The Growth and Future of Video In E-Commerce: Creativity Versus Psychology

The Growth and Future of Video In E-Commerce: Creativity Versus Psychology

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I interview Justin Foster, host of the 2010 Video Commerce Summit held in Seattle this past week. Justin talks with me about the reasons for the growth of video in e-commerce, the challenges to overcome, some key issues of discussion and debate, and projections for where the technology and human behavior around video will lead us.

Justin Foster is the co-Founder and VP of Market Development for Liveclicker, a video commerce technology platform geared for revenue generation for clients. (They’re also the sponsor of all my coverage of the 2010 Video Commerce Summit conference, so thanks again to them for our coverage and be sure to check them out.) Justin is also the founder of the Video Commerce Consortium, where you can read the recap of the Summit and the entire day of panels.  Justin is also a “friend-of-the-show” who we did a video interview (seen here) with last year.

Grant: Let’s start off with the most basic question: Why do video in e-commerce?

Justin: Video, when used effectively, can be highly persuasive. Unlike just text or images, video can be used to stir the imagination of shoppers, so they can visualize what a product looks like in real life before making a purchase. It also gives merchants an opportunity to really build a stronger, more trusting relationship. There’s no better way than by using video for merchants to showcase their brand, and the people that are behind the brand.

Grant: Would you say that video in e-commerce has been growing, and what have been the factors behind that growth?

Justin: Video in e-commerce is definitely growing. According to report Forrester Research released in November last year, for the top 50 U.S. Internet Retail websites, the adoption online video grew by almost 400 percent last year alone. What’s been driving the growth now is really a few things. First, more people have access to broadband Internet than ever before. As a result of that, people are actually able to watch video online. Beyond that, video has really taken off in other sectors. Obviously, video is really huge in media and publishing. We have witness the rise of YouTube as well. Today, consumers are just increasingly expecting to see video as part of their everyday, online experience. As this expectation for video grows, merchants are really beginning to jump on the bandwagon and use video for their own sites.

Grant: Tell us about the Video Commerce Consortium

Justin: The VCC is a large group of e-commerce professionals, online marketers, and online advertising professionals of all sizes. We’re just e-commerce people that get together online to discuss best practices around how to use video in e-commerce. It’s basically an online discussion board. We also hold events at various different trade shows throughout the year. It’s a very grass-roots type of movement. It’s not specifically affiliated with my own company, Liveclicker. It’s a 501c3 non-profit. Currently, we have over 500 retailers in the group.

Grant: Why did you decide to do this conference, and what were your goals with it?

Justin: Both the VCC and the Video Commerce Summit were designed to be venues that allow people involved in video and e-commerce to come together, absorb information from thought leaders in our space, and share best practices in a highly interactive type of manner. This idea around exchanging knowledge in a grassroots manner have been huge factors both for the VCC and the Video Commerce Summit.

Grant: What were some of the key areas of discussion and debate at this year’s Video Commerce Summit?

Justin: There was a lot of debate about the future of online video in e-commerce. We had some really great thought leaders who all agreed that there’s a really bright future in personalized and automated video in e-commerce; although, there wasn’t a lot of agreement as to what form that video would take. Whether, for example, it would be computer-generated video; or perhaps it would be automated through use of production and optimization technologies, or perhaps the video automation could occur through sourcing user-generated content, or maybe a combination of all of the above.

There was also debate on video in e-mail. We had a panel on the state of video in e-mail today. For example, is it acceptable to use GIF animations in email? Are animated GIFs really videos, or not? That was a point of discussion amongst the audience members as well.

We also covered Video SEO, product-page video, creating persuasive video content… We were really across the entire spectrum of issues that e-commerce sites face today with creating video.

Grant: What do you see as the obstacles for companies in e-commerce to get started, or get more involved, with video?

Justin: I think there are a couple things. The first issue facing e-commerce sites today is that those businesses lack the knowledge, or expertise, to use video online. We’re talking about organizations that, for the most part, have marketed themselves through e-mail, maybe they do some SEO, PPC, and social media campaigns. They’re also very good merchandisers, but they’ve worked historically with text and images; so, they don’t really have the skill sets in-house to understand how to produce effective video content. I think that’s really the first challenge: it’s a resources/organizational knowledge issue.

For those retailers that do have those resources, there are some strategic issues that play in as well. For example, many retailers struggle with deciding what videos are going to get produced first, or what style of content should be at the forefront. It’s clear that the center of gravity around some of the most successful video commerce programs is at the product level, although video commerce is about more than product video. For those folks who are doing product videos, I would say the biggest challenge is figuring out how to make that scale effectively; and especially, how to make that scale effectively across either a large number of products or to achieve wide enough distribution that fewer videos can power the business and support business cases for “long tail” products.

Grant: Your keynote speaker, BJ Fogg of Stanford University, made what I found to be a rather interesting point in his presentation: He argues that while we have experienced many revolutionary advances in technology just in our own lifetime (including the technology of video), human behavior has remained a constant for thousands of years. He appeared to be arguing that video producers have become too focused on the creative expression, when they need to better understand the underlying psychology of human behavior – as part of producing videos for their online consumption.

Justin: I think video producers, in general, like to do things that are creative; maybe sometimes wacky or entertaining. A lot of video producers have background in the entertainment and media industries. BJ really pulled the focus back to this idea of persuasion – that human beings are, and fundamentally have been, the same for a while; and by applying some simple techniques to video, such as understanding what is motivating a shopper to buy a product, what’s their ability to complete the task or how simple it should be, merchants can more effectively persuade shoppers.

Grant: What are your thoughts for your next Video Commerce Summit and the growth of e-commerce video?

Justin: I think the entire online video industry is moving into a bit more of commercial phase now. We’ve sort of had “Phase 1” where the industry was very focused on media. Now, everyone is trying to figure out monetization – how to make video pay for itself (i.e., how it’s going to be used to actually push sales, including sales of products.) I think this whole idea of video in e-commerce is going to continue to expand. Right now, at our own Summit, it feels like its 1997 all over again. That was when folks were just starting to realize that SEO was a real discipline, and also when they were starting to get more sophisticated with their merchandising and e-mail marketing strategies.

I really do see a bright future for the summit. I think we’re going to start doing two a year. Our goal would be to at least double the number of attendees every year.


Video Industry

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