Jun 27, 2012

More Independent Retailers Opt to Produce Product Videos In‑House

Eager to build their own brands as well as the brands they sell, multi-channel outdoor specialty retailers are starting to ramp up their in-house video production.

While some retailers are skeptical of claims that vendor-produced product videos help them convert more browsers into buyers, there is no debating the rising popularity of online videos. In May, the average American Internet user viewed 203 videos, according to research by comScore. About 84.5 percent of U.S. Internet users viewed a video that month, with 48.1 percent of those viewings taking place on YouTube and other Google-owned sites. Facebook ranked fifth in terms of unique viewers.

While comScore did not break out views for product videos on e-commerce sites, it does report that visitors who view product videos are 64 percent more likely to buy the featured product. Invodo, which produces, distributes and measures online videos for retailers and brands, says a survey it commissioned in November 2011 showed U.S. consumers who encountered product videos online watched them 60 percent of the time. Of those surveyed, 36 percent reported watching five or more product videos on a brand or retail website during the preceding three months.

“Online dealers regularly tell us that product videos enrich the buying experience and result in notably higher conversion rates,” said John Pieper, director of sales and marketing for Gregory Pack. “Embedding keeps the consumer on their site and supports their online investment.”

The conversion percentage measures the rate at which visitors to an e-commerce site ultimately buy product from that site during that visit. Online retailers often consider themselves successful if they can convert 2 to 3 percent of visits into sales. To improve their chances of converting these visitors, e-tailers embed videos into their sites rather than link to third-party sites like YouTube or Vimeo to eliminate the risk of a visitor not returning to make a purchase.

In Texas, Backwoods CEO Jennifer Mull remains skeptical that product videos enhance conversion rates at her company’s online store. Still, Backwoods will begin producing its own product videos this year.

“Is it going to impact things that much?” asked Mull. “It’s really sketchy. But you can’t not do it. It’s an expectation of consumers.”

While Mull will continue to embed vendors’ videos, she said their wide availability across the web, and particularly on competitors’ sites, limits their value.

“The problem with vendor video is it does not do anything to promote your store brand,” said Mull. “It may be super high quality, but it does not do anything for you because it’s not unique content.”

As CEO of Backcountryedge.com, which has been producing its own product videos for five years, Tim King agrees that homespun retailer videos are more valuable than generic vendor videos. But the jury is still out on how well they drive sales.

“Creating your own video is expensive and I’m not convinced there is a direct return on investment,” King said. “For us it’s more of a branding tool. These videos probably do more to convince customers to make a decision on which product to buy, but they don’t always buy it from us. They showroom us just as much as they do a physical store.”

The bottom line is that anything that keeps a consumer from going elsewhere for information can only help conversion rates. And if online shoppers are demanding product videos, retailers might as well control some of that content to build their own brands.

At Austin Canoe & Kayak (ACK), CEO Peter Messana said product videos could be the best tool multi-channel retailers have to recreate the their unique brick-and-mortar experience online. Later this year, ACK will launch a major initiative to produce in-house product videos featuring its own employees.

“Our opinion is a manufacturer is good at selling to a retailer, but they don’t necessarily know how to address the consumer,” said Messana. “They can’t talk pros and cons vs. other brands and may highlight the wrong feature for your market.”