show, puts it simply: “It has become cheap and ridiculously easy to do.”

Annnnnnnnd...action!
So with the confluence of online video sites extremely popular with eager Internet users, the social networking phenomenon, greater adoption of broadband Internet access, and inexpensive technology, e-retailers have begun embracing video, adding to their sites clips of product demonstrations, customer reviews, fitness lessons, girl talk, practical jokes—the list goes on. And some retailers are launching online TV channels that include not only recorded shows but live broadcasts.

Online video, however, is not for all retailers. While many products or merchants lend themselves to moving pictures, others may not. The same can be said for the potential buyers of certain types of products—some may seek and enjoy online video, others may see no need for it whatsoever. As such, adopting online video requires careful consideration of an e-retailer’s image, products and customers, as well as the online design actions of its competitors, industry observers say.

Netflix Inc. and video, for example, are a natural fit. The DVD rental colossus last year launched Previews, a personalized section on its e-commerce site that enables subscribers to watch movie trailers. The section consolidates all movie trailers in one area, one click away from the site’s home page. Netflix’s proprietary recommendation software chooses the trailers and the order in which they are shown based on individual members’ movie rental and movie rating histories. The previews run sequentially and without interruption. Icons for “previous,” “pause” and “next” enable members to jump to the next trailer or watch one again.

“The Previews section is like every viewer in a movie theater seeing a different series of trailers based on their personal tastes,” says chief product officer Neil Hunt. Netflix members can add movies to their rental queues directly from the Previews page and watch trailers as often as they wish as part of their Netflix subscription. The company has close to 10,000 movie trailers online for its movie buffs.

DVDs and video: a coosome twosome. So, what about, say, jewelry? Aren’t images enough? Maybe add a little image rotating functionality? Perhaps. But there’s plenty more that can be done with online video and jewelry to keep customers on an e-commerce site longer, inform and entertain them, and entice them to come back for more online video—not to mention make purchases, Gniwisch says.

Next month the e-retailer will be launching Ice TV, a regular show featuring company staff and outside designers discussing jewelry trends, style guides, items for sale and more. Themed shows in the can or waiting in the wings include wedding engagements, trends (“What’s Melting the Ice”), and a look at what celebrities are wearing, designed to drive customers to Ice.com’s sister site, SparkleLikeTheStars.com.

“The Internet by its nature creates barriers between shoppers and products. Online video enables us to remove barriers,” Gniwisch says. “Shoppers can see what it looks like on people, what to wear with it—web pages get a life of their own instead of just presenting a more static view.”

The retailer plans to post the shows on social networking venues such as YouTube, Yahoo Video and AOL Video. “They get free content, we get the free publicity,” Gniwisch says. “They are looking for beautiful, engaging content, and we have shows about what is new and hot in jewelry, a topic of interest to many video site visitors.”

To create the videos, Ice.com has hired a freelance cameraman, who runs the retailer about $400 for a couple hours of filming. “It is so simple to edit movies and do lighting,” Gniwisch says. “We have created an area within the office that is acceptable, and we purchased lighting, editing software, a suped-up Apple computer—it is amazing what you can do today with virtually nothing.”

To date, Ice.com has invested less than $50,000 in its online video efforts: creating its in-house “studio,” making the aforementioned purchases, including the studio, the freelance cameraman and staff time. “I just wish we had more time,” Gniwisch says.

Online video is huge
Time is not an obstacle at Bodybuilding.com, where using online video to draw visitors is a strategic priority.

Bodybuilding.com is two entities: one for shopping, and one for providing fitness information, guidance and resources in various formats, from text to images to podcasts to videos. The e-retailer has more than 400 regular content contributors, about 98% of whom, the company estimates, submit materials in a variety of formats for free. It pays a few contributors for videos, but they are among the top trainers and bodybuilders, CEO DeLuca says.

“Our kind of shoppers and visitors love the message board and community concept. Before video they were submitting articles, but now they submit videos because they have the knowledge and the bodies to show things in video that they cannot communicate as well in an article,” he explains. “In return we give them credit for purchases, and that motivates them to keep writing or filming, which gives them a sense of helping others.”

IRCE 2008 Conference Multi-Media CD-ROM

What makes Bodybuilding.com really stand out, though, are its originally produced programs, including Bodybuilding Fit Show, and its live webcasts of bodybuilding shows, many of which cannot be seen without actually being at the event. The e-retailer outsources production of its original program to a local production company, paying about $7,500 per episode. To air webcasts it costs the merchant about $15,000, which includes money for extra bandwidth for live streaming of video. Bodybuilding.com’s Travis Chapman shoots and compiles the Bodybuilding Fit Show and Tyler Williams is the retailer’s video editor.

Placing a video on a site is just like posting a picture, Williams says. “You create a digital file of a video using any kind of basic software, like Adobe Premiere,” Williams explains. “Then you upload the file to your server and embed it into a page, which you can do with a little simple code or by embedding a program like Flash Player into your site. It’s not hard.”

Catalog comes to life
Far from the world of virtually naked musclemen, online video is being used to highlight designer fashion—or rather, how a multi-channel retailer creates a famous catalog of designer fashion and other merchandise.

The Christmas Book catalog from Neiman Marcus is known for its colorful, full-page imagery and elegant design. It also has an avid following of shoppers. Responding to queries and suggestions by customers and the mainstream media, Neiman Marcus last year decided to show shoppers just how The Christmas Book is made, bringing it to life on its e-commerce site via online video.

“The week we launch our Christmas catalog we get a lot of national media coverage. So for the past few years we’ve been putting together video news releases,” says Brendan Hoffman, president and CEO of Neiman Marcus Direct. “Bringing video to the web site was a natural step in the evolution of this concept.”

The online video of “the making of” appears on screen in a prominent position to the left of the catalog cover. It does not start automatically, though, giving shoppers the choice to activate the technology or not. The retailer outsourced the production of the video for what Hoffman describes as a “fairly nominal” cost, adding that online video “is not a major investment and involves very little financial risk.”

The retailer had been considering adding online video for a couple years. But Hoffman at first was skeptical, worrying about the effects the technology could have on shoppers’ web experiences. “I was reluctant to put video on the web site because I wasn’t convinced it wouldn’t slow down the shopping experience,” Hoffman says. “Historically we’ve seen much of our shopping being done during the work week—people at home still were using dial-up and we did not want to burden them. During the last nine months or so, we’ve seen more shopping in the evenings. The penetration of broadband has increased, and that allowed us to put additional content like video on the site.”

Neiman Marcus has always been about the theater of what goes around gifts, the excitement of gifts, Hoffman adds. “The online video is a great step toward helping create an in-store experience online.”

While some retailers are using online video to try to recreate the in-store experience on the web, others are going a whole different route, zeroing in on key customers and entertaining and involving them to keep them coming back for more entertainment, and merchandise.

Fly like an eagle
American Eagle Outfitters launched a new aerie intimate apparel and sleepware line for teens and 20-somethings last year with online videos designed to engage shoppers with their peers. The video section, called “aerie Tuesdays on CW,” adds to an already graphic-rich, interactive site. The aerie line is sponsoring Tuesday night showings of the Gilmore Girls and Veronica Mars on the CW television network. AE.com displays clips of the TV shows and American Eagle’s sponsoring commercials.

The retailer then has a group of the shows’ teen girl fans, decked out in aerie clothing, discussing the latest developments on the shows as well as AE apparel, worn by some characters on the programs. AE.com makes extensive use of Flash technology to provide interactive mouse-over navigation to reveal product details and displays of outfits on characters shown in the clips and commercials—a merchandising tactic aimed at young online buyers who like to coordinate outfits but don’t always take the time to navigate throughout a site to find them.

Young customers want content; they’re going to MySpace and YouTube for entertainment and socializing, says Kathy Savitt, who leads digital strategy and AE.com as chief marketing officer. “But TV advertising alone can be tough, especially with more people using DVRs to remove commercials. But we know that TV is still an important part of our customers’ lives. So we did the aerie on Tuesdays campaign,” she says. “The CW network leveraged our marketing platform where our customer is a core demographic for them; and we created discovery and awareness for them throughout our stores with signage and products. Then we got from them the ability to bring together viewers from the demographic in unscripted chat sessions where they would discuss the show plotlines and such. The girls are wearing our clothes, and the clips run in 30-second spots coming out of parts of the show but before commercials.”

American Eagle still is measuring the impact of its campaign, but to date it finds it to be a major traffic driver to AE.com as well as a driver of conversions, though it will not release specific numbers. “We want to be a destination for both shopping and content to strengthen our brand relationship with our customers,” Savitt adds. “The video inspires them by seeing others’ fashion choices throughout the country, and seeing our products in a context that is compelling to them.”

Like American Eagle, OfficeMax created video content it has used both on television and online. Last summer it worked with Google, the ABC Family cable network, Capitol Records and DDB Worldwide Communications to create branded video content for a back-to-school campaign targeting teens and tweens. The campaign was a TV and online video program called Schooled, a reality show prank. OfficeMax products were present throughout the show. ABC Family aired the show on television and Google Video disseminated online video on the Internet. Google also placed click-and-play video ads purchased by OfficeMax on its site.

“Running $3 million commercials on TV does not get you anything; it’s like screaming in an empty room. The company’s goal was to achieve strong back to school awareness by using an integrated media and marketing approach,” explains Bob Thacker, senior vice president of marketing and advertising at Office Max. “The audience was middle school, high school and college kids who make their own buying decisions. We really wanted to connect with the kids in their world and on their terms.”

For the show, which was done in cooperation with teachers and parents and featured numerous extras in on the gag, eighth graders at a school in New York were secretly filmed during a lead-up to a test they were told was required for admission into high school, and that if they failed they would be placed in eighth-and-a-half grade for more schooling.

Come test time, the aghast children were gathered in a partitioned area of their gymnasium with hidden cameras aplenty and given a test the size of a telephone book. Questions included mindbenders such as, “If you are driving at the speed of light and turned on your lights, what would you see?” Well into the test, the kids began hearing music from the other side of the partition: It was popular musician and teen heartthrob Jesse McCartney, who then performed a live concert just for the kids. The show was aired on ABC Family without commercial breaks, only small insertions for the OfficeMax Schooled campaign.

“We then sliced and diced the show and included outtakes as well as the Jesse McCartney concert and gave it all to Google, which posted all of the online video clips with links to OfficeMax.com pages,” Thacker explains. “Traditional media advertising is simply not in the realm of this campaign’s ‘sweet spot’ customer: the 14-year-old teenage girl. Going online gave us the opportunity to connect with our customers where they live. From Google Video the clips started popping up on YouTube and MySpace and the whole thing took on a life of its own. It was a viral marketing success.”

From late July when the campaign began through Labor Day, OfficeMax experienced 20% growth in online sales, Thacker says. “It drove traffic and sales, and created a new energy and excitement around OfficeMax. The office category is not inherently exciting, and we want to do things that are exciting and offer more unique and contemporary merchandise. We want the kids to understand that this is a place for them, and so far we’re succeeding.”

Online TV channel
American Eagle and OfficeMax are turning to television networks as partners to help them with online video. Another e-retailer, though, has decided to create its own “TV network.” Last month BabyUniverse.com launched a bare-bones version of BabyTV.com, a 24/7 online video channel and social networking community for new mothers that features live broadcasts and user-generated video content. Later this month the channel launches with its full complement of programming and functions.

“Every e-commerce company of today is the new-media company of tomorrow,” asserts John Textor, chairman and CEO of BabyUniverse.com and co-chairman of special effects house Digital Domain Inc.

BabyUniverse is being aided by its largest shareholder and private equity sponsor, Wyndcrest Holdings, which has invested in a variety of companies—including Digital Domain and Multicast Media Networks LLC, the technology company that is enabling BabyTV.com—of great help to any entity seeking to produce and present creative content.

Multicast Media Networks has built more than 40 online video channels, or “web TV networks,” including ones for retailers The Home Depot, Martha Stewart and The Knot. In the case of BabyTV.com, the retailer pays Multicast a sum (Textor will only say that “it costs less than $300,000 to build out a fairly robust online TV network and social networking community”) for the use of Multicast Media technology and gives the media company a percent of revenue from ads sold on the online network. BabyUniverse profits from the rest of the ad revenue and gains valuable brand awareness and shopping and product tie-ins via the online video channel’s ability to vastly expand the retailer’s online presence.

“Most retailers in e-commerce are not building real, ongoing brand loyalty,” Textor contends. “Successful sites maintain customer loyalty. If BabyTV through informative and entertaining content is seen as a must-have resource for new moms, then we have the ability to routinely place our products in the front-of-mind of consumers.”

Years ago Wyndcrest risked significant capital in powerful technologies like online video, but e-retailers and consumers were not yet ready to accept them, Textor says. “Now every Tom, Dick and Harry with a digital camera can easily figure out how to upload content to the web. We’ve been thinking about BabyTV for two years, and we think the time is now, the customer is ready,” Textor adds. “With rich content, user-generated video, live content, blogs and social networking features, we now have an integrated community on the web. Content creates loyalty, and loyalty can be used as the key driver of e-commerce.”

Anyone can do it
The majority of e-retailers do not have the resources to create an online TV network. But as merchants like Netflix, Ice.com, Bodybuilding.com and others are demonstrating, there are many simpler and less expensive ways Internet retailers can use online video on-site and on video-sharing sites and reap diverse rewards.

Creating and deploying online video is no longer much of a challenge, says consultant Heneghan of Elevation. “For many of the things e-retailers can do, all you have to do is just connect a video camera to a computer and off you go. I mean, people are doing this every day at home with movies of their babies and then posting them on YouTube. However, e-retailers do have to ensure a level of professionalism, but they can do so with things they probably already have in house, like good lighting and graphic artists.”

As for the use of online video in e-retailing, one might say it’s a baby movie itself. “As far as its evolution goes, online video still is in its infancy,” says American Eagle Outfitters’ Savitt. “For us, having measured the click-throughs and conversions of our online video effort, so far we have seen good returns. Ultimately, online video is a significant part of Internet users’ online experiences and there is so much opportunity for retailers.”

bill@verticalwebmedia.com