June 21, 2011, 3:34 PM

IRCE 2011 Report: $500 is all a retailer needs to kick off its online video

Video can help smaller web retailers compete with bigger players, two experts say.

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Retailers don’t need to spend more than $500 to get started with online video, Lou Bortone, president of Lou Bortone, a web branding and online video services provider, said last week at the Internet Retailer Conference & Exhibition 2011 in a session entitled “Compelling content on a budget.”

Technology and consumers’ affinity for online video have created opportunities for web retailers that want to better connect with consumers. “Online video levels the playing field—it’s easy and inexpensive to get started,” he said.

Bortone said there are four steps to creating online videos for e-commerce:

• Setting a goal, such as driving web traffic, generating sales or building a brand.

• Deciding on the message, which could include educating, informing or engaging the shopper.

• Choosing a format, such as a live webcast, slide show or product demo.

• Selecting a distribution channel, which can include an e-commerce site, YouTube.com or other social networks such as Facebook and Twitter.

“To get started, go with what you’ve got,” Bortone said. “I use an iPhone most of time.” Each company’s goals will dictate the video format and process, but recording devices can be fairly inexpensive and include not only the Apple mobile devices, but also webcams, Cisco Flip video cameras and other branded smartphones. Bortone recommends using an iPhone to record customer testimonials anywhere, such as inside a physical store or on the street, and to create product demos.

YouTube also has tools for the newcomer. “If you have a YouTube account the video set-up is free and YouTube can host it,” he said. “And most basic editing software is free, such as Apple’s iMovie.”

Bortone provided the following list of online video start-up tools and their approximate prices:

• Webcam: $63

• Flip video camera: $132

• Tripod: $20

• Video editing software: $45

• Video player software: $204

• Marketing on YouTube: Free

Total: $464, not counting the hosting fee, which runs $0.14 per gigabyte via Amazon S3.

Online video turned out to be an ideal medium for BeautyChoice.com to reach its shoppers, who typically are young women between the ages of 18 and 25. The beauty care, makeup and skin care products retailer identified women who already were posting beauty care videos on YouTube about applying makeup and styling hair. “We reached out to the top 50 people on YouTube who were making videos and created a network of video bloggers,” said Jordan Blum, president, BeautyChoice.com.

BeautyChoice.com, however, relies heavily on web videos and spends considerably more than Bortone’s budget for newcomers to the medium. BeautyChoice.com funds videos related to products the company carries, and those professional videos can cost $5,000 or more, Blum said. The price has increased ten-fold since the retailer began using online video in 2008, primarily because the video bloggers sometimes employ agents, whose fee-based services can drive up overall production costs. He also noted that federal regulations require BeautyChoice to disclose its relationships with the bloggers if products are provided for review.

But all that is worth it because how-to videos appeal to BeautyChoice’s customers, Blum said. The company’s videos logged a combined 340 million views in less than two years and one of its recent videos generated 28 million views. “92% of our traffic is organic and most comes from YouTube,” he said.

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