Just What They Wanted

With the 2010 holiday shopping season starting in earnest, retailers are seeking new ways to embolden their e-commerce sites and improve the way customers engage.

One promising technique is online video — short, simple, snappy clips that provide additional product information. In the world of e-commerce, where photos, descriptions, customer reviews and product specs help sell products, video can do what the others can’t — bring the item alive and create urgency for the sale.

Online retailers are getting the message. In a November 2009 report, Forrester Research noted that e-retailers are committed to making product videos central to their merchandising and marketing strategies. Thirty-four of the top 50 Internet retailers are using video content, according to Forrester, compared with nine just a year earlier.

Overstock.com, which specializes in brand-name merchandise at discounted prices, is counting on video clips to boost its product offerings. Working with SundaySky, an early-stage technology company that specializes in e-commerce video optimization, Overstock.com envisions videos for products ranging from faucets to ceiling fans.

SundaySky president Mitch Praver says the Overstock.com project began earlier this year with two product categories during a trial period, then expanded to 10 categories after about 30 days. Now the company is building a collection of more than 50,000 product videos that run less than a minute.

Overstock.com’s product videos have already led to an increase in search engine rankings and traffic to the website, according to Praver, and “We’re trying to expand aggressively leading up to the holiday season.”

Videos boost conversion rates
New York-based digital research service eMarketer noted in a recent report that, despite the fact that consumers rank other online purchase decision-making tools like customer reviews ahead of videos in importance, online retailers are increasingly turning to video as a complement to product pages. Retailers are finding that video content boosts sales conversion rates and reduces shopping cart abandonment and product return rates, according to eMarketer.

SundaySky creates product videos using a technology platform seemingly as simple as the clips themselves, so online retailers can create what Praver calls “limitless” video product content. The clips are created dynamically through the platform’s proprietary XML-based modeling language, which allows definition and synchronization of multimedia elements with the retailer’s existing product information.

The platform creates a video template that maps to the retailer’s brand guidelines and business objectives and then to its XML data feed, Praver says. The result keeps the clip up to date because the processing and synthesis algorithms in the template change as the underlying content is changed.

“No matter what is changed, that is reflected in the data feed and the videos are updated automatically,” he says. “So if a product’s price is reduced or its ratings change, the video will automatically adjust to the new information that is available to it.”

“The use of video is becoming a ‘need-to-have’ as opposed to a ‘nice-to-have,’” Praver says. “But a lot of companies haven’t scaled video. … It’s very costly and very resource intensive. As soon as it’s published, it’s immediately out of date and hard to keep updated.”

Praver says completion rates for SundaySky videos being viewed on sites are about 70 percent.

Listening to the customer
The emerging dynamic of feedback analytics on e-commerce sites for lead generation and conversion represents another technique retailers are expected to aggressively deploy during the holiday season. DMG Consulting of West Orange, N.J., which analyzes contact center surveying/feedback, says the discipline has been undergoing a major transformation buoyed by innovative feedback management solutions and has sparked new forms of communication and social networking applications.

Feedback analytics firm Kampyle has developed a SaaS platform that gives online retailers the ability to collect, analyze and measure customer behavior feedback. The solution, which combines online feedback collection with advanced analytics, also encourages clients to respond directly to customer feedback as another avenue of lead generation.

Feedback brings a human element to online business processes and is wholly different from user surveys, says Kampyle co-founder and CEO Ariel Finkelstein, and SaaS technology allows the platform to be launched to client sites within minutes.

“You create different feedback forms for different processes,” he says. “It’s very, very different from the world of surveys. The feedback form shows that someone took the time to try to understand the customer.”

Since the product launched in 2008, more than 40,000 companies have used its feedback analytics technology. Finkelstein says Kampyle feedback forms can be customized to fit individual online retailers’ needs, and different forms can be created with sub-categories depending on where the user is on the website. On the shopping cart, for instance, price can be a category, with forms to capture feedback from customers who may not agree with pricing or shipping costs.

Typical website analytics programs normally focus on what customers “do” on websites instead of “why” they do what they do, he says. Kampyle’s forms answer the “why.”

“You never know where they are going to leave you” on the e-commerce site, Finkelstein says. “You don’t know where they have issues.”

Focusing on the “why” lets retailers immediately correct an issue with potential customers, such as confusion over a promotion or pricing scheme. In some cases, the site might generate a price discount for the customer as an impetus to come back and make a purchase.

Keeping the customer’s voice relevant in the site’s decision-making process allows for a truer online strategy, Finkelstein says. “You want to discover all those issues beforehand. You want to correct yourself and improve as fast as possible. The system will tell you straightaway what they’re happy about and not happy about and why they’re buying and not buying from you.”