Should you consider a video commerce platform for your retail business?
I interviewed Forrester Research’s Principal Analyst Martin Gill on his company’s recently published report about case studies and opportunities for retail vendors with their e-commerce websites, social media, YouTube and other video sharing sites. Gill also shared his advice on when is the right time for any retail business to work with a video commerce platform.
The Forrester® Report – “Using Online Video To Drive Clicks and Conversion – A Guide To Approaching Or Revitalizing A Retail eCommerce Video Campaign” – is now available for purchase ($499) directly from the Forrester website. The report includes a case study and interviews with seven vendor and user companies, including: Adjust Your Set, B&Q, Liveclicker, Kiddicare, and Marks and Spencer. There is also a good section devoted to analyst recommendations on the right video commerce strategy for different retailer types and business objectives.
Keeping with Forrester’s Media Citation Policy, I’ve been able to provide for you the Executive Summary of that case study, organized into individual points:
- Shoppers are beginning to use online video to inform their purchases. Although consumer uptake is slow when compared with the wider acceptance of Internet video, online retailers are turning to video in increasingly sophisticated ways.
- The most complex strategies engage shoppers at multiple levels, with retailers deploying content aimed at achieving a range of outcomes, generating content from multiple sources, and adopting a number of platforms to deliver and syndicate content to new audiences.
- Although video can be costly, social sites like YouTube mean that there is a low barrier to entry. Upfront costs can be controlled, and many retailers are seeing significant benefits.
- Those retailers who can demonstrate the most benefit are tailoring their approach to online video in line with their desired outcomes.
The benefits with online video on retail websites
Earlier Martin had given an interview to Beet.TV’s Andy Plesser about his report. Here are some of Martin’s quotes from that interview:
“What we find is once shoppers get to a website, video really encourages shoppers to linger longer, to look at more products, and to stay on sites a much longer time.”
Their case study with one of the retailers, Marks & Spencer, found that viewers who watch video on a retail website stayed on average twice as long as the ones who didn’t watch a video, and ultimately were able to see much higher levels of conversion. The retailers who were strategically placing their videos on actual product pages were seeing some solid benefits, including direct sales, conversions, and reduced returns.
Martin said that their case study showed that achieve success with video in retail websites came down to these important planning factors:
- Thinking about the product that you’re selling and the category that you’re trading in.
- Working at how do you support your product and merchandise with ‘relevant’ video.”
- Having a different content and engagement strategy based on where you’re featuring the video. E.g., video your website versus a social media channel (including YouTube and other video sharing websites.)
- How small you can start with a platform provider and still effectively be able to both drive sales, and showcase measurable results.
You can get more information from Martin by watching his Beet.TV interview, featured above.
My Interview with Forrester’s Principal Analyst, Martin Gill
The following questions are all from my own review of Martin’s report, which Forrester was generous enough to provide me a copy. I recommend purchasing a copy of your own, and Martin’s responses here should provide an incentive for discovering all the valuable research and recommendations you’ll find in that report:
Your report features two video technology platform providers out the U.S. – while all of the retailers appear to be out of Europe. Would it be fair to say that this report is primarily focused on the European market?
I think that’s fair, though I should point out that while data and examples were definitely European, a lot of the technology platforms were global in their reach.
What is your opinion on how the European retail market might differ from the U.S. retail market around online video – whether it be with consumers, retailers, or service providers? I found two examples in your report: 1) Automated video vendor usage, and 2) The incorporation of user-generated video.
When you look at the major technology companies providing the underlying video distribution networks and platforms across the different geographies, there’s something about the use of that technology which changes (between the U.S. and Europe). You’ve picked up on a point that automated video content, while not non-existent, is rare in Europe. Most of the European retailers have gone down a different route of either:
- Creating high-end content based on TV or film production standards.
- Producing in-house type content – whether they’re taking some else’s talent, or taking their own sales team and screen talent.
That happens to resonate more with the way European retailers are trying to brand themselves. The alternate approaches you mentioned, with automated video or UGC video, just haven’t been adopted very much by Europeans.
Is that attributed more to European consumer behavior (on retail sites), or accessible technology providers, or something else?
I think that the technology is available and accessible, including video content generation (either computer-generated or user-generated/submitted). Those technology providers are indeed available in the European market; they just don’t seem to be getting the traction.
The sweet spot in the U.S. seems to be retailers that have got a “long tail” of products that they want to get some degree of automation around. They see the real video effort going on in Europe as more of the higher end, which really doesn’t lend itself well to automation (i.e., being automatically generated); instead it benefits more from a richer treatment.
For example, the fashion and clothing industries are really leading in this space. They’re taking a deliberate approach of very high production values. Or, they’re doing a different approach, like the example with asos.com I used in the report. They’ll actually template out the video shoot as part of the photo shoot, i.e., the outfits that they’re photographing. They’re adding video into their marketing and merchandising mix for a very low incremental cost, since they’re taking those photos anyway. So I think it’s not so much the consumer behavior as it is the retailers that have embraced video; it’s the way in which they’re doing it that doesn’t really lend itself to the automated production.
This next question addresses your report’s recommendation of starting small and looking at hosting opportunities. Is there a challenge to starting small to provide value, while recommending a video commerce platform provider who can better supply deep analytics (the latter of which can get pricey)?
Yes, there is a dichotomy in that. It all comes back to the overall recommendations in the report, which is: Work out whatever outcomes you are trying to achieve. If what you’re trying to achieve is to create a level of brand awareness, and you see the adverts out there on the digital channel, and you have a low-cost $199/year video hosting provider (like a Vimeo Pro), or a free hosting provider like a YouTube, it’s probably sufficient for what you want. If you’re a retailer who is just dipping your toe in the water with online video, and all you want to do is just want to drive some traffic to your site, then you really don’t a deep level of analytics to begin with.
But if you want to drive a kind of hard-core conversion, and you want to up the level of sales you get on every single page view of your e-commerce site, then actually it becomes really critical to do things like A/B testing, and to understand which videos are working, and what the drop-off rate is, and where customers are actually engaging with video, and where they’re ignoring it. If your business case is built on conversion or sales uplift, or hard metrics like that, those are very difficult to find at the kind of, lower end of the platform, or if you’re on the free sites like YouTube. So that is where the video commerce platforms come in, the very sales-intensive conversion-driven efforts of video.
About Forrester Research
Forrester Research, Inc. (Nasdaq: FORR) is an independent research company which since 1984 has been providing reports and advice in for the IT, marketing and technology industries. Forrester works with professionals in 19 key roles at major companies providing proprietary research, customer insight, consulting, events, and peer-to-peer executive programs.