Best practice guidelines for retailers deploying online video in e-commerce. Why use video ? Which products work ? What production method should be used ? Where to place video on your e-commerce property. Improving viewing and conversion. What should you measure ? Accountability and published results.

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Best practices in online video for retailers. Sept 2010
Background:
Online video has reached mainstream acceptance with millions of YouTube clips viewed and swapped daily,
TV catch-up services such as BBC iPlayer changing the dynamics of viewing and increasing broadband ca-
pacity making the experience fast, reliable and convenient. What once seemed a slow and difficult process
not to be attempted without IT support is now commonplace and unexceptional.
Video has the capacity to engage in ways that text, imagery and graphics simply do not. Movement, sound
and a sense of ‘realness’, as if the viewer is enjoying a less filtered experience, explain why video is rapidly
becoming a must-have online. Video is difficult (though not impossible) to fake and there is an authenticity
in the idea of ‘seeing it with my own eyes’. Video tools exist that can and do make web content an even
more compelling experience.
Monthly online video views in the UK grew 37% between Feb 09 and Feb 10, according to comScore, from
4bn views to 5.5bn views, with YouTube accounting for 2.5bn views, 45% of the total.
The challenge of effectively integrating online video into business is significant but growing urgent as it
becomes widely accepted and a video-literate generation enters the market. Business benefits can quickly
be enjoyed but it is possible to waste substantial sums of money producing and deploying online video
ineffectively. As with all new media, thinking and processes are transferred from familiar media until new
paradigms are understood.
Retail seems an obvious fit with video, product benefits should be clearer with moving imagery and audio,
sales messages should be more persuasive and shoppers should be easier to engage. The temptation is
to shoot some good-looking video, add it to existing web properties and hope for the best. However, even
in these early stages of online video deployment, best practices in directly increasing sales are becoming
clearer and retailers can heed the lessons of the early pioneers. This document summarises current best
practice.
NB: As with all best practice guidelines, there will be notable exceptions. No guide can anticipate all prod-
ucts and all circumstances.
What can online video do for retail ?
There are several potential benefits for retailers:
• Increasing sales by converting more site visitors into buyers.
• Generating new customers.
• Reducing returns and customer service calls.
• Information provision and customer problem solving.
• Enhanced positioning and branding tools.
This document focusses on the first benefit, directly increasing sales through e-commerce, as some general
rules apply. This means converting more people already actively considering buying. The other benefits in
the list require greater retailer or product specific analysis so do not lend themselves to generalisation.
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Which products ?
Of course, not all products can benefit equally from online video. In general products benefit which:
• Have good margins. Low margin products are less likely to support video production and hosting
costs.
• Have reasonable shelf life. A product changed very regularly is unlikely to demonstrate good ROI.
• Sell better when demonstrated rather than simply viewed.
• Sell better when motion enhances product features, such as clothing.
• Appeal directly to groups where video literacy is high.
• Are complex enough to require guidance or explanation.
• Can be explained in five minutes, ideally much less. No retailer video should be longer than five
minutes, brevity is key.
Which production method ?
There are four main sources of online video for retailers, these are not mutually exclusive and there is no
reason why a comprehensive video strategy would not include more than one source. Broadly speaking,
there is a direct relationship between flexibility, control and cost. The more elements of the video to be
controlled and the more flexibility required, the higher the costs.
1. Acquired video: Retailers may be able to source video from manufacturers. Advantages are that it
will normally be good quality and almost certainly be provided free but the downsides are:
• It will contain only the manufacturer’s messages and no retailer communication.
• Retailers will have no control over video length or branding.
• They will not be differentiating. Manufacturers willingly supply any retailer.
• There will be no consistency between videos supplied by different manufacturers.
2. Automated video: There are services available which will take stills, marketing messages and graph-
ics from current e-commerce sites and animate them. These services claim to be able to animate entire
catalogues within 24 hours. Some will also make different versions and test them live, establishing which is
most effective and charge on results, not simply video generated and placed.
This is a low-cost means of quickly generating video with tightly controlled content and branding messages.
It is also very easy to update. However, this is a half-way house and only builds some movement, with
optional voice-over or music, into current e-commerce content.
3. Retailer production: The most flexible and controlled video production method, either produced in-
house or using a professional production company.
Using a production company is the most expensive way to produce video but will give the highest quality
results, with professional shooting skills, lighting and sound. Given their expertise, production companies
should also be able to shoot the maximum number of videos in the shortest time, utilising resources in
front of and behind the camera in the most cost-effective way.
Proprietary video produced in this way can be edited and re-used across other platforms to meet different
business goals and derive greater value from the investment.
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Which production method ?
The costs of creating large volumes of video with an outside production company might tempt retailers
to develop an in-house resource using readily available production equipment. If very large numbers of
videos are required or the product requires an uncomplicated sell, this could be a cost-effective production
route. Once added, video will be a long term presence on any e-commerce site, so building up an in-house
capability may be a good long term strategy.
The US Video Commerce Consortium estimates that video production costs can vary from as little as $50 to
as much as $2500 per video and that video produced in batches can average around $150-500 per video.
4. Solicited video: Retailers can solicit video from customers to review products, give hints and tips or
to comment positively on delivery experience or customer service. Many retailers already maintain social
network pages where customers happily contribute in text and pictures. Video is the next logical step and
customers can be incentivised with free product, discounts or free shipping offers.
The advantages of solicited video are likely to be low cost and high authenticity through third party en-
dorsement. The disadvantages will be the lack of content control, variable quality and the unpredictability
of video numbers and product coverage. Retailers could exert more control by using staff members as
spokespeople but this would be at the cost of some authenticity.
Where should video be placed in an e-commerce site ?
The two key considerations in e-commerce video deployment are:
1. Will this video drive consumers closer to the point of transaction ?
2. As a consequence, will it increase the overall number of transactions ?
Thought needs to be given to where the site visitor may be in the buying process and how this state of
mind changes as they move deeper into the site. All video featuring product should include a mechanism
for a buyer to complete a purchase, such as a permalink to the product page.
On home or landing pages, the visitor is interested but perhaps needs motivation to go further. Video
could feature current top sellers in all categories or current promotional offers. Video on home or landing
pages should be quick and punchy as the main objective is to move potential buyers quickly onto deeper
areas of the site. Video should not dominate the home or landing pages as there are a number of reasons
a visitor may be there.
On category pages, video could talk about overall features of the category and compare specific products
to guide a visitor’s choice again perhaps including top selling products in the category. Video can be longer
here as its educational role could play a key part in decision-making, demonstrating authority and cred-
ibility. Since shoppers have chosen the category, video should be placed as prominently as possible to gain
maximum benefit.
On product pages, the shopper is close to buying and simply needs a succinct summary of features and
benefits. Video should be as short as possible and placed prominently but not so as to distract shoppers
from the actual transaction. Ideally, a shopper should be able to complete a transaction without leaving
the video stream.
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Improving viewing and conversion rates:
When considering technical resources required to host and serve video, remember that viewers will tolerate
a certain amount of buffering or loading delay on YouTube or viral video but this is not the case in v-com-
merce. When selling, the expectation is that video will load and play instantly and faultlessly.
There is no ‘correct’ length for retail online video but the ideal appears to be between 30 seconds (the
average TV spot) and five minutes. How long does it take to demonstrate features and benefits or tell a
compelling product story ? It depends on the product and the storyteller but no longer than five minutes.
Do not use Autoplay unless testing clearly produces a better conversion rate, it should be the shopper’s
choice whether and when the video starts.
Video commerce company Liveclicker analysed 13m product page views in late 2009 and found:
• Featuring a video player with a thumbnail of video content and a ‘play’ button overlaid averaged
a view rate of 12%.
• Featuring thumbnails of video content without a ‘play’ button averaged a view rate of 3.2%.
• Featuring a video link or icon underneath a ‘hero’ product image averaged a view rate of 1.3%.
It is extremely important for the video to contain buying triggers such as ‘Buy Now’ or ‘Add to Basket’.
Once the shopper is ready to buy, nothing should impede the process. Interactive video providers such as
Quick.tv can insert links into video which take shoppers directly to transactional pages from the video itself.
If interactive video is not deployed, ensure there is an uncomplicated route from the video to the transac-
tion pages.
Vary one influential element per video to create A and B versions in order to better understand shopper
preferences and improve future video effectiveness. Drop the less effective version as soon as possible,
change another influential element, drop the less effective version. Repeat.
Accountability:
There will be a period of experimentation as shoppers become familiar with v-commerce and the quicker a
retailer’s knowldge base can be built, the greater and more predictable the ROI should become.
When signing up an online video provider, ensure they can:
1. Simply and easily upload, log and serve video in appropriate volumes.
2. Provide a flexible player to accomodate specific site and branding needs.
3. Enable sharing functions for viewers and support a web-wide content distribution strategy.
4. Offer reporting tools which can be linked to sales data. These should include:
• Video views.
• Conversion rates.
• Conversion rate comparisons for buyers who watched video and those who did not.
• Conversion rate comparisons for buyers who dropped out of video and those that watched right
through.
• Dropout rates from video and dropout points. If significant numbers of viewers are dropping out
of video without making a purchase, dropout points are key indicators of problem areas.
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Published results:
Individual company details of v-commerce deployment are commercially sensitive data, so not publicly
available. Companies are prepared to release occasional insights, among them are:
• Marks and Spencer claim a 23% increase in basket size following the introduction of M&S TV.
• Onlinegolf.co.uk averaged an 88% in conversion rates for product pages featuring video.
• ebags.com found an increased conversion rate of 51% for anyone who had begun watching video
and a 138% increase in conversion for shoppers who watched complete videos.
• Jewellery retailer ice.com reported a 40% increase in conversion on products highlighted in video
and a reduced return rate on some products of 24%.
• Automated video producer Treepodia claims a 134% increase in conversions across its retail client
base (including a jeweller, a clothing retailer and an accessories retailer) for video placed on prod
uct pages in Q1 2010.
• The mere presence of video appeared to have a positive effect as Treepodia also found a signifi-
cant uplift in conversion rates for pages with video even if the buyer did not watch the video.
Resources:
• 10 Things to consider when choosing an e-commerce product video solution, www.reeelseo.
com, Sept 2010
• ‘Get Seen: Online Video Secrets to Building Your Business’ Steve Garfield, Wiley Publishing 2010
• V-commerce, the rise of online video, www.adjustyourset.tv, 2010
• ebags Video Program, Peter Cobb, Co-founder, www.slideshare.net.
• Creating e-commerce videos that sell, Video Commerce Consortium 2009.
• Building an effective video commerce strategy, Video Commerce Consortium, 2008.
• www.quick.tv
Data from:
• www.comscore.com
• www.internetretailer.com
• www.bizreport.com
• www.emarketer.com: Video usage in e-commerce, the best is yet to come, 2009
• www.treepodia.com
Cornfield Consulting builds brands in new media by profitably connecting technology and
customers. We identify relevant customer groups, devise compelling value propositions and
create business models that work.
Contact Chris Turner: e: chris@cornfieldconsulting.com
m: +44 (0)7789 486258
Skype: turner7chris.
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