Like many believers in the power of video to sell, I pay close attention to video’s ability to enhance marketing & merch efforts, whether they be SEO, conversion, mobile, or social. These areas are critical for any video commerce program given the constraints of today’s e-commerce industry.
The problem for retail executives – and the video commerce industry as a whole – is that focusing on the areas where video increments performance of existing channels relegates video to the status of being the latest ‘merit badge’ for e-commerce sites to earn. Such focus erodes or ignores the true potential of video.
Don’t get me wrong; video’s ability to increment performance onsite and within existing channels is admirable – and necessary. But video has the potential to be an entirely new channel unto itself, not just the latest ‘bolt on’ or ‘bumper sticker’ for e-commerce sites.
So why do so many retail execs view video as just the latest bell or whistle to add to their sites rather than a revolutionary channel that has the ability to transform the business? The answer, I think, comes down to the mindset that has defined the e-commerce industry for the better part of the last decade. Changing this mindset is a necessary and central challenge facing both the video commerce industry and visionary retail executives who believe in the power of video.
Changing an Industry from Within
The e-commerce space, for better or for worse, is a numbers-driven direct marketing business. In many respects, this trait served the industry well, especially as it entered maturity. But on the whole of it, I think the industry’s hyper-focus on testing, analysis, and incremental-ism now blinds it to some of the largest and best opportunities for growth. Any retailer can run small tests or knock out a half dozen – or even several hundred – product videos. But sometimes it’s just not possible to test things on a small scale and determine their true value to the business. Sometimes, a risk-taker has to go “all in.”
Rewind fifteen years into the past and imagine a typical multi-channel retailer contemplating the first-time launch of a new e-commerce site. It might seem hard to fathom today, but there was a huge amount of resistance among many traditional retailers to launching e-commerce back then. It was too much of a risk. It was unproven. It required too much of an investment. It would pressure margins. Perfectly logical reasons to avoid e-commerce were not in short supply. Yet one company, Amazon.com, decided to take a more visionary route (and yes, there were many other visionaries). Today, any retailer worth its salt – even Amazon’s fiercest competitors – would be hard-pressed to deny the dominant business Amazon was able to build. As the years passed, most retailers finally got with the program and decided to pour money into e-commerce. For many of these companies, e-commerce is now the fastest growing part of the business. The strategy, in the end, turned out to be a no-brainer.
Revolutionary opportunities and ideas almost always appear to come out of left field at the beginning. They appear too outlandish or risky for the vast majority of market participants to undertake. It’s only years later, after everyone has already “seen the light,” that the new paradigms are obvious to all. Once that happens, much of the opportunity that once seemed so risky has already vanished. The once-new paradigm itself becomes the subject of hyper-analysis and incremental improvement. Analysis trumps creativity in the end for any paradigm, signaling maturity, until something new comes along to disrupt it once more.
In my view, there is no bigger missed opportunity in e-commerce than with video. When I find myself doubting, I go back to a stat HSN’s Emery Skolfield shared at the 2010 Video Commerce Summit re: the lifetime value of multi-channel shoppers watching video on TV+web being double that of either web or TV alone.
Want to double LTV with video?
Most retailers had never done video of any kind prior to maybe 2 or 3 years ago (max) and are only slowly starting to roll out, usually with some product videos to place on product detail pages, perhaps some how-to’s in a video gallery, and maybe some more entertaining/awareness/branding vids for YouTube, or even traditional TV spots. That’s great. I applaud these retailers. They are our clients. We wouldn’t have a business without them. And I am happy for their early successes with video.
But these efforts are all just “one-offs” – minor incremental enhancements to the core business. That much is obvious in today’s video commerce landscape. Want proof? How many e-commerce retailers can you name that you immediately associate with video retailing? I can think of just a handful. ShopNBC, HSN, QVC, JewelryTV, Shopping Channel, etc. These are the same names I would have given 3 years ago when we started Liveclicker and the VCC. To me, this data point is a little surprising, a little sad, but also extraordinarily exciting because I know the potential for video in e-commerce remains largely untapped. Huge opportunity awaits.
The traditional TV retailers understood the power of video to persuade shoppers and built sizable businesses on top of this insight. For these companies, video was not just an incremental bolt-on to an old business model. It was the business model. Shop-from-home TV worked because these early pioneers discovered the right video format. They learned how to sell through video and make it scale. The formula became obvious. Today, TV retailing is common.
I believe there is a similar format for video that will emerge as the dominant one in web video commerce. It might be something like http://tv.shopnbc.com. It might be something entirely different. What I do know is that compared to the TV retailers that had to invest vast sums of money to build reach and brand awareness through video, with web video the hurdles are considerably lower. Video is cheaper to produce and distribute than ever before. To build a “TV” channel one needs to just launch a site or page and promote it. Yes, yes, I know it’s more involved, but I’m speaking in relative terms. The point is that barriers have never been lower, and the skies ahead so blue.
Yet all the industry seems to care about is how to increment the existing core business by 15% on this or that product page, or drive up SEO visits by 20% on this or that product. Not enough merchants are interested in building out web video channels or otherwise expanding the paradigm of video by putting their money on the table and taking a risk.
Again, please don’t misunderstand me; video SEO and conversion improvement through video are important. But they’re incremental improvements built off of existing e-commerce paradigms. I am sure that some retailer out there is going to be willing to move beyond the periphery of current e-commerce business models and rock the market with a radical and new bold approach. I think this retailer will become massively successful. They’ll build an entirely new line of business and bring e-commerce to the next level.
I wish I knew the answer to how this will be done. I don’t.
For now, I’ll continue talking about how video improves conversion, drives SEO, engages users on Facebook, and about the merits of YouTube as a search engine. These topics are important to the industry today and remain the bedrock of our business. Still, I think we’d all be kidding ourselves if we thought these incremental improvements are the ones that will define video commerce as an industry ad infinitum.
Until next time,