The Retailer’s Video Playbook: Video Moves Shoppers To Buy

White Paper

Sponsored by

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Just as smartphones replaced traditional cell phones, e-Commerce videos are replacing static web photos and text as the next e-Retailing standard. In fact, 85% of merchants already are employing video to engage online customers, according to research from the e-tailing group. As consumer demand for e-Commerce video grows, the question for most retailers is not whether to incorporate videos, but how to achieve the best results from video throughout their enterprises from this continuously developing strategy.

Consumers research exhaustively before

buying products online and want swift

access to facts and demonstrations that

increase understanding and buying

confidence. E-Commerce videos satisfy

this need while increasing consumer

engagement, time spent per page,

conversion rates, average order values

(AOVs), and retention.

Video program results can be verified

quickly. As videos are viewed, analytics

of shopper behavior reveal devices used,

length of engagement, points at which the

viewer rewinds or re-watches, and when

viewers add to cart and purchase.

The color, motion, sound, and lure of

e-Commerce videos give products life

and definition and have a greater impact

on key retail metrics than static images.

Retailers launching or expanding their

e-Commerce video programs can use the

market data, case study results, and the

10-step implementation process

provided in this white paper to

substantiate, streamline, and optimize

retail video strategies.

“Video drives engagement and education,

which is very important given today’s

information-hungry, hard-to-captivate

online shopper, who is constantly seeking

differentiated, engaging ways to digest

content,” stated Craig Nankervis, VP

and CRM Analyst for First Analysis, a

private growth equity research and

investment firm. “Video is singular in its

ability to deliver a fun and informative

buying experience. This dynamic is

generating increased demand for video

across e-Commerce. We are seeing

this strategy’s positive impact on SEO

rankings and conversion rates, as well as

implementations at various stages

of the sales funnel, and its use in

post-purchase scenarios, such as

video newsletters and new customer

on-boarding.”

“Video drives engagement and

education, which is very important given today’s

information-hungry, hard-to-captivate online shopper.”

-Craig Nankervis, First Analysis

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Video Statistics Summary

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The demand for video is growing: as

many as 66% of consumers now view

e-Commerce videos regularly during the

purchasing process, 90% watch videos at

least once in a while, and 74% will view a

video more than once when researching

information-intensive products, such as

computers, TVs, and power tools, reported

Lauren Freedman, President of the

e-tailing group.

As consumers continue to embrace

e-Commerce videos, Freedman says:

“We will see a greater understanding

of consumer behavior and subsequent

merchant sophistication in terms of where

and how to deploy e-Commerce videos

and what types deliver from an ROI point

of view.”

This white paper will guide both pure-play

e-Commerce and omnichannel retailers

in their efforts to win more sales with

e-Commerce video campaigns that move

shoppers to buy — and assist them after

the sale.

The 10 Steps to Implementing A Successful Video Marketing Strategy

1. Understand What Video Means For Your Business

Consumers have grown accustomed to

viewing online videos (Netflix, YouTube,

Amazon). In June 2013 alone, comScore

reported that 183 million Americans

watched more than 44 billion online

content videos and the number of video

ad views surpassed 20 billion. According

to Cisco, global online video traffic will

represent 55% of all consumer Internet

traffic in 2016, and by 2017, “it would take

an individual over 5 million years to watch

the amount of video that will cross global IP

networks each month.”

Video has hit the mainstream. Consumers

now expect and demand product videos

across the online buying landscape, and

retailers who want to stay relevant must

respond, noted Freedman. “By the end of

this year, there will be significantly more

discussion around not just the benefits of

deploying video, but the opportunity cost

of not doing so.”

74% will view a video more than once when researching information-intensive products

66% of consumers now view e-Commerce videos regularly during the purchasing process

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“By the end of this year, there will

be significantly more discussion around not

just the benefits of deploying video, but the opportunity cost

of not doing so.”

-Lauren Freedman, the e-tailing group

In June 2013,

183 millionAmericans watched more than

44 billion

online videos.

–comScore

90% watch videos at least once in a while

–the e-tailing group

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Retail businesses must start creating and

delivering powerful e-Commerce video

programs that engage and educate

customers at key points in the purchase

cycle. Advanced solution platforms can

display and manage customized content

while providing critical insights into the

business results they achieve. More than

half (51.9%) of marketers said video was

the content strategy with the best ROI,

according to eMarketer.com.

“But don’t just jump in,” advised Craig Wax,

CEO of Invodo. “Carefully consider your

business objectives, audience, message,

response goals, and more. Also determine

whether production, content management,

and other program elements should

be handled in-house, or by experts

experienced in getting the most from

video programs.”

Leading national retailers espouse the benefits of a successful, measurable video marketing strategy:

� The Step2 Company found that shoppers who viewed product videos were 174% more likely to purchase than viewers who did not. “Video lets us connect with [consumers] in an authentic way, whether they’re on our site, on a retailer’s site, or in a retail store,” said Tena Crock, Online Marketing Director for Step2.

� At Samsonite, online video viewers are six times more likely to purchase than nonviewers. “The addition of product videos has helped improve the user experience,” said Alison Katz, Senior E-Commerce Manager at Samsonite, “and increased our sales conversion rate.”

� As L’Occitane site visitors watch product videos, “they’re actually adding more to their carts,” reported Evan Silverberg, Manager of Digital Products for L’Occitane. In addition, they are “spending more time on product pages, and their ATV (average transaction value) tends to be a little higher.” Real-time analytics “allow us to understand the behaviors our online customers are taking when they land on a product page.”

� Communicating the Dickies brand message of no-nonsense quality, utility, and great consumer value — along with workwear features and attributes — “isn’t easy with just photography and two-dimensional images,” stated Robert Dietrich, Digital Marketing Manager for Dickies. “Bringing these [aspects] to life to help consumers understand the value of our products and quality has been really important.”

� For Brown Jordan, portraying the function and form of quality patio furniture is difficult with text and images alone. “We think we have the greatest brand in our industry [but needed] to do a better job of telling our story,” revealed Stephen F. Elton, Chief Brand Officer for the luxury outdoor furniture company. Brown Jordan embraced e-Commerce video to better convey the company and product line to consumers. “That’s really the end goal for us — to tell our story to as many people as possible.”

� At Bizchair.com, 33% of online sales came from the 13% of site visitors who viewed product videos. In addition, video viewers purchased at almost three times the rate of nonviewers, and their AOV was 17.5% higher. After measuring the impact of video, BizChair obtained “the proof of ROI that we need,” stated Sean Belnick, CEO of BizChair.com.

Retailers Corroborate Video Marketing Success

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2. Build The Business Case For C-Level Buy-In

To build buy-in, the company’s video

evangelists must identify key stakeholders

across the C-suite, do their homework, and

be armed with information tailored to each

function. This should include market data as

well as the measurable results reported by

leading (and competitive) retailers already

boosting ROI with e-Commerce video.

These benefits could include increased site

traffic, customer engagement, time spent

per page, SEO rankings, conversion rates,

AOV, and much more — combined with

reduced product return rates.

Buy-in is more likely when C-level

executives understand how video

marketing can enhance the customer

experience across channels and allow a

better understanding of the features and

benefits that drive shoppers to buy.

Lenovo is doing just that: in addition to

improving the customer experience, data

from the brand’s e-Commerce video

platform “provides a window into how

consumers make purchase decisions,”

said Lewis Broadnax, Executive Director

of Web Sales and Marketing for Lenovo.

“This confirms the effectiveness of video as

a sales tool.”

E-Commerce video “clearly has value —

both to our customers who can acquire

the information they seek to guide them to

purchase, and to Clarks for its significant

return on investment,” stated Rick Almeida,

Director of E-Commerce at Clarks America.

How Consumers Shop With Video

In addition to improving the customer experience, data from the brand’s e-Commerce video platform “provides a window into how consumers make purchase decisions,” said Lewis Broadnax, Executive Director of Web Sales and Marketing for Lenovo.

E-Commerce video “clearly has

value — to our customers who can acquire the

information they seek to guide them to purchase.”

-Rick Almeida Clarks America

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3. Identify Video Program Components

The elements of a video program include

choices of partners, technology platforms,

and merchandising capabilities.

First, consider whether your current

e-Commerce platform is equipped and

ready to handle video. Other questions to

ask include:

X What are the destination channels,

devices, and formats?

X How will content be hosted and

streamed across the site?

X How will the video player be

implemented?

X How can we analyze the results of

the videos?

X How flexible is the content

management system (CMS)?

X Will all product videos reside in a

central location that can be managed

remotely?

An effective video program that drives

results is professional, purposeful, and

scalable. The strategy requires “a very

specialized sort of experience,” stated

Robert Dietrich, Digital Marketing Manager

for the Dickies brand. “Video production

requires time, energy, oversight, and

involvement.” That kind of bandwidth “is

the perennial issue with any company,”

said Dietrich, who chose a third-party

e-Commerce video provider to supply

that bandwidth. The selected vendor

provided everything “from soup to nuts,”

including “a clear plan of action in the way

we produced, got everything arranged —

through to postproduction — and finalized

a product we’re all happy with.”

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Video Expands Consumer ConfidenceA recent study from the e-tailing group titled, How Consumers Shop With Video — And How To Sell To Them, surveyed more than 1,000 shoppers about e-Commerce video consumption. Findings revealed that among consumers who engage with online product videos:

� 57% are more confident when watching a video in advance of making a purchase online, and therefore are less likely to return that product;

� 52% are willing to stay on a site longer because product videos are available;

� 45% are more likely to return to a retailer who integrates video into the website experience;

� 44% purchase more products on websites that provide educational videos;

� 41% are more likely to share video (versus photos or written text) found on a product page; and

� 40% purchase products on websites as a result of being influenced by videos.

“Video production

requires time, energy, oversight, and involvement.”

-Robert Dietrich, Dickies

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4. Pinpoint The Metrics To Measure

Based on your business goals and video

program needs, select measurable metrics

that can validate that program objectives

are being achieved. Most retailers focus

on sales and conversions, but many other

factors can be measured — including viewer

attention span, engagement, customer

satisfaction, interaction, and the exact point

during the video a purchase is triggered.

Everything to be measured must be

properly tagged, and then run as a pilot to

be sure the selected metrics are

being quantified.

The e-Commerce video platform under

way at FootSmart will measure “time spent

viewing the video as well as conversion

and the feedback associated with that,”

reported Lauren Schuman, Director of

Online Merchandising and Content for

the footwear company. “We also plan to

do some A/B testing, such as video versus

no video on a product detail page. The

overall results we seek include increased

conversions, reduced product return rates,

a better shopping experience, and greater

productivity for the company.”

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“The overall results we seek include increased conversions,

reduced product return rates, a better shopping experience, and greater

productivity for the company.”

-Lauren Schuman, FootSmart

The e-Commerce video platform under way at FootSmart will measure “time spent viewing the video as well as conversion and the feedback associated with that,” reported Lauren Schuman, Director of Online Merchandising and Content.

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5. Define Video Type And Style Will the video program address a category

or specific product? Will complex products

require demonstrations? Is lifestyle the

primary selling point? These and many

other elements influence the type of

video to pilot. Type then determines style:

video tone, background, setting, audio,

environment, location, talent, and other

content creation features. All must parallel

and complement video program business

goals and brand positioning.

“At Invodo, we invest time up front to really

understand the retailer’s brand positioning

and mission for the program, then produce

a customized Style Guide that steers a

consistent look and feel,” said Wax. “Each

Style Guide includes recommended best

practices, based on the many e-Commerce

videos we’ve created and implemented.”

6. Select The Product(s) To Highlight

Retailers new to e-Commerce video

should begin by choosing key product

categories, then selecting a handful

of products within those categories to

enliven with online video. A combination

of complex, high-value, demonstrable, and

high-margin products is best for initial

video implementation. Select enough

products within each segment to get quick,

statistically valid results during a pilot.

But even though the initial video launch

might be small, be sure the program is

capable of scaling up to maximize the

investment: can videos for other products,

and eventually the entire catalog, be

integrated with the program technology?

In time, can product subsets also be

covered by video and included on product

pages to increase cross-sell and upsell

potential? Videos will be able to address

new marketing opportunities in the future,

so be sure your platform can scale up

to accommodate additional videos and

leverage the full power of e-Commerce

video technologies.

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“We invest time up front to

really understand the retailer’s brand positioning

and mission for the program, then produce a customized

Style Guide that steers a consistent look and feel.”

-Craig Wax, Invodo

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7. Establish A Budget For Video Creation And Marketing

To create a budget for video, start with a

basic business plan including ROI analysis.

Determine the volume of video that can

be driven incrementally within that budget,

with a focus on specific goals. As pilots

move to full implementation, the ROI

realized may allow for additional spend.

Some retailers seek to minimize the cost

of video by producing their own product

videos, which can be a successful route,

especially when staff has time available.

However, experts trained in retail-specific

video strategies, content, platforms, and

production help retailers avoid potential

pitfalls and improve results. According to

comScore, professionally produced video

optimized for e-Commerce outperforms

user-generated content (UGC) video by

30%, delivering a 24.7% lift, as compared

with an 18.7% lift for the UGC video.

In addition, some e-Commerce video

partners can produce and deploy content

within just a few business days.

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Professionally produced video

outperforms user-generated

content (UGC) by

30%-comScore

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8. Format Video For Multiple Screens

Videos delivered to a smartphone or in-store display have different technical specifications than those projected on a desktop monitor or widescreen Internet-connected television. Differences also exist among videos delivered via email, Facebook, and web sites.

Video will attract a broader spectrum of viewers when it is formatted for multiple screens. During setup, address all formats, aspect ratios, and orientations while producing the main product page video, when little additional work is required to satisfy multiscreen needs. With that setup in place, you can run a single production session to create an e-Commerce video for all screens: web site, in-store, social, and mobile.

This multiuse session reduces overall costs, thereby increasing the return on production (ROP). ROP can be achieved by reducing costs and creating efficiencies throughout the video production process.

All videos must be encoded with targeted viewing destinations. Sophisticated video platforms will detect the user device — Android, iOS, tablet, laptop, or desktop — then automatically trigger the corresponding technical controls.

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Return on Production (ROP) of e-Commerce

videos can be achieved by reducing costs and creating efficiencies

throughout the video production process.

Video Augments Mobile OutreachWhen shopping via mobile, where video content is easier and more inviting to consume than tedious text, consumers are three times more likely to click and view product videos than desktop or laptop users, reported Forbes. Accordingly, e-Commerce video consumption can triple as mobile usage and access speeds expand.

The mobile marketplace is expanding at an impressive rate. Smartphone shipments will grow worldwide to 1.16 billion in 2016, noted IDC, while tablet shipments are expected to reach 416 million

in 2017, reported The NPD Group, up from 121 million in 2012. By 2015, as much as 66% of Internet traffic will come from mobile devices, according to PriceWaterhouseCoopers. In fact, by 2017, the number of mobile Internet device and application connections combined will exceed the world’s population, as mobile data traffic increases 13-fold over the next four years, Cisco indicated. Retailers can leverage and parallel this growth with e-Commerce video programs that target this burgeoning mobile user market.

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9. Test And Optimize The Video Program

Confirm that the selected video platform

enables experimental testing for true

evaluation of video impact. Run an A/B test

to measure sales impact or other results

with or without a video, using voice-overs

versus presenters, how-to versus features/

benefits, and other options. In addition

to measuring for increased unit sales, a

platform that allows cross-sell and upsell

within the video also allows you to measure

AOV increases. This shoppable video

feature — which allows customers to browse

and buy related products without ever

leaving the video — is key to improving AOV.

Where improved engagement is the goal,

analyze how long consumers spent viewing

and rewinding videos, what grabbed their

interest, at what point they purchased, and

where they backed out. Experimentation

offers retailers valuable opportunities to

modify and streamline video programs for

improved ROI.

Video testing at Golfsmith revealed SEO

benefits as well as a 64% increase in

conversion rates for products with video,

which drove an additional $564,000 in

annualized sales for the SKUs tested.

Videos, then extended to other online

golfing products, delivered “proven ROI

by driving higher conversion rates while

engaging and informing our customers,”

said Jamey Maki, VP of North American

E-Commerce for Golfsmith. “A 64%

conversion rate increase across product

categories speaks for itself.” In addition, the

solution employed was the only one that

delivered the “custom video content we

needed, as well as the player, API, hosting

and streaming.”

Allowing shoppers to rate and review

online videos, as well as ask product

questions, also helps retailers analyze

and optimize programs for increased ROI.

Encouraging consumers to rate, comment,

and interact with product videos further

increases engagement. This closed-loop,

virtuous cycle of test, experiment, analyze,

and enhance offers continual optimization.

Run an A/B test to measure sales impact or other results with or without a video, using

voice-overs versus presenters, how-to versus

features/benefits, and other options.

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Video testing at Golfsmith revealed SEO benefits as well as a 64% increase in conversion rates for products with video, which drove an additional $564,000 in annualized sales for the SKUs tested.

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10. Make Video A Cross-Channel Endeavor

When e-Commerce videos are leveraged

across channels — including mobile,

social, in-store and email — the strategy

investment boosts ROI, further intensifying

bottom-line results. In fact, cross-channel

video strategies are “becoming the

norm,” said Freedman. “Consumers want

product video available on-demand on

computers, tablets, smartphones, and

Internet-connected televisions. They aren’t

concerned with form factors, devices, or

operating systems — as the ‘HTML5 versus

Flash’ debate demonstrated — they just

want to access product videos whenever

and wherever they choose. Retailers must

satisfy this demand by leveraging new

platforms and tools that allow better and

faster content delivery across channels,

as well as the consistency needed for

omnichannel consumers.”

In-store QR codes featured on displays

and product packaging allow smartphone-

enabled shoppers to access e-Commerce

brand videos instantly. Linking to mobile

video is the most popular use for mobile

action codes: according to mobile action

code survey results reported by

MediaPost, 40% of codes scanned

took users to some kind of video content,

including product demos.

Step2 is among the retailers leveraging

e-Commerce video investment through QR

codes in stores that sell its products. The

company deployed posters with QR codes

throughout Toys “R” Us stores, providing

real-time access via smartphone to videos

showing Step2 products in action.

“Gaining an advantage in this evolving

world of multichannel selling requires

retailers to become more service-oriented,

putting information in consumers’

hands whenever and wherever they’re

motivated to research and buy,” said

Wax. “Compelling product videos made

available across channels help service-

minded retailers to this information, and

in turn, build loyalty and create stronger

product differentiation.”

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“Consumers want product video

available on-demand on computers, tablets,

smartphones and Internet-connected

televisions.”

-Lauren Freedman the e-tailing group

QR Codes Offer Real-Time Access To Product VideosStep2 deployed posters with QR codes throughout Toys “R” Us stores, providing real-time access via smartphone to videos showing Step2 products in action. Item # 736693

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The 11th Step: Start Today At the aggressive rate e-Commerce video

is growing, retailers must stay relevant with

quality video marketing of their product

catalogs. In fact, bringing products to life

on product pages is “just the tip of the

sword,” stated Wax. “E-Commerce video

will be making its way through the entire

customer journey, from browsing to after-

sale support and beyond. Other industries

also are integrating video. For example,

in the service sector, video’s appeal and

ability to engage and educate are reducing

expensive call-center volume.”

At First Analysis, Nankervis confirms the

potential of e-Commerce video: “We are

starting to see video being used in broader

consumer contexts, including follow-up on

upsell and cross-sell strategies. We think

videos will become increasingly intelligent,

such as allowing viewers to interact with

video content by clicking ‘tell me more,’ as

well as transact and communicate in real

time with a brand.” 

E-commerce video is “an exciting and

rapidly changing market,” Freedman

observed. “Ultimately the only sure thing

is this: when we revisit this market in 2014,

we’ll all be amazed by the progress made

over the course of one short year.”

“E-Commerce video will be making

its way through the entire customer journey, from browsing to after-sale support and beyond.

Other industries also are integrating video.”

-Craig Wax, Invodo

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About InvodoInvodo educates and influences consumers by creating and delivering the

world’s most powerful content. Invodo’s video programs combine strategy,

production, and technology to drive shoppers to purchase. Invodo

video content improves conversion rates, reduces returns, and increases

consumer engagement. The Invodo video platform manages production

workflow, delivers video SEO, and collects integrated analytics to drive

ongoing optimization of video strategy. For more information, please visit

www.invodo.com.

About Retail TouchPointsRetail TouchPoints is an online publishing network for retail executives,

with content focused on optimizing the customer experience across

all channels. The Retail TouchPoints network is comprised of a weekly

newsletter, insightful editorial blog, special reports, web seminars,

exclusive benchmark research, and a content-rich web site featuring daily

news updates and multimedia interviews at www.retailtouchpoints.com.

The Retail TouchPoints team also interacts with social media communities

via Facebook, Twitter, and LinkedIn.

411 State Route 17 South Suite 410 Hasbrouck Heights, NJ 07604 P: 201.257.8528 F: 201.426.0181 info@retailtouchpoints.com

211 East Seventh Street Suite 1020 Austin, TX  78701 P: 512.279.4800 info@invodo.com