Practical Ecommerce

Video Boosts Sales for Online Retailers

At brick-and-mortar retailers, shoppers can stroll the isles, handle items, speak to clerks, and receive well placed merchandising messages. It’s not that easy for ecommerce merchants. They must find new and inventive ways to engage and convert customers; using well written and persuasive content, great photographs, related product links, and cross-selling tools. In this ever-advancing cycle of innovation, merchandising with video might be the next bottom-line booster.BorderMedia features author and artist videos online

“There is a clear trend that a lot more [online] retailers are incorporating video into their user experience…and we know that video works,” said Kevin Ertell, senior vice president of ecommerce at Borders Inc., Ann Arbor, Mich.

With the support of its 1,100 retail stores around the world and $3.8 billion in revenue for fiscal 2008, Borders was one of the first online retailers to use video as a way to both attract and keep customers. Their videos engage, educate, and entertain. But perhaps more importantly, they build total brand awareness and showcase particular products.

“The BordersMedia section of our site is designed to really engage people,” Ertell said. “We have the same passion for books, music, and movies as our customers and we really want to get to know the authors and artists. That’s why we have Live at 01.”

Borders Live at 01 videos are a sort of variety show that is part entertainment and part merchandising. Site visitors can watch author interviews or listen to musicians playing songs from their latest album.

“The hope is that as people become engaged with an author or artist on our site, they will want to read the book or listen to the music, and we hope they buy it in our stores and on Borders.com,” Ertell said.

Merchandising Videos for Small or Mid-sized Stores

While Borders.com is perhaps one of the best examples of well-executed video merchandising in the ecommerce space (with one exception which will be mentioned below), it doesn’t take a billion dollar corporation to successfully use video.

Blendtec, a division of K-TEC, Salt Lake City, Utah, uses simple, easy to implement video to demonstrate its relatively high-end blenders which sell for between $399 and $799 online. The videos discuss the blenders’ features; frequently include recipes for milk shakes, smoothies, bread, or salsa; and essentially sell a blender that might be ten times the price of a Cuisinart at the local discount box store. After watching the videos, those Blendtecs seem worth the price.

“People buy and sell in different ways then they have before,” said George Wright, director of marketing and sales for Blendtec. “They are making more online purchases all the time. Do things the old way and you will have a smaller and smaller audience online. …[the customer] is not in a store kicking the tires, you have to build an experience [for them], and video is a great way to do that. You can show them how the product is supposed to work.”

In addition to its many demonstration videos, Blendtec also produces a series of TV-show like episodes called, Will it Blend. Will it Blend pits shoes, action figures, garden equipment, and even electronics against the Blendtec blender’s powerful motor and steely blades. The series has a massive cult following, with more than 2.3 million viewers on Blendtec’s YouTube channel.

“You have to use video if you are going to keep up and aggressively build a company,” Wright said.

Nike: Will it Blend

Shoppers Are Ready for Video

In February 2007, a JupiterResearch survey of 2,319 online consumers found that 46 percent of those surveyed watched online videos at least once a month, while 43 percent of broadband users viewed online videos at least weekly.

“Online video is seen as a mechanism for encouraging site visitors’ engagement (e.g., increasing the duration of site visits) [and] enriching site visitors’ overall experience,” JupiterResearch said.

According to the survey, 18 percent of those online consumers with broadband service and 15 low-bandwidth users wanted to engage with product demonstration videos like the ones on Blendtec’s site.

Videos Might Not Be Right for All Products or Brands

Blendtec is selling a high-end product that promises superior performance, and its videos actively demonstrate that performance for online shoppers. But a video promoting a commodity product would not have the same effect.

“Video might be overkill for some pitches and products, and become more of a distraction than an incentive to convert,” said Stefan Tornquist, research director for MarketingSherpa. “For something complex, visceral, or new, video can be a great fit. Selling fly fishing in the Arctic? Video is going to do a better job of putting the prospect in a buying frame of mind than all the copy you can muster. Introducing a new service or product? You can explain why it’s different in 15 or 30 seconds of video that would equate to pages of text. But, for a product that is a known quantity, easy to explain or understand, video may not be warranted. In fact, it may complicate the issue.”

There may even be some challenges with using video to build brand awareness on ecommerce websites. “I’d think it’s entirely dependent on the brand building measured against the distraction to consumers that are already there to buy,” said Tornquist. “Unless you’re premiering something they didn’t know about or giving them something unique to online buyers, I’d ask why to have something interfering with their shopping – that is, of course, if it does interfere. The Borders’ homepage gives people the subtle option to play a video, it doesn’t force it on them. Even the Borders solution gives me pause, however, because it takes people to another page. Seems a bit clunky from a usability standpoint.”

Potential Performance Pitfalls

There is also a danger in offering visitors a poor video experience. The very same JupiterResearch study that found that almost one-in-five broadband users wanted to see video demonstrations, also found that 60 percent “of regular online video users (i.e., those who watch online video at least once per week) are relatively less likely to return to a site for video content if the viewing experience is poor. Also, 43 percent of regular online video users said they would seek their video content from a competing Web site [sic], and 27 percent said they would be relatively less likely to visit the Web site [sic] again for any reason.”

So poor demonstration videos might send more than a quarter of potential customers away, never to return. And a “poor” video might have nothing to do with the content. According to JupiterResearch, “online video that is interrupted for buffering purposes and playback that is slow to begin are the greatest sources of frustration with online video. Buffering issues are the number-one problem online video users encounter. …44 percent of online consumers who viewed online video… and were frustrated with the viewing experience attributed their frustration to playback interruptions due to buffering. Also, 35 percent of online video users who were frustrated with their viewing experience felt the video took too long to begin playing.”

Retailers need to make sure that their hosting solution can manage the sort of bandwidth video can require.

Video placement is also important. In the case of Borders, for example, the videos are high quality, interesting, quick loading, and professionally produced, but they are not linked from product pages. If customers were thinking about getting Representative Nancy Pelosi’s new book, Know Your Power: A message to America’s Daughters, they would find an 8-part discussion with Pelosi in the BordersMedia section that might inspire them to buy, but if they simply searched for the book in Borders’ site search and visited the product page, they would be hard pressed to find any reference—let alone a link—to Borders’ video merchandising.

Likewise, Blendtec does include its excellent videos on all product pages, but only behind a vaguely labeled “Resources” tab.

When to Use Video Merchandising

Demonstration videos, branding videos, videos that both entertain and merchandise should be part of an online retailer’s “tool box” of marketing and customer engagement tactics, but only when it makes sense for the product and only when it can be delivered well, without buffering issues or download problems.

Good demonstration videos should also be easy to find and logically connected to the products they feature.

There are many indications that video will boost ecommerce sales, but like all marketing and all merchandising, video must be done thoughtfully and well.

Video Resources

Armando Roggio

Armando Roggio

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Comments ( 8 )

  1. Matty_Gr October 2, 2008 Reply

    That’s all fine, except I don’t see any real data on how video impacts conversion rates. There’s too much hyperbole out there – It’s time for a real study of online video and how it impacts conversion…

    Mat Greenfield
    Conversion Results

  2. Armando Roggio October 2, 2008 Reply

    @Matty_G, Your point is right on the money. I looked for that sort of data when I was working on this article, but could not find it. Do you think that merchants would be willing to share conversion rates?

  3. rgajwani October 2, 2008 Reply

    At SilverDock.com, we’re seeing conversion increase by 20% to 40% for online retailers using video merchandising.

    Results vary, of course. As Armando Roggio suggests, HOW you implement video can be as important as WHAT you show. We’ve seen dramatic improvements in conversion rates when we adjust the location, embed method, and bandwidth optimization of our video players.

    Raj Gajwani
    http://SilverDock.com/

  4. Armando Roggio October 2, 2008 Reply

    @Raj. That is awesome. Thanks.

  5. Karla Patterson October 6, 2008 Reply

    I like the way this article points out that people shop differently now. It’s important to remember why someone will take the time to watch your video about your product or service. If it’s just an old-style commercial they may not want to spend that time. People want to be entertained or educated or both.

    Have you ever noticed that many TV shows use a well-placed and visible type of computer (or other product). Think of video on the web as a story that uses product placement where the products and services are yours.

    Karla Patters http://www.video7pro.com

  6. Justin Foster November 2, 2008 Reply

    I am in the middle of writing a whitepaper called, "Building an Effective Video Commerce Strategy" for the Video Commerce Consortium (www.video-commerce.org). I don’t want to spill the beans, but here are some good stats that will be in it for everyone looking for validation video can impact conversion. Culled from a variety of sources:

    "So far, the videos have been a success. Testing them on laptop product pages lifted conversions and increased accessory sales 12% in some cases. And customer feedback has been great," said Rich Lesperance, Director of Web Sales and Operations at Circuit City.

    "We ran an A/B test across 50,000 product detail page views at eBags and measured the conversion rate in Omniture in order to track the impact of video at the product page level. What we discovered was that the conversion rate increased 50.1% for those users that clicked the "play" button in the video compared to the control group, and 138.9% for those users that watched the entire video compared to the control group."

    "Customers that watch videos convert at twice the rate of customers who do not," said David Witzig, Manager of E-Commerce and Video at ShopNBC.com.

    Ice.com, a web-only jewelry retailer, has experienced a 40% rise in conversion rates on products highlighted in online videos, says co-founder and president Mayer Gniwisch. And by showing its products on models in videos, which puts the size and appearance of jewelry in a better context for viewers, Ice.com has reduced the return rate on some products by 24%, Gniwisch says.

    Online videos produce “a substantial lift,” in sales says William Lynch, executive vice president in charge of marketing and content at HSN.com.

    Shoot me an email at justin [a t] video [d a s h] commerce [d o t] org if you would like a complete copy of the whitepaper once it’s done.

    Justin Foster
    founder, video commerce consortium

  7. Matty_Gr November 4, 2008 Reply

    That looks like some great research Justin. I hope that heralds the beginning of the end for speculation in this area!

  8. Justin Foster November 22, 2008 Reply

    The truth is video works when it is applied strategically. No one should take the quotes above or any other video commerce case study as an indication that using video offers any kind of a guarantee of performance. It’s possible to fail wildly with video just like it’s possible to fail wildly with a site redesign, poorly executed email campaign, ill-conceived ad buy, etc. Those who are succeeding with video are following some basic best practices and making sure that video is enhancing the customer experience rather than detracting from it. For video on a retail site, specifically on product pages, I’d recommend:

    1) Using video as a secondary element on the page so it does not distract a shopper that’s already considering purchasing the product

    2) Turn auto-play off

    3) Determine the length of the video based on the product or service being sold. Simple products with lower price points often don’t require a lot of consideration during the purchase process; therefore shorter, simpler videos focused on features and benefits often perform well. More complex, expensive products may require longer videos that provide the shopper with additional education and a detailed features overview.

    4) Ensure videos load quickly and avoid buffering problems during playback. Not only can this negatively impact the customer experience, but some customers may get so frustrated they abandon the purchase.

    5) Use video as a direct response medium; adding ‘buy,’ ‘add to cart’ or other buttons in the video player or within the video itself can boost the effectiveness of on-site video.

    6) Professionalism matters. Professional-quality videos with professional actors, sets, and production equipment can provide for a better customer experience. However, if you’re not using online video today, my advice is not to let the cost of production scare you away from experimentation. The paradigm shift driving video in e-commerce is the same one that propelled YouTube to mass adoption: "everyone’s a producer." That includes retailers. It is possible to get started with video for very low cost. By using existing cameras or buying high quality consumer cameras, existing staff, and with minimal investment in set design, scriptwriting, and post-production (e.g. editing software) it is possible to create several videos and test for yourself whether or not it’ll work.

    Last, and perhaps most important – don’t go into video wearing a blindfold. Read as much as you can (sites like practicalecommerce.com are excellent resources). By investing a little time up front reading case studies and best practices, you will greatly increase your chances of succeeding with video and saving yourself a bunch of wasted time and cost down the road.