Online Video for Retailers


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Online Video Drives Conversion and Traffic While Reducing Returns and Service Costs

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Online Video for Retailers

  1. 1. WATCH THIS!The Online Retailer’s Guide to Video Merchandising Success
  2. 2. Contents• Introduction• Why Video Matters More than Ever to Online Retailers• Research Results• Beyond Merchandising: Solving the Video Problem• Summary• Talk to Us• About Invodo• References
  3. 3. IntroductionWe’re pleased to present the results of our research on how online retailers can get the biggest impact fromtheir video merchandising. We analyzed data on how video was performing on fifty-three of our customers’websites, with an average of 138 products with video per site. That works out to 7,314 product pages sampledin this data. To our knowledge, that’s the largest sample size in any eCommerce video study to date. Theresults give you, the online retailer, insight into how to merchandise your videos online for the greatest possibleimpact. We’ve detailed our findings and condensed them into a set of actionable recommendations.Why Video Matters More than Ever to Online RetailersBut first let’s review some tasty third-party statistics to remind ourselves of why we should care. Comscorereports that as of the end of 2009, nearly 85% of the US online audience viewed online video, with the averageviewer watching 12.2 hours of video during the month of November1. Those numbers show the rapid shift fromthe first screen, the television, to the second screen, the computer. Mobile – the third screen – is coming up fast.And the fourth screen, out-of-home digital, will likely rely on video as a core element.Internet Retailer and eMarketer surveys both report that many online retailers are adding video to their web-sites, with video being one of two top priorities. Reduced returns, reduced cart abandons, and increased salesare the clear benefits2, along with SEO impact that Forrester quantifies as increasing the chance of a front-page Google result by 53x3. That led 43% of retailers to plan to add video at the start of 20094, and that numberis now over 64%5 as of January 2010. The increase in sales is especially compelling since numerous sources havedocumented conversion rate increases of 30% or more6,7. 30% Increased Increased Sales Reduced Returns Reduced Cart Abandons Conversion Rate | © 2010 Invodo, Inc. All Rights Reserved.
  4. 4. Let’s do the following quick math to show why that matters. Assume you get 500,000 visits per month, each oneviewing two product pages. If you currently convert at 3% with a $100 average transaction, you have$3,000,000 in monthly sales. A 30% increase in conversion would bring your conversion rate to 3.9% and add$900,000 in monthly sales. That’s a compelling case for adding video – even before benefits in terms of SEO,decreased returns and cart abandons, and enhanced customer experience are factored in. Current Business Visits per Month 500,000 Product Page Views per Visit 2 Product Page Views per Month 1,000,000 Conversion Rate 3% Number of Transactions 30,000 Average Ticket $100 Monthly Sales $3,000,000 Business Impact of Video Conversion Rate Increase 30% New Conversion Rate 3.9% Additonal Transactions 9,000 Incremental Monthly Sales $900,000 | © 2010 Invodo, Inc. All Rights Reserved.
  5. 5. Research ResultsThe key metric here is View Through Rate (VTR). Expressed as a percentage, VTR is the ratio of Views (videoswatched) to Impressions (video players served to web pages). To make it very simple, a 25% VTR meansthat, if the player was served 100 times, the end user chose to view at least a portion of the video 25 ofthose times.We reviewed video VTR data for a three-month period from fifty-three of our online retailer customerscovering a range of verticals including home décor, sporting goods, music, toys and consumer electronics.The customer size ranged from small retailers to Internet 50 powerhouses, and the time period coveredNovember 2009 – January 2010. The average retailer had 138 product pages with video, so 7,314 productpages are represented in this data set, as we mentioned in the introduction. That’s enough data to claimsignificance and breadth across categories, making these results broadly applicable and, we hope, usefulto the online retail community. View Volume and View Through Rate 35,000 80% 30,000 70% 60% 25,000 50% 20,000 40% 15,000 30% 10,000 20% 10% 5,000 0% 0 (Customer) A B C D E F G H I J K L M N O P Q R S T U V W X Y Z AA BB CC DD EE FF Views Total VTRThe VTR in the sample ranged from 5% to almost 70%, with a weighted average of around 22%. (We threwout a few outliers, notably pages with only a few impressions where the VTR was 100%, to avoid skewing theresults). The research question we asked ourselves was this: How can an online retailer maximize ViewThrough Rate? We tested four hypotheses and found the following results. | © 2010 Invodo, Inc. All Rights Reserved.
  6. 6. Hypothesis 1:Placing video above the fold results ina greater View Through Rate than Placement Impact on VTRvideo below the fold.The concept of “Above the fold” originates in 30%the newspaper industry and refers to the choicest 25%location on the front page – visible even when 20%the newspaper is folded in half and displayed face 15%up on the newsstand. In web design, the termrefers to the portions of a webpage that are visible 10%without scrolling. Of course, the exact location 5%of the “fold” differs based on browser and monitor 0%resolution. We went with the OneStat.comrecommendation that assumes users have their Below the Fold Above the Foldresolution set to 1024 x 768 pixels, since thataccounts for 54% of Internet users.Not surprisingly, this proved true. The player achieved an average VTR of 25.7% above the fold – almost twicethe 15.1% for players below the fold. So treat with skepticism the leading-edge Web theorists who claim that“the fold doesn’t matter anymore.” To online shoppers, it clearly does. And if you want those online shoppers tobe influenced by your video, the higher on the page you place it, the better off you are.Further research will focus on the impact of going further and occupying the “hero position” typically reservedfor a still product image on the page. VTR has greatly increased when we’ve placed video here, but we needfurther data to confirm that impact. We’ll also watch for changes based on the explosion of mobile commerce,as above the fold is a completely different proposition on a mobile browser. M-commerce presents new chal-lenges for the online retailer as well as opening up new opportunities, such as closer integration betweenbricks-and-mortar and online stores. Actionable Recommendation: Focus on premier placement for your videos and get them above the fold whenever possible. If you can’t get them above the fold, use merchandising tools like icons and image overlays to call attention to your videos. | © 2010 Invodo, Inc. All Rights Reserved.
  7. 7. Hypothesis 2:View Through Rate declines with an Impact of Competing Elements on VTRincreasing number of elementscompeting for clicks on the page. 21+The common-sense rationale is that clicks are a 15-20zero-sum game. The more elements on the page 11-15compete for the click, the less often any one elementwill be clicked. We excluded global headers and 6-10footers from this analysis since we believe users are 1-5focused on the center of the page in deciding whereto click unless they are navigating to another part ofthe site. 0% 5% 10% 15% 20% 25% 30%We were pretty attached to this hypothesis and were surprised to be proven wrong – kind of. Video on pageswith 1-5 and 6-10 clickable elements outperforms video on pages with 11-15 and 15-20 clickable elements bya significant margin. By that standard, fewer places to click equals more video plays. But the big surprise wasa 26.4% VTR for pages with over 21 clickable elements.This finding calls for further research. It’s possible that users react to a crowded and confusing page bychoosing video to help them make sense of all the information. We know that video excels at conveyingcomplex information in a simple form, so perhaps this explains the behavior. Perhaps the most likelyexplanation is that the number of elements on the page is less important than what and where they are onthe page – in which case heat mapping would yield insights. Actionable Recommendation: Consider carefully the potential impact of competing clickable elements on a page. Monitor the impact as new elements are introduced. | © 2010 Invodo, Inc. All Rights Reserved.
  8. 8. Hypothesis 3:Adding a video with a text call toaction (“Click to play”, Click to view”)increases View Through Rate.Just as the salesperson bags Impact of Text Call to Action on VTRthe deal by asking for thebusiness, the online marketer 25%increases conversion by 20%asking for the click. That’s the 15%theory. 10% 5% 0% No Text CTA Text CTAAnd the theory holds, with VTR of 23.9% with a text CTA versus 21.4% without. With increasing adoption ofonline video, the text CTA is probably less important than it used to be, as most viewers understand a ‘Play’button. This impact is not nearly as striking as the impact when the player is moved above the fold, butevery point of VTR makes a difference. Actionable Recommendation: When possible, include a text call to action (“click to view” or similar) with the video player. | © 2010 Invodo, Inc. All Rights Reserved.
  9. 9. Hypothesis 4:Increasing the size of the video playerincreases View Through Rate.The Invodo Embedded Video Player (IEVP) renders as Impact of Resized Player on VTR480 x 720 pixels on the page. However, it can becustomized by sizing it down when needed. We had 25%cautioned retailers that rendering it too small might 20%decrease VTR – but we wanted to run the numbers to 15%verify or disprove that claim. 10% 5% 0% Reduced Size Full SizeThe data confirms this hypothesis. The full-sized Invodo Embedded Video Player implementations generateda VTR of 22.5%, versus 19.0% for implementations scaled down to 250 x 140 pixels. Again, this benefit isn’t asbig as moving the player above the fold, but as a best practice, a larger player (within reason) is better.We’ll do further research here: is a small player above the fold better than a large player below the fold? Itappears so, as the above the fold upside exceeds the resized-player downside, but a dedicated study onthe topic is needed to resolve the question. Actionable Recommendation: Avoid resizing the player unless it is absolutely necessary to get an above the fold placement. | © 2010 Invodo, Inc. All Rights Reserved.
  10. 10. Beyond Merchandising: Solving the Online Retail Video ProblemBy this point you’re likely to agree that videohas clear benefit for an online retailer, andthat merchandising the video wisely as anintegral element of the page maximizes thatbenefit. So what else stands in the way oflaunching a video program? Unlike manyeCommerce enhancements, adding videorequires three very distinct competencies:Content, Platform, and Network.Few online retailers and fewer video provid-ers are skilled in all three. A brief explanationof the framework we use with our customersat Invodo follows. Drive Traffic Increased Conversion Rates Invodo’s three-tiered solution increases traffic and conversion rates while reducing product returns. Reduced Product Returns | © 2010 Invodo, Inc. All Rights Reserved.
  11. 11. Content. Where will you acquire the video content? If it’s from manufacturers, how will you avoid having to create a ‘content wrangler’ position to manage multiple file formats and keep the content updated and fresh? If you plan to create your own content or use a video production company, what type of content will you create? How will you be sure it is eCommerce-optimized in terms of content, length and format? How will you create content in a scalable manner? Creating a few videos is relatively easy. But creating eCommerce-optimized video at scale is a very different proposition. Platform. How will you host & stream the content across the site? Most video platforms are not focused on the needs of the online retailer. Many charge a premium for functionality that’s irrelevant at best and distracting at worst, given an online retailer’s focus on driving conversion. Self-hosting may not be the right answer for bandwidth-intensive content like video. Even if the customer experience and branding were acceptable, do-it-yourself options like YouTube and Vimeo come with a hidden cost: traffic that is diverted away from the retail site to YouTube, and cannot be recovered. Network. The more points of distribution for the content, the greater the benefit. Getting on the product page, where the rubber meets the road in terms of conversion, is a good start. But a video program adds more benefit as it is expanded to include other points of consideration. Some likely targets are category pages and video galleries on your retail site. Optimized content distributed to social sites, like YouTube and Facebook, adds incremental views and traffic rather than diluting the impact of the original unique content. And video content on a mobile platform can meet consumers wherever they are shopping and even bridge the gap to driving sales in brick-and-mortar locations.All three elements are needed for a successful eCommerce video program. But toget the most out of it you also need merchandising expertise to ensure your videosare viewed. The more your videos are viewed, the higher the impact on conversion. | © 2010 Invodo, Inc. All Rights Reserved.
  12. 12. SummaryVideo has clear benefit to online retailers and that benefit is maximized when the video is merchandisedappropriately. Key elements of that merchandising include keeping valuable content above the fold,avoiding user confusion from too many options, asking for the click, and keeping elements large enoughto matter. Given its popularity and communication potential, video has a more powerful attraction thanmany other elements and can be expected to outperform text, still images and other more traditionalelements. That leads the savvy online marketer to make video an integral element on the page ratherthan adding it as an afterthought. Sometimes circumstances force a less-than-optimal placement, inwhich case merchandising tools such as icons and image overlays can help increase VTR.Talk to UsWe hope this information is useful to you, and we’d like your comments andfeedback. Share your thoughts by commenting on the Invodo blog at, reach us by email at or bytelephone at 1-800-280-4122.About Invodo. . . Video that makes a differenceInvodo helps businesses sell more through the power of video. The immediacy of video drives conversionfor retailers, consideration for manufacturers, and satisfaction for consumers. Invodo works with Internet500 retailers and major brands to create eCommerce video that drives traffic, increases conversion ratesand reduces returns. Based in Austin, TX, Invodo is backed by Sevin Rosen and S3 Ventures. | © 2010 Invodo, Inc. All Rights Reserved. More Questions? Reach us at 512.279.4800 or visit
  13. 13. References 1 Comscore, ‘November Sees Number of U.S. Video Views Online Surpass 30 Billion for First Time on Record’, January 5, 2010 2 eMarketer, ‘Video Usage in eCommerce: The Best is Yet to Come’, January, 2009 3 Forrester Research, “The Easiest Way to a First-Page Ranking on Google”, January 8, 2009 4 Internet Retailer, ‘More Than a Pretty Face’, January, 2009 5 Forrester Research, ‘Online Retailers’ Adoption of Video Content is Ahead of Consumers’ Preferences’, November 5, 2009 6 Practical eCommerce, ‘Video Boosts Online Sales, Merchants Confirm’, November, 2008 7 Internet Retailer, ‘’s Videos Pay Dividends On and Off Its Site’, January, 2009 | © 2010 Invodo, Inc. All Rights Reserved. More Questions? Reach us at 512.279.4800 or visit