Retailers shift their ad spending from TV, radio and print ads to digital ads.
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Lenovo.com began adding a second layer of video to address more technical product attributes in January. Because Lenovo computers can be configured in a "good, better, best" style, there are a lot of differentiated specs for consumers to consider, Broadnax says, and research on Lenovo customers showed they didn't like looking at a long block of text detailing each configuration. Now the company sends product specs to online video vendor SundaySky, which converts the product variations into video form using its SmartVideo technology platform and a template that highlights to consumers exactly what they are going to get with a particular product configuration. There are more than 1,300 of these videos available, but consumers only see the one that's relevant to their configuration. "A nice, quick, clean video gives them the detail they need and moves them down the purchase flow," Broadnax says.
Five percent of consumers who get to the configuration stage and view one of these videos make a purchase, tripling the conversion rate from before the e-retailer implemented the video format, Broadnax says. The yearly cost of the program Lenovo.com has with SundaySky is about equivalent to one Lenovo.com staffer, he adds.
Sporting goods e-retailer Dazadi.com began adding product videos produced by video vendor Treepodia Ltd. to its site in late December as part of a larger redesign. It now has about 10,000 videos, one for just about every product it sells, says Josh Klaristenfeld, cofounder and executive vice president of operations.
Klaristenfeld says Treepodia's automated product video format, which incorporates existing product images, descriptions, reviews and prices into a template and adds music and a voice-over to produce videos en masse, makes sense for Dazadi from a financial and resources point of view. "Ultimately the best option is to have that human touch, however I think for us it is a good interim solution because it's not cost-effective for us to build custom videos for 10,000 products ourselves," he says.
The videos also let Dazadi reinforce its round-the-clock customer service and free shipping, which Klaristenfeld says helps convince consumers to buy from Dazadi over competitors. Pricing for Treepodia's services, which also includes video hosting and tagging for indexing by search engines, starts at $149 per month for up to 1,500 product videos and increases according to the number of videos.
Nyx Cosmetics relies on the good word of its video camera-wielding customers to drive awareness and sales for the manufacturer and e-retailer, and it costs Nyx virtually nothing other than some time. The company began reaching out to a handful of beauty video bloggers about six years ago, making them aware of the brand and what it was doing, and occasionally sending them free samples, says Tonie Shin, vice president of marketing. "We don't want to pay people to create videos for us," she says. "We do this all through seeding and building relationships."
A search for "Nyx" on YouTube now pulls up more than 60,000 consumer-generated videos featuring Nyx products—some with glowing opinions and some not. That's fine by Shin, who says she finds all the feedback useful.
Shin says e-retailers shouldn't underestimate the influence of a video testimonial. One blogger several years ago demonstrated how she used a Nyx eyeshadow pencil as a primer that made the eye makeup she applied over it last. Several other video bloggers picked up on the trick, produced their own videos about the technique, and within six months Nyx had sold 10,000 units of the pencil online. "We know that was a direct result of the YouTube videos from bloggers," Shin says. That pencil remains one of Nyx's top-selling products today, she says.
Nyx ran a contest this spring for these video bloggers, many of whom are aspiring makeup artists, and it had generated more than 23 million video views as of late-June, far surpassing Shin's goal of 3 million. Nyx saw online sales jump for some of the products in those videos, but Shin stresses that the goal of Nyx's consumer-generated video efforts is to engender long-term loyalty. "The videos are helping establish Nyx in the [makeup artist] community even more," Shin says.
No matter which angle e-retailers take on video, e-retailers say video assets help breathe life into products and their own retail brands, communicating answers to consumers' questions and ultimately helping turn shoppers into buyers. "Seeing and hearing about our value proposition gets customers that might otherwise just gloss over [the benefits] of buying from us," Klaristenfeld says.