Top Ten Video Commerce Predictions for 2011

It’s that time of year, folks. Time to get the 2011 predictions rolling.  Last year, we resisted the temptation to roll out predictions for 2010, but for nostalgia’s sake you might want to read through our Top 10 List for 2009.

10.  Video SEO will soldier on as a prominent theme in video commerce. In 2011,  more brands will realize the value of video sitemaps and other video SEO techniques to drive traffic.  Retailers from Overstock.com to Bed Bath & Beyond, eBags and many others began to realize the SEO value of video in 2010.  I suspect in 2010 we’ll see more of the video commerce mindshare center on SEO as brands continue to seek creative ways to drive organic visits.

9.  Investment in in-house video production accelerates further. The retailers that were just coming out of the gates with video in 2010 generally focused on beginning with manufacturer sourced content (e.g. Walmart.com, Staples, Advance Auto Parts).  Once the value of that was proven, retailers moved to more in-house production (e.g. Shoes.com, Costco).  Scale of content production remained an issue, with systems like Talkmarket grabbing market share for mid-end video (e.g. Vitamin Shoppe), automated video systems like SundaySky for lower-end video (e.g. Stacks & Stacks), while some of the most experienced retailers in video commerce moved to full-fledged video studio buildouts to accelerate video production (e.g. Onlineshoes.com).

8. Commertainment grows at lifestyle retailers with at least one major retailer adopting a more TV-style format/series for video.  I first mentioned commertainment way back in 2008, but see this area as one poised to continue growing.  Lifestyle retailers like REI, Karmaloop, and Shockhound will continue to use video as a medium to integrate more deeply in the lives of consumers by blending commerce with entertainment.  I still think the online retail industry is missing the one “shining star” example of a wildly successful commertainment initiative, but as Rich Fahle suggested in his last VCC post, this area could be a key strategic investment for many retailers, especially as video consumption continues to move online.

7. Automated video continues to improve, but remains a niche category within video commerce.   At the 2010 video commerce summit, every panelist on the video production techniques panel agreed that personalized automated video would play an important role in the future of video commerce.  Still, the quality of automated video today remains the central challenge that needs to be overcome before this format can go mainstream.  2010 will more likely see automated video used as an appetizer to validate some of the non-content value of video (e.g. SEO) before retailers move to make more substantial production investments.  Continuing improvements in automated video templates and overall quality will prompt more retailers to experiment.

6. YouTube Promoted Videos begin to take hold as a major force in the video commerce industry. Make no mistake about it; Google will try to do with promoted videos and click-to-buy overlays what it did with Adwords.  With tiny minimum bids, easy entry, and a vast YouTube audience, brands and retailers that participate in promoted videos will use the CPC ads in much greater force in 2011 compared to 2010.  This, in turn, will make YouTube a more compelling platform for businesses that seek to monetize broader video reach.

5. The industry continues its struggle to find a compelling format for video. While more brands are now solving the content production challenges that face all new video commerce initiatives, a second, larger challenge remains – achieving smart reach with video to build a loyal customer following.  2011 will see investments in video advertising center on retargeting and more performance-based initiatives (e.g. YouTube Promoted Videos) when it comes to retailers and brands that sell direct.  Still, these reach vehicles remain largely transactional in nature.  Neither are ideal ways to leverage video content as a way to build audience; they merely capture low hanging fruit.  The brands that aim to cultivate the greatest loyalty will need to take a long look in the mirror and question whether video is merely a merchandising tool akin to photographs on a website, or a new medium through which to acquire and generate loyal a customer following.  Given the early state of the video commerce industry, and the lack of retailers and brands that currently view video as a core strategic imperative, 2011 will see strong and growing (but not explosive)  growth as the early pioneers move to the next level of video commerce sophistication.

4.  Video in email [finally] begins to take off when at least one of the major email providers (e.g. Hotmail, Gmail) enable HTML5 video tags or their own Javascript accreditation services. Video email has been the red-headed stepchild of the online video industry for years.  But with Apple’s rejection of Flash and support for HTML5 video on the iPhone and iPad mail clients, marketers that were once skeptical of video in email began taking a second look in 2010.  Still, other major steps are needed to ensure video works correctly in webmail clients.  My bet?  Hotmail’s Active Views program will become the base case that allows marketers to extend the reach of full video in email beyond the 10% – 20% of the email list made possible via HTML5 video, all the way to 40% – 50% of the audience.  Want to learn more about the state of video in email?  Read the 2011 Video Email Marketing Guide.

3.  Automated video optimization becomes increasingly important as online commerce sites seek to drive up performance of video assets. While sometimes to its own detriment, the e-commerce industry remains one that’s obsessed with analytics and performance measurement.  This obsession will bring video optimization technologies to the forefront of video commerce in 2011.  Video presentation testing, player presentation testing, and interactive video presentation testing are all areas poised to rise in significance during the coming year.

2.  Social video emerges as a core driver in video commerce as brands and retailers increasingly look to social audiences for awareness and traffic. Clearly, social is a trend that isn’t going away.  And with video as the most shared media, we’ll see more brands and retailers look to Facebook integration deep within their own sites to encourage shoppers to share videos of products they’re considering buying.  We’ll also see more retailers integrate video into their Facebook fan pages.  While most product videos are typically not ‘viral,’ the growing importance of social in commerce will cause some retailers to begin adding new entertainment elements to their videos as a way to encourage social sharing.

1.  2011 is the year of mobile video commerce. In 2009, mobile video didn’t even make it onto the top 10 list.  In 2011, it’s the number one trend to stay on top of. Already, retailers from Kiddicare, to Shoes.com and Vitamin Shoppe are implementing mobile QR codes tied to product videos as a way to bring products on printed pages or atop store shelves to life.  QR codes (and variants, such as Microsoft Tag) will become increasingly important to the industry.  Why?  Because only 6% – 7% of all retail sales in the USA are transacted online.  Mobile is the bridge between online and the real world, and video allows brands & retailers to deliver a personal experience to shoppers in a way that can be tied to reduced staff costs and greater loyalty.  Yet mobile video won’t stop with QR codes – far from it.  As the growth of tablet computing accelerates and more shoppers use smartphones with 3.5″ or larger screens, e-commerce and mobile commerce will begin to blur, with the mobile audience growing in proportion to the online audience.  Brands will need to serve video to these audiences regardless of the underlying platform used.  And last, mobile video enables simpler sharing of user generated content.  Today’s smartphones enable video uploads to Facebook with a simple finger tap.  The “everyone’s a producer” paradigm I outlined in January of 2009 will finally begin to take hold in 2011.  Mobile is the enabling technology to make it happen.

So there you have it.  2011 is going to be the year of mobile video commerce, with social playing an important role.  Automated video optimization emerges as a key driver of video commerce, and video email will make meaningful strides forward, breathing new life into a critical channel for online retailers and brands that sell direct.  The industry struggles to find a winning video format, restraining growth from explosive levels, but video reach increases as more marketers adopt Promoted Videos.  Automated video continues to improve in quality, but remains confined to a small niche of overall e-commerce video.  We’ll see one, maybe two, meaningful commertainment initiatives emerge, probably from a large lifestyle retailer that’s willing to make a bet.  More retailers will grow their in-house video studios, and SEO remains a key component of an overall video commerce strategy.

Time will tell whether these predictions come true.  Until then,

Happy Selling!

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