And today, 6 short years since the YouTube domain was first registered, the daughter of video – online video – is simply blossoming.  Some would even say exploding. So I propose that today, video saves the eCommerce stars, giving leading and innovative merchants a renewed basis for differentiation and online growth.

Why?

To set the scene, first and foremost, lets look at some generic online video statistics:

1. YouTube counted more than 112m unique viewers in the U.S. alone in Jan 2011, and served up nearly 8.5bn streams (Nielsen).
2. The total U.S. internet audience engaged in nearly 4.9 billion viewing sessions during the course of the January 2011. (Comscore)
3. 171 million U.S. Internet users watched online video content in January for an average of 14.5 hours per viewer (Comscore)
4. 83.5 percent of the U.S. Internet audience viewed online video in January 2011, with the average duration of the average online content video being 5.0 minutes, while the average online video ad was 0.4 minutes (Comscore)
5. Home and work online video usage rose 45% in January 2011 as compared to January 2010 (Nielsen).
6. The number of unique viewers increased by slightly more than 3% (Nielsen).
7. In January 2011 Google Sites (stats driven predominantly by YouTube.com) , ranked as the top US online video content property (144.1 million unique viewers), VEVO was no. 2 (51.0 million), Yahoo! Sites no. 3 (48.7 million) and Viacom Digital no. 4 (48.1 million viewers) (Comscore)
8. In January 2011, the average time spent per viewer was 283 minutes – 4.7 hours (Comscore)
   • However the average Netflix viewer spends far more time engaging – 11 hours and eight minutes (Nielsen)
   • Hulu’s viewers spent on average five hours and 35 minutes viewing video (Nielsen)

(Hat tip to Patricio Robles for publishing some of these stats here)

As Patricio outlines, point 6 is massively important.  It means that rising online video viewing is happening on the back of greater consumption, by broadly the same audience.

And lets not ignore some anecdotal evidence which also suggests its an exciting time for online video – lovefilm just got gobbled up by Amazon after all.

So what do these statistics imply for merchants?

Well certainly online video is a huge business, spawning new industries (streaming, video on demand, P2P, vodcasting) and is cutting across other types of media consumption (like TV). But what is also becoming clearer, is that professionally developed online videos are already far ‘stickier’ than many perceive. And with viewers able to engage in online video properly (in many more places, on many more devices) a pretty seismic shift is occurring in the way merchants can merchandise and communicate with their customers.

Why merchants must adopt online video.

1. Video is a rich absorbing way to help build up a brand’s ‘backstory’ and can be used to build up brand equity
2. Video can help ‘engage’ customers more deeply – brands can develop ‘how to’ guides, provide advice and tips, and develop video galleries with ‘ask & answer’ style formats
3. Merchants can leverage increasing thirst for online video, and increase page views on key pages with promotional or relevant video placement
4. Merchants can leverage and increase time spent on key category or product pages (as a result of video placement) and seek to up-sell or cross-sell and display (in situ) clear ‘call to action’  overlays in online video (e.g. promoting 10% off if ordered today)
5. Merchants can provide deeper / richer merchandising capabilities on product pages, potentially leading to better conversion.  For example videos can display 360° views of a product, assembly instructions, customer service videos, or even customer or celebrity endorsements.
6. Merchants can look to re-purpose or re-use online video assets across other channels  (e.g. Blogs, affiliate websites, email [remember html5's role here] or even within interactive newsletters)
7. Merchants can tie QR codes (offline) with online video (e.g. catalogue -> web, instore -> smart phone).

Hogwash? The results are already becoming clearer for merchants who are early adoptors of online video. For merchants who have begun to explore the use of video to develop deeper, more compelling user experiences (particularly for Gen-Y [18 to 34 year olds]) they have found online video helps them reach their revenue growth aspirations.  This is already being echoed in research:

1. According to Comscore, brands using online video have seen lifts of anywhere from 20%-40% in terms of incremental buying.

Online video Innovation – A quick merchant showcase [click on any image to enlarge]

M&S

Marks & Spencer have an advanced M&S TV section on their website, with enough gravitas behind it to merit a key placement on their eCommerce website homepage navigation (see circled in yellow below)

The TV Channel is powered by Adjust Your Set, a full service video production agency with its own ‘video commerce’ ­platform.  M&S’s TV Channel page has a gallery style, with all the ‘Channels’ displayed in a familiar way.

However, when you pick a channel, the eCommerce potential of M&S TV becomes much clearer. As a video is played, the right hand side reveals thumbnails for each respective garment during video playback.  The correct colour of each garment is displayed, as is the price. And I noticed that if the product is out of stock it displays it as such at this stage (albeit not all the time). Customers can click the product thumbnail to reach the full product detail page, containing more detailed information such as delivery & returns info or detailed product reviews.

I think the potential of M&S TV is best exemplified on their Wine Channel.  Clearly M&S is in the business of selling bottles of wine – but their wine channel explores areas of wine that customers will be interested in; namely wine of the week, wine making, top tips, wedding wines etc.  This demonstrates the value-add and wow! factor, that video can bring to customers.

Moreover M&S constantly promote a show reel of the most popular videos, displaying both runtime and more details on rollover (Chianti video rollover highlighted below)

And M&S’s use of video does not end there though. On the product details page, videos are once again used to support product copy.  Notably the same videos are used in store (evidence of multi channel marketing in operation).

Amazon.com

As always Amazon are a pioneer in the video space.  They have been placing videos on product information pages for some time as characterised on their Kindle page.

But their use of video is being driven into other areas, and they have chosen to embellish their (already ludicrously rich) product information pages with user generated video content.  Participation levels I would suggest are quite low, but what better way to foster impartial advice?  Hopefully Amazon customers won’t be seeing this image too often.

I remember both Lush and Comet asking for similar user reviews in the past, with mixed success.  It will be interesting to monitor how user generated video content grows with smart phone growth. I’d also expect to see video reviews surfaced across multiple channels (e.g. Amazon could leverage videos across its mobile channel or its iPad interface as well as in its price comparison App’s in due course. No doubt 4G services will play a big part in the adoption of video across mobile properties.

Kiddicare

UK based Kiddicare (now owned by Morrisons) have really been pioneers in the use of video on their eCommerce site.  They have over 2,335 videos (at the time of writing) on their Kiddicare.com Television channel, and also large video representation on YouTube, their affiliate sites and various sites they syndicate to.  They partner with Liveclicker.

The Television Channel promotes a number of different genres of video, tips & advice, reviews, accessories, buggywalks, product features, help, and promotional.  What I really like is the categorisation too.  Customers who are interested in a particular brand can easily navigate to the appropriate video, equally a customer who may not know what type of booster seat is needed for 4-11 year olds can easily find what they need.

To facilitate sales, embedded within each video featuring a product is a clickable thumbnail, which links out directly to the eCommerce website and the respective product details page.

Casting further afield, and pulling people into Kiddicare.com, Kiddicare’s Youtube Channel has 750 subscribers (796 Friends) and a total of 11,980,349 total upload views to date.

(Disclaimer, Kiddicare are a  Salmon client, and our work with them is viewable here)

ASOS

ASOS also promote videos on their site, these include ‘latest’, ‘Celebrity’, ‘Cover Shoots’, ‘Designer Interviews’, ‘Fashion Week’, ‘Music’ and ‘Events’.

Interestingly though they are already re-using video in one particular iteration of their digital magazine.

Their product detail pages also include video, which displays professionally shot catwalk style videos but also (nicely) highlights the background music you were listening to; which adds to the experience and depth of the ‘ASOS lifestyle’ customer experience, in my opinion.

Net-a-Porter

Just this month, Net-a-Porter also launched their own TV station. Visitors are able to shop, browse and comment on four channels: ‘Runway‘, ‘Who’s Who‘, ‘Trends 101‘ and ‘Flashbacks‘.  Net-a-Porter are using the Brightcove video platform.

In the interests of multi channel, Net-a-Porter have taken the time to ensure their TV station can be viewed online, on mobile devices and on the iPad. Notably, however, the company is already making strides with regards to Interactive TV, and will launch in the US on Google TV-enabled devices. It’s already available to view on the internet

Alison Loehnis, Net-a-Porter’s VP of Sales and Marketing, said after its launch, “We have taken our original concept of a shop-able magazine one step further with the addition of shop-able TV.”

On Net-a-Porter.com, video is used in a different way to M&S, video content ‘connecting’ to products in the eCommerce catalogue via a link like, “Shop the Current Collection” or “Shop the Claudia Schiffer look”.

This approach ‘groups’ products on related landing pages as opposed to driving customers to a single product details page.

As video commerce matures, analytics will show which approach (driving customers to a landing page or a single product detail page) converts highest.  Net-a-Porter’s current approach brilliantly irons out ‘back’ button issues (i.e. when a customer is clicking in and out of pages based on video or thumbnail content) which doesn’t transition well on other sites.

Interestingly, however, on Net-a-Porter.com online video is also used on product detail pages, although in this merchants instance the customer currently doesn’t benefit from an embedded player to pause, rewind etc.

Knicker Picker

Although it has been around for some time, Knicker Picker is an eCommerce site that has had online video as part of its merchandising strategy for some time. I show it simply for one reason: the company has really tried hard to use video to heavily contextualise their product; showing customers what the items are like on ordinary people, outside of a fashion catwalk.  I think it’s an interesting case study even today, as it illustrates the flexibility that video provides in terms of developing a brand story.

Video platforms – what’s needed?

There are many video platforms available, each with their own twist and particular orientation. For some of the companies in this space, their origins lie in video production and so there remains a skew towards this aspect of their businesses. However for many other vendors, the emphasis is on technology, streaming, eCommerce, social media and simply using online video to sell. For merchants choosing an online video platform, getting the correct balance between the technology platform and production quality can be hard, and requires serious investment across potentially multiple suppliers and in-house operations. And production and technology platform aside, merchants also need to think hard about how best to integrate into already sophisticated eCommerce customer journey’s.

Video production aside, here’s a quick checklist of what merchants should be looking for from their online video platform.

1. Flexibility of branded & unbranded embeddable player
2. Built-in accessibility
3. Ability to integrate (potentially in real time) video content with eCommerce product catalogue databases and flexibility to link to either a singular product thumbnail and a single product detail page, or to a relevant and broader landing page)
4. Clickable and customisable video overlays, again harnessing integration with eCommerce catalogue content – price, description, ratings & reviews, stock availability, call to action and importantly a ‘buy now’ procedure
5. A full suite of social media and sharing options
6. Automated video publishing – uploading, encoding
7. Video SEO
8. Video serving optimisation via CDNs (Content Delivery Networks)
9. Video Analytics, including A/B testing, dashboards, reports
10. Video content management and production workflow
11. Video distribution, syndication, synchronisation
12. Livestreaming capability (e.g. for customer service video chat)
13. Options for advertising and monetization
14. Support for HD and HTML5
15. Video migration tools (you might change your mind – don’t get tied in)

Which video platforms are attracting merchants?

Each merchant has different needs and aspires to different goals with their use of online video. Here is a short list of companies that merchants should look at in more detail in my opinion.  I am sure I have missed some off this list (but this reflects how fast-moving and dynamic the online video space currently is);

Adjust Your Set
Brightcove
Buto
Buystream
Flixmedia
LiveClicker
Overlay.tv
Qoof
Scene7
Treepodia
ViCommerce
VideoClix.tv

What’s the future for online video?

Clearly online video is moving very quickly and adoption rates are surging, reflecting customer thirst.

One of the key future issues is likely to be better distribution and delivery of video content to mobile devices.  But additionally, how online video connects with and integrates with Interactive TV is an area worth monitoring.

Whilst user generated video is being throttled by a lack of desire by customers to either ‘live stream’ or be be the ‘star of the show’, this mentality is slowly changing – so support for uploading and livestreaming seems to be increasingly important.

And as online video matures still further, there is no doubt that it will be worth observing trends toward HD and potentially 3D formats too.

Finally what is absolutely clear, for merchants at least, is that standalone online video will fall away as fully integrated video commerce solutions prevail.

Suggested further reading: Comscore : The State of Online Video

Here’s 9 areas to watch (and perhaps react to) in relation to front-end eCommerce website development initiatives during 2011. It is by no means exhaustive, but reflects a few of the overriding trends and movements that will impact front-end development.

We’ve deliberately steered away from merely ‘design’ specific trends.  For those you could go here, it’s a pretty good list with a little overlap on ours.  For digital marketing trends look no further than Ashley Friedlein’s list on eConsultancy.com, and for the mega-trends out there take a look at Marian Salzman’s Euro RSC Worldwide PR report and her “11 Trends for 2011″.

*Update* 19/01/2011: Retail Week just published their “What’s hot in eTail” list, which is more generic but worth a read (requires Retail Week Subscription)
*Update* 24/01/2010: Fortune and CNN Money today discuss how smartphone growth in 2011 that could totally eclipse anything we’ve seen before. 

So here it is: 9 areas to watch at the front-end of eCommerce this year

1. “f-commerce” becomes a verb Beyond mere fan pages and ‘like’ buttons, merchants will re-focus on Facebook and look to develop eCommerce websites completely within Facebook.   With more than 500 million active users (50% of active users logging onto Facebook in any given day, the average user having 130 friends and people spending over 700 billion minutes per month on Facebook, more here) the potential ROI appears to be huge. And yet developing an eCommerce solution inside Facebook is not without its potential drawbacks.  In this post, Michael Hoffman remarks (in the comments) that firstly, “Facebook provides no service level agreements. Therefore, if Facebook is down, you are down. If your app is performing poorly, there is no one you can call directly. All applications are treated equally.” Michael’s second point is equally poignant…. so let’s think about Facebook security for a moment…. it’s a fact that Facebook profiles are sometimes hacked so is there a knock-on issue in this regard towards f-commerce? And what about the .api, the PCI compliance, the optimisation of Facebook eCommerce stores for mobile devices, and payment….wow, the list goes on (and that’s not even counting the growing WhiteWalling trend as recently discussed by Drew Benvie).  What is certain is that those merchants that get to grips with any potential issues first, will also see the upside first; and already pioneers like JC Penney are putting their best foot forward already as are ASOS in Europe (n.b. ASOS link requires Retail Week subscription). On the flip side, on the merchant eCommerce websites itself, there is little doubt that exposing a shoppers social graph will unearth recommendations and reviews that an algorithm simply would not. I can’t think of many people who wouldn’t be delighted to see what their social graph (or certainly a selection of their social graph) has been buying and saying about particular products and services.
2. The Mobile Web Explosion If last year was the year that mobile commerce finally arrived (actually it was the year before last imho), expect to hear the herd stampeding this year. Mobile internet use is going to keep rising, and along with it, so will the number of mobile versions of existing sites needing to be developed or thought through.  Think about access by phones, tablets, even eReaders plus a host of other devices – and think about it strategically would be our opinion.  Apps no doubt will continue to be developed, but they’ll find their place within retail strategy (and it will probably be less important than your average app developer will tell you today) because really it’s the mobile web that will explode.  In the short term, payment is going to be a key area to nail down in transactional eCommerce terms and those that thought about payment strategically in the first place should have little problem exploiting investments already made on their conventional eCommerce sites (which is what we were able to do for Halfords and ICI/Dulux).  And remember, where there’s payment there is also security to worry about and ‘NFC’ (near field communications) and ‘payment wallets’ and ‘mobile vouchers’ will muddy the confusing water for many.
3. Yay. Internet Explorer 9
   We can all look forward to the release of IE9 (rumoured to be Q1), and along with it better support for CSS3 and HTML5.  It’s so easy optimising complex eCommerce sites for the myriad of browser types and versions that another big release won’t make much difference will it? Hmmmm (See point #9).
   
4. Ahem. Yay.  Firefox 4
   I rest my case.  It too, is expected, to be released, this year.  The punctuation just doesn’t do this whole cross browser compatibility nightmare justice, but alas, our perspective on all this is covered in point #9.
   
5. Web Standards become the standard.  All hail CSS3 and HTML5
   On the upside, with IE9 joining the list of browsers supporting CSS3 and HTML5, expect to see these standards even more widely used.  Interpretation aside, adhering to web standards in eCommerce is very important for many reasons (which we won’t go into detail about here) but two aspects that are very relevant are improved ‘Search’ and ‘Accessibility’.   Then again, add ‘Page weight’, ‘Ease of Maintenance’ and ‘Extensibility’ and benefits relating to the support for access by multiple devises – and everyone in eCommerce should get the message. Maybe grabbing more headlines during the year will be CSS3, mainly because it’s more designer-y (and designers write about this stuff a lot) but to be fair eCommerce site experience WILL become richer, deeper, with a greater sense of dimension than previously; in part (at least) due to CSS3. Whilst ‘text & box shadows’, ’rounded’ corners, ‘gradients’, ‘animations’ & ‘transitions’, a wider variety of fonts and multiple background images will get lots of design-led attention, on an eCommerce site all new design possibilities will need to be thoroughly A/B and multi-variate tested anyway (the results are always surprising) so lets not get too carried away for designs-sake without testing.
   Importantly, whilst HTML5 isn’t going to replace flash altogether, it will at least put it back where it reigns.  So for now and the foreseable future, HTML5 and Flash will simply co-exist.  Proof of that can be seen with one of our partner’s in eCommerce 10CMS, who is helping our retail clients leverage flash components on eCommerce sites in the area of interactive merchandising (with non flash alternatives also served) with stunning conversion results. Their approach in the future is that designers/merchandisers/whoever will be able to serve content in basic html, flash or HTML5. Choices.  Great.  So to say Flash will disappear in eCommerce because of HTML5 is pretty nonsense, but getting the balance right isn’t.
6. Landing Page optimisation & cross channel optimisation
   Online marketing vs. offline marketing vs. traditional marketing vs. digital marketing.  Phew.  For many (usually vendors) it’s still a noisy battleground, but for some merchants who’ve moved away from ‘which’ tactic to pick, to establishing a genuine blend of activities, there’s big benefits to be had from measured, optimised and fully integrated activities.  A great example of where this is going to come home to roost before our very eyes in eCommerce circles during 2011 is the optimisation of (digital) landing pages from (offline) Quick Response (QR) codes on packaging, shelf labels and (whisper it) traditional direct mail. By encouraging bar code or QR code scanning a customer can be taken to an optimised page where they can read rich contextual product information, or in turn be encouraged (post purchase perhaps) to share product comments using audio, photos or video.  The real skill is of course integrating everything, everywhere – and those merchants that can get nearer to integrated marcoms across all customer touchpoints will benefit most.  So whilst we expect to see greater use of QR codes on products and adverts to send customers to (many more) product and offer landing pages in the first instance (it was just an example) – the real battle ground is going to be integrating cross channel activities and having a genuine handle on customer behaviour via cross-channel analytics.
   
7. Tighter Social Network Integration
   Whilst we have already discussed Facebook in a little detail, overall there will be a surge toward tapping into established 3rd party social networks.  Clearly links (to-and-from) Facebook, Twitter, Youtube, Blippy, Foursquare, Amazon, LinkedIn, Go Try It On, Shopkick and Group On and the like WILL have their merits (albeit sometimes merely volume based) but really that’s only half the social network story.  Whilst many major online shops have now realised that it is actually pretty difficult to establish their own social networks (e.g. HMV’s www.getcloser.com failed last year) many will persist; and for those that do so the rewards may well be significant.  Those that maintain their own social functionality (perhaps combined with simple hooks into established social networks as well) will tightly embed and integrate social networking directly into their main eCommerce sites using services like Pluck (which we have implemented before) or KickApps. ASOS is one retailer who is a long way down this road already within the eCommerce industry with its ASOS Life portal that combines blogs, forums, ideas as well as an online market place for clothing. But it’s not just fashion retailers getting in on the act – Sainsbury’s and ASDA have significant presence already too.
   
8. Location Location Location
   First aired in May 2001, Kirstie Allsopp and Phil Spencer are going from strength to strength on their hit show….oh hang on….From Gowalla to FourSquare, to ‘check-in’s', ‘augmented reality’ and ‘mobile vouchers’ – location based offerings are rapidly becoming the eCommerce solution de-rigour.  But beyond the hype (and there’s been a lot) and the fact that 2011 might not even be the year for mainstream adoption, in eCommerce circles ‘location’ services will rapidly become a pretty important component of a genuinely joined up multi channel retail strategy.  With the potential to optimise retail operations in areas such as Supply Chain & Logistics, Merchandising and Store Operations, “location location location” takes on an altogether more complex, and potentially rewarding, topic for eCommerce executives in 2011.  And with smart phones likely to become practically de-facto during the next few years, delivering mobile solutions that leverage both ‘location’ and ‘proximity’  to deliver a better customer experience, are simply a must.  We can certainly see ‘check-in’ promotions happening more often already in the US (e.g. the first 500 checkins instore receiving a free prize or a free voucher) but actually campaigns that focus on the ‘volume’ of followers will be less important than those that centre on the number of ‘influential’ customers a brand has; and as the commercial value of ‘influence’ and ‘trust’ in the social web begins to manifest, merchants will not only need to time their run toward the social web correctly, but also get their aligment spot on.  Look out for Facebook ‘Deals’ in the near future in the UK, and ‘local’ being the location battleground (offers around the corner from home/work, or where you are right now), and the continued rise of Google Places.  And they’ll be a return of older names in the mix like ‘Yell’ who understand locality (and advertising and SEO) pretty damn well.
9. The end of the browser compatibility war This year the focus on browsers will shift from negativity to positivity – and looking ‘forwards’ not ‘backwards’.  The web has changed, and it is no longer a one-size-fits-all arena and nothing like an eCommerce site brings that into sharp focus.  Complex, dynamic websites are going to look different on an iPad to an Android phone to a site viewed on IE8 etc etc.  Supporting different browsers simply does not mean that every eyeball should see the exact same thing.  And if anyone in eCommerce front end design has enough time and money to spend on IE6 vs. better desktop browsers and the host of mobile browsers then I’d be frankly pretty surprised. Here’s the rub.  If it looks different in different browsers its not a bug.  And lets take it one step further: Browser capabilities are to do with the browser maker – not the designer. It really is time to look forward not backward on browser compatibility.

   What’s missing from our list? Please make some suggestions in the comments section.

I saw this video on Youtube. It’s by IBM, promoting their Commerce platform. Worth a watch.