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How Video Commerce Affects Online Retailers

It wasn’t long ago when sitting down to watch TV was actually an easy task. There weren’t satellite dishes and hundreds of channels, let alone TVs that are able to connect to the internet. Now the latest and greatest televisions are referred to as “Smart TVs”, featuring integration to social networks, music / video streaming services, and so much more. In fact, a recent study from Yahoo indicated consumers are shifting away from traditional television and more toward online video. One of the more shocking statistics from the Yahoo study showed the percentage of consumers who watch some form of online video during “primetime” hours for TV (6-9PM) has increased by a staggering 40% over the past two years.

A new element of video technology which is capitalizing on the increased use of online video is called video commerce, or incorporating eCommerce content into online video. Some of the benefits of video commerce include:

  • eCommerce action points in video – One of the main selling points of video commerce is its ability to be interactive with consumers instead of passive. With traditional TV ads there’s often a “call to action” at the end of the ad which the consumer must remember and go out of their way to follow up on in the future. Quite simply, this is a dated advertising model which has been around well before the internet even existed. Video commerce services now offer ads directly within the video content and these ads can even correlate directly to the content shown. For example (and this depends on the video commerce solution), if a consumer likes the shirt they see in a retailer’s video they can click on the shirt in the video and find out more information about the product or even purchase the shirt right on the spot.

Some sites are using video commerce to directly embed products into their videos. Calls to action appear throughout the content which enable consumers to stop the video and view more information about the products shown.

  • Video enhances SEO/SEM efforts – Not only can video help retailers get products across in new and unique ways to different customer segments but it also adds to their SEO/SEM strategy. Ten years ago SEO was mainly text-based websites, but now SEO has several factors including images and social media, with the latter a huge driver for video SEO. Retailers are taking note of these changes (as mentioned in our Search Engine Marketing and eCommerce blog post) and online video ad spending is forecasted to increase by 52% in 2011.
  • Online video within e-mails – Some video commerce solutions now allow the sender to embed video directly into email marketing campaigns. This feature is becoming increasingly widespread as Hotmail just became the first major webmail client to support video in their emails. The Hotmail announcement was big news in video commerce circles and could lead to other popular webmail clients providing a similar offering.
  • Video analytics tell a story Online video has become more than just putting a video on YouTube and calling it a day. Video analytics can determine the exact points in which consumers stop watching a video and when consumers click through product ads. This data can help refine video content and make video commerce efforts more successful.

New video statistics can track the number of views which a specific piece of video content has received by the referral source and other key insights.

  • Mobile video continues to grow – As the smartphone population increases around the world, more consumers are using these devices not only to call and text with friends but also to view video content. While it’s not truly video commerce, mobile video is yet another way for products to stand out from the crowd and appeal to a wider audience. One of the unique evolutions of mobile video is the integration of video content in print ads and at brick-and-mortar stores. With the increased popularity of QR codes in 2011, retailers can utilize mobile video to assist consumers with their in-store purchasing decisions and tie different retail channels together.

While it may seem as if my praise for video commerce is abundant, I am in no way saying video commerce is perfect. One of the biggest hurdles retailers may encounter when attempting to launch a video commerce campaign is the significant variation in video formats. There is currently no “universal” video format and many devices, even specific internet browsers, choose to support only some video formats and not others. Apple products are notorious for not supporting the commonly-used Flash video format and with Google Chrome dropping support for the popular H.264 format the ability to reach the entire consumer population with video content becomes more and more challenging. With all of these video formats, retailers must consider spending additional time encoding and transcoding video files and configuring their sites to auto-detect browser and device settings so the right video format is displayed when a consumer visits their site.

Despite the backend difficulties, there’s no denying video commerce is picking up steam as a way for retailers to reach consumers. While social commerce seems to focus on younger audiences, video commerce is unique in that consumers of all age ranges are accustomed to online video. Even though social commerce is drawing all the headlines, video commerce could become a real solution to not only stand on its own two feet but also integrate with and improve an entire eCommerce offering.