Online Video – A Strategic Conversion Enhancement for Retailers

Scot Wingo

I recently had the opportunity to interview Scot Wingo, who is on the Board of Directors for as well as the Founder and CEO for global e-commerce platform provider, ChannelAdvisor. In the interview, Scot shares his insights on how the retail industry can utilize video commerce to strategically improve product conversion.



Interview with Scot Wingo:

Justin Foster: Today we’re speaking with Scot Wingo from ChannelAdvisor.  Scot, thanks for joining us.

Scot Wingo: Hey, thanks for having me.

Justin Foster: Can you tell our readers a little about yourself, and specifically share with us what your background is in the e-commerce industry?

Scot Wingo: Sure, I’m the CEO and one of the founders of ChannelAdvisor. We are a software company that started in 2001.  Our software is on-demand, or used in a browser. Our customers are retailers.  We have over 3,000 retailers as customers, and what we do is help them manage what we call the e-commerce channel, and there are three different buckets in there. There’s paid search like Google, Bing and Yahoo!  There are comparison shopping engines. We actually support over 130 comparison shopping engines.  And finally, there are marketplaces like eBay and, and also new marketplaces out there, like that we support.

Justin Foster: Our listeners here tend to be from large multichannel retailers and midsize retailers as well.  A lot of them are fairly new to video or have been producing video content for maybe just a couple of years.  Many of them, when they started retail video production, they would produce a product video and then they put that video on the product detail page. Do you see opportunity outside of the product detail page to syndicate video content other places?

Scot Wingo: Yes, if you’re going to invest in these digital assets, and video is obviously a very important one, you might as well syndicate that out there as well.  Marketplaces like Amazon allow for submitted videos.  eBay, which a lot of our customers use, especially on the luxury side, allows you to include a video with an eBay listing.  Comparison shopping engines are a little bit tougher. Only a couple of them will allow you to send a video, but right now it’s kind of limited.

Justin Foster: So it sounds like there is some opportunity in some of these marketplaces, and it sounds like there is also some limited opportunity in comparison shopping as well. Now in regard to the media assets in general, are you seeing clients experience greater sales and higher conversion rates when they push these assets out to these marketplaces?  What have your clients’ experiences been in that area?

Scot Wingo: The way I look at it is from a very high level view.  In the world of e-commerce, only 7% of sales are online, and I view video as a really exciting technology that helps bridge that gap between offline and online, and will hopefully take us from that 7% penetration level up in the 20s. That is the 30,000 foot view of it

The way we encourage retailers to look at it is that we view video as a strategic conversion enhancement. Usually, the best measurement is an a/b test of the conversion rate before and after video.  We definitely see a significant increase anywhere from the 10-20% range when you go from a flat presentation to a video presentation.

Justin Foster: How would that fit within the context of these rich interactive catalogues? Can you help me understand if video is a part of these catalogues or do you think of video as something completely separate from these?

Scot Wingo: In many times, video will live on the item page of the e-commerce site.  Sometimes retailers will have a separate interactive catalogue that could absolutely contain some video.  Retailers also sometimes have a separate video section on their site that shoppers can use if they want to see less product specific videos, and more category videos about a family of products, or a new line coming out.

Justin Foster: Today, does ChannelAdvisor have any clients that are syndicating video content out to any of these marketplaces or that are actively using video?

Scot Wingo: Yes we do.  They tend to be in the luxury segment, so folks like Saks Fifth Ave, Ann Taylor, and a lot of our jewelry customers tend to have video. We do have some TV networks as customers and they do everything they can to syndicate their video.

Justin Foster: Why do you think you’ve seen greater penetration of video syndication in those particular segments? Any thoughts there?

Scot Wingo: I think when you have a commodity product like, Nintendo Wii, or something that’s pretty well understood by the consumer, the video can be useful for some of the advanced things going on, but it’s not as compelling as if you have something like a diamond ring.  With a luxury item, the user wants to not only learn about that product and see it in its two-dimensional format, but they also want to see it on a person, and learn more about it in a way than you can only do through two-dimensional display.

Justin Foster: That makes sense. When you look across your entire client base, is video a topic that really comes up a lot? Or is it something that is just kind of hit or miss right now? Are you seeing any increased momentum among your clients with regards to trying to get into video or has it just been kind of stagnant?

Scot Wingo: I would say it is increasingly coming up into more conversations, especially in those categories that we talked about. In consumer electronics or media, it doesn’t come up much at all.   In contrast, in apparel, home and garden, sporting goods and jewelry; it is definitely on top of mind. I think part of it is that the competitive landscape is such that you have Amazon doing a lot of video, a lot of the flash sites are augmenting what they do with some nice video, and retailers feel like the bar is being raised with video and they need to catch up. You also have vendors out there that are offering a lot more services around video, so that retailers can outsource it if they don’t want to do it in house. There are even some that have templated programmatic ways to add video.  It used to be that if you have a lot of SKUs, you would think video is out of your range, but now maybe you can take your top 5% of SKUs and do a heavily customized video, and then the rest you do in an automated video. There are a lot of retailers experimenting with these different options that didn’t exist 2 or 3 years ago.

Justin Foster: I want to probe a little bit deeper there as well, and this is just with regard to importance of quality.  I think that a lot of retailers for a while now have believed that having high quality media assets, particularly image assets or even flash demos, are important, but there are still scalability issues with video.   You have this idea in which you do a higher quality, more customized kind of video for the top 5%, and then do the more automated video for the rest of the products. Do you believe that the automated method of producing video content runs a risk of harming the user experience of the shopper? Do you feel like those more automated methods of producing video add as much value?  What are your thoughts there in general?

Scot Wingo: There’s definitely a trade-off, where if it is automated, it’s not going to add near as much value as custom produced video. The automated ones I have seen fall under two kinds of experiences.  There are ones that add absolutely no value at all, and after you watch the video, you almost feel like you want those 30 seconds of your life back. On the other hand, others I have seen are somewhat informative and have told me things that I probably wouldn’t have known, so I think right now I’m kind of cut both ways with regards to automated video. I do tend to see more that are maybe a waste of time than that are helpful on the automated side, but I think as those technologies get better that they can perhaps further add value.

Justin Foster: That makes sense.  We call this the implied contract that retailers have with shoppers. We live in a very ADD culture in my opinion, where shoppers are clicking around a lot and are spending very short periods of time on different places around the web.  When you ask someone to watch a video, the contract that you’re making is that in exchange for giving me your time to watch this video, you have to add more value than the time you’re taking away from the shopper. It is interesting to hear you say that you think there’s a trade-off there.

Scot Wingo: Yeah, definitely.

Justin Foster: Before we wrap up, what are some of the largest obstacles that you see retailers facing with video?  What advice might you offer for those retailers?

Scot Wingo: When we talk to retailers, I think their main concerns are the cost. Obviously, if you’re going to do it in house, it’s extremely expensive.   Even with some of the outsource options that retailers try to look at, I think it’s their natural inclination to multiply the per item cost by the number of items they sell, and then that makes it really seem very large and insurmountable.

A lot of them also question the efficacy of video.  Many think that if it only moves the conversion rates 2%, it’s never going to pay for itself.  We often see this scenario where retailers think these problems are insurmountable, and we encourage retailers to just kind of nibble away the problem and do some smart testing.  The nice thing about e-commerce is that we have so much data.  If we know what the top sellers are, and we know what our conversion rates are on those items, you can pick 10 – 20 items and do a $5K-50k pilot test. Most retailers can afford to experiment at that level.  After you measure the conversion rate on those items, you have actually eliminated a lot of the variables, and you can actually make a smart decision.   Let’s say it increases conversion rates 10%, and then you can now do some math and figure out what items video will pay for itself.   In your test, if you pick some strategic products that span across multiple categories, not only do you eliminate one variable, but two. That is why we really encourage retailers to experiment with these things and use some smart a/b testing.  Then when you evaluate the opportunity, you can have a solid sense of what your video ROI would be, versus just kind of being scared of it.

Justin Foster: Absolutely. Good advice. Well Scot, do you have any other thoughts that you’d like to share with our listeners here before we wrap the interview?

Scot Wingo: The only other thing I would mention is that a lot of our retail clients tend to have low single digit conversion rates.  If you can do anything to move the needle on that, then the top line will grow, and the margin will just kind of come out of the equation.  Many of these video technologies can help move that needle, and they are definitely worth the time to evaluate.