A discussion draft of the Online Sales Tax Simplification Act of 2016 is expected to be introduced in Congress soon.
No longer a supporting actor, video stars on some retailers' e-commerce sites.
Coming across video on an e-commerce site these days is fairly routine. Of the 100 mid- and larger-sized e-retailers tracked by retail consultancy The E-Tailing Group Inc., 85% used video in 2012 to merchandise in some way, most commonly on product pages. But a sprinkling of e-retailers are going much further, making video their primary sales tool.
Take specialty discount e-retailer PulseTV.com, for example. The e-retailer—whose name refers to its roots as a seller of video anthologies through direct-response TV advertising, not its focus today on merchandising with online video content—began creating original video content in mid-2011 after it saw consumers clicking to view manufacturer videos PulseTV talked up in its daily-deal promotional e-mails.
When its early tests showed that video viewers converted into buyers at a higher rate than non-viewers, the e-retailer decided to transform the look of its site and put video front and center. Visit PulseTV.com today and where consumers might see a hero shot photograph on most e-commerce home pages, they instead see a freeze frame from a video superimposed with a Play button. Pressing Play launches a clip featuring PulseTV staffers pointing out a product's merits or uses, and, sometimes, its failings. "We like to tell a story, and get down and dirty about what it is about," says PulseTV co-founder Anisa Ali. "We're not afraid to point out problems with a product."
Ali says that a mix of personality and honesty is helping set PulseTV apart from the competition, communicating to consumers that PulseTV is made up of real people with a real customer-service focus. "We are a smaller company trying to compete with Amazon," Ali says. "We do it by our service, but it is still not always easy. The videos make us real people to our customers, people they are comfortable associating with."
For PulseTV, that comfort level is helping drive sales. Ali says customers today who press Play on a product convert at a rate four times greater than those who do not. Sales overall in 2012—the first full year the e-retailer had video as its merchandising focus—were up 70% in dollars. "Video was not the only improvement we made, but it has been a huge part of it," Ali says. And PulseTV projects sales will increase more than 50% in 2013. Approximately 70% of products added to PulseTV.com now have an original video featuring a PulseTV employee talking it up.
PulseTV is part of a vanguard of online merchants that eschew routine merchandising tactics in favor of inviting consumers in with video. These merchants say video makes the products they sell, and the retailers themselves, come to life online, creating a welcoming, differentiated environment that encourages consumers to buy. And some merchants are finding these storytelling videos gain them wider exposure that draws more traffic. They also say the details they can show in videos prompts fewer returns and service inquiries because consumers have a better understanding of what to expect, which serves to drive down overall operational costs.
Out of the ordinary
Another e-commerce company with a focus on video is DailyGrommet.com, whose 10-person production staff records five to 10 videos every Wednesday morning in its offices outside Boston. Daily Grommet, an online marketplace that specializes in marketing stylish products from small manufacturers, features one new video each day on its home page.
On a day in December, for example, the home page video—which is hosted on and streamed from Google Inc.'s YouTube—featured several kitchen tools from manufacturer Prepara, including a flexible silicone roasting laurel designed to elevate a chicken or other food item off the bottom of a roasting pan. Clicking Play on the home page took shoppers to the product detail page, where the video appeared at the top, followed by text that details its creation story and a product detail tab that lists product specifications. The page also incorporated social network modules and has the manufacturer answering questions from Daily Grommet shoppers.
Two Daily Grommet staffers narrate and appear in the two-minute video. One talks about how she tried the laurel during a cooking class and how it worked out, noting, for example, how she tossed it in the dishwasher afterward and it came out squeaky clean. The video also features one of the product's inventors talking about his design approach and the product's usefulness. The video further incorporates some manufacturer-supplied media assets, commonly called B-roll, like product photos and videos of its creators.
Telling a good story
The approach is designed to tell a layered, deep story, rather than simply show the product like a lot of product videos on other e-commerce sites do, says Joanne Domeniconi, co-founder and chief discovery officer of Daily Grommet. She says that helps forge a connection between product creators and consumers. "Building rich media around commerce, and personalizing and humanizing this experience is the future," she says. "Video can bring products to life. It helps to replicate the interaction between the shop owner and the consumer online."
As a marketplace, Daily Grommet takes a cut of each sale sold through the site; Domeniconi declined to say how much. Sellers are asked to share in Daily Grommet video production costs, although Domeniconi declined to say to what extent or what an average video costs to produce. After a video is produced sellers can use the video on their own web sites.
A promotional tool
E-retailer and marketing platform Sharpmen.com takes a similar storytelling approach with video. The site, which sells apparel, accessories and gadgets aimed at men, works with a collection of brands and manufacturers to showcase their products in exchange for about a 40% cut in any sale, says CEO Yazid Aksas. That cut includes video production costs.