Retailers shift their ad spending from TV, radio and print ads to digital ads.
Retailers find many valuable uses for video: to inspire and sell, but also explain and educate.
Consumers are watching a lot more videos online than they used to. 52% of the U.S. population spent time watching online video in December, and the average viewer spent more than five hours and watched 138 videos. Total video views topped 22.62 billion, up 122% from 10.21 billion 18 months earlier, according to The Nielsen Co.
E-retailers are riding the video wave, too. 83% of 100 top e-retailers evaluated by The E-tailing Group Inc. in 2011 included video on their sites, up from 64% two years earlier. E-retailers employ video in different ways. Some feature a handful of slickly produced videos about the retailer or the brands they sell, others produce a video for each product, while still others broadcast videos produced by customers and fans. Some do a little of each.
E-retailers offering video say the financial returns vary, but view video as an asset they have to have because consumers are looking for it. As they gradually gain experience with video, some e-retailers can point to evidence that video does help—either by boosting sales, generating buzz about a brand or answering questions that otherwise would take the time of customer service agents.
Videos can be simple and inexpensive to produce, or glossy and costly. Manufacturer and e-retailer Benefit Cosmetics offers some of each.
Benefit will produce about 25 to 30 videos this year, says Valerie Hoecke, vice president of digital experience and commerce. Eight or nine will be high-end, stylized videos similar to TV commercials—those will cost the most to make because they involve actors, scripts, sets and directors, Hoecke says.
Eleven will be "tips and tricks" videos that feature Benefit staffers showing consumers how to apply products. Those are filmed at Benefit's San Francisco headquarters by a freelancer; Benefit staffers handle the final edit to keep costs down. Because of the logistics involved, Benefit has one full-time staffer dedicated to managing the production and distribution of these two types of videos.
The remaining videos are produced entirely in-house by an animator on staff, Hoecke says. Those videos cost the least to produce, feature one product and include music, product images and graphics. Once produced, Benefit adds subtitles to all its videos so they can be viewed in nine global markets. The e-retailer includes video in its e-mail marketing and also shares the video assets with its online resellers, such as Sephora.com.
Hoecke says each video type generates a different return. The high-end videos tend to pay off bigger, faster. For example, when Benefit promoted a quirky video about its Bathina body balm, that product moved from a BenefitCosmetics.com sales rank position of 25 to eight for the week. Benefit promoted the video on its site and on social media. "That's a big deal for us, because most of our sales come from our top 10-selling products," Hoecke says.
The "tips and tricks" videos, on the other hand, are designed to show existing consumers how to use products to their best advantage and aren't intended to pay off right away. The tips videos routinely get the most clicks and views. "Some videos are for driving results in the near-term, but we do some with an eye on the long term," she says. "We're placing a bet on video because it can tell a deeper story to our customers."
Straight to video
Sharpmen.com, a men's fashion flash-sale site that just launched in May, is placing a big bet on video, which gets 75% of the startup's marketing budget. Consumers who visit the e-retailer's home page have to press Play to learn more about what the company does and sells. Once they enter the self-described "online shopping channel for men," rather than see photos of the products available that week, product collections are featured as video clips. Pressing Play launches a video that fills the top portion of the screen; consumers have to scroll down to find individual product images.
The videos, about three minutes each, first tell the story of the brand being sold and why Sharpmen.com decided to sell it, then goes into the reasons why someone would want to buy the brand's products.
The videos are hosted on YouTube, a subsidiary of Google Inc. It's free to post videos on YouTube and to embed a link to them on the Sharpmen site. And CEO Yazid Aksas also knows Google's natural search algorithm gives credit to unique video content. "Videos are being pushed up by Google in search results, so it is very important for us to be well positioned there," Aksas says. Other e-retailers also say video content helps them get better placement on search engine results pages.
Aksas hires aspiring actors and young videographers to film each clip, and the videographers use Sharpmen's own DSLR camera to shoot them. Each video, he says, costs less than $1,000 to make. The site's lead video got nearly 6,000 views in its first month.
Video as sales agent
At computer manufacturer and e-retailer Lenovo, video is used to court customers at different points in the buying process, says Lewis Broadnax, executive director of sales and marketing. Historically, Lenovo has sold to corporations and other large organizations. But in the last few years it has begun selling directly to consumers via Lenovo.com, and the e-retailer's videos focus on communicating with these less technically minded buyers.
For consumers just starting their research, Lenovo.com last fall added videos that introduce consumers to each of its product lines. These line-specific videos stick to the basics and feature a man describing and showing the attributes of each product line, such as pointing out how many USB ports a laptop has and where the power cord connects.
Broadnax says these videos answer questions that otherwise are being asked of customer service representatives. "They're for getting customers acclimated with the system, because they can't go to a store to see our products in person." Currently, there are more than 30 such videos available on Lenovo.com, all produced and hosted by online video vendor Invodo. Lenovo.com visitors who view a video are 244% more likely to buy than non-viewers, according to Invodo.