Improving online sales – the secret is out!

eMarketer reported in late January that in a single year, the number of customers who viewed online retail videos increased by 40%. More important than this increase however are the reported benefits from web retailers who are seeing a lower number of abandoned shopping carts, reduced return rates and higher sales.

The data isn’t surprising. Anyone who has shopped on line is likely to understand the value of seeing a video about the product before purchasing it. Somehow it brings the online buying experience closer to the familiarity of an in-store experience. So why don’t all vendors offer this added feature if the benefits are so clear? The biggest challenge, says eMarketer, is the high costs associated with the creation of these videos. Cost aside however, there are additional challenges that I can think of:

First, who makes the video? Is it the OEM/supplier, or the retailer? And once it has been created who owns the rights to it? If a retailer spends the money to create the video, can the OEM use it too? What about the risk of channel competitors using it for their own web storefronts?

Second, what about customization? Assume a very simple scenario where an OEM decides to make a video, but it sells 5 different colors of its product to 5 different retailers. What color product is featured in the video? Choose any 1 color to feature, and you alienate 4 other partners. Choose all 5 and you agitate all 5. Make 5 videos and you’ve blown your budget. And this only considers your retailer’s reactions – just wait to see the customer confusion that is created if the product they see in the video is not exactly the one that arrives in the mail! It gets even trickier once you have customized offerings, beyond simply color, available for each vendor as well.

Last but not least – short product cycles become an issue. In a world where products are reinvented, refreshed, and re-released faster than video production times, how on earth do you keep up?

So – what’s the answer? Maybe someone should call the Dorito’s guys who spent $2K to create the Superbowl ad which turned into $1M return. They seem to have figured it out.