How live interactive video drives the next phase of eCommerce
Shoppable video is an exciting mix of entertainment and eCommerce. Pioneered by Chinese online giant Alibaba, it marks the beginning of a new era of eCommerce and provides opportunities for broadcasters, online retailers and brands all around the world.
Over the last 25 years, eCommerce has been steadily developing. It all started with the launch of Amazon in 1994, when the company began selling books online. The ten years that followed were focused heavily on enabling consumers to buy products online, with e-tailers laying the groundwork: websites with shopping baskets, safe payment systems, warehousing, and shipping. On the front end, we cycled through Web 1.0 and Web 2.0. The first product categories that saw substantial online sales were books, travel, and games/DVD’s.
The next phase was ushered in by Apple with the introduction of the first iPhone in 2007. Meanwhile, social media was beginning to make its way into the mainstream: this was the age of Social Mobile, or SoMo. Online shopping behaviour changed. People started buying products from their mobile phones, and social media was being used as key driver to direct traffic to online shops.
In the decade that followed, smartphones became our primary devices for accessing the internet. Boasting a larger screen, faster connection, and faster processor, the smartphone had evolved into a full-lown multimedia device. These technological advancements are a substantial part of the SoMo landscape.
In the first two decades that defined the rise of eCommerce, approximately 10% of American retail sales gradually shifted to online and mobile purchases. In other countries, a similar shift was happening at a different pace due to differences in Internet and smartphone penetration. Despite these changes, 90% of US retail sales still take place in brick-and-mortar shops. According to KPMG, the ongoing prevalence of physical stores can be attributed to four main reasons:
- Lack of sensory experiences online
- The shipping process is often complex and/or time consuming
- The shopping experience is more enjoyable in-store
- Consumers want instant gratification
These pain points can be eliminated by changing the online shopping experience, and the online retailers spearheading these changes are kicking off the next phase of eCommerce: Experience Shopping. This model creates a shopping model that is fun rather than functional. Not only should the outcome of shopping be exciting, but the process should be as well. The categories that are projected to see substantial growth during this phase are personal care, consumer electronics, and fashion.
Key eCommerce players, such as Alibaba and Amazon, are already working on changing the shopping experience by introducing innovative new concepts. Amazon is launching a highly-anticipated shoppable interactive video startup at the end of 2018, but the undisputed movement leader is Chinese online giant Alibaba. This massive web-based marketplace is known for combining entertainment and shopping for their annual Singles’ Day Gala and See-Now-Buy-Now fashion shows. In 2017, Alibaba generated more than $25 billion (USD) of revenue on Singles Day, which is more than 5% of the Chinese eCommerce market’s total annual revenue.
We are only just beginning to scratch the surface of online experience shopping, but we can already identify at least three critical success factors: (1) entertaining video narrative that sells, (2) frictionless conversion, and (3) a strong commercial proposition.
Entertaining video that sells
Most marketing efforts are designed to trigger consumers to seek more information and eventually purchase a product. Shoppable video has this function integrated within the entertaining elements: if the content offers no entertainment value, people will not consume the content. Most people are skipping pre-roll ads or changing channels during commercial breaks, which means that only a small percentage of the potential audience is actually viewing the content. By combining the right types of entertainment to attract your target group, retailers and brands can increase their viewership and create an even bigger opportunity to convert people from viewers into buyers.
To get there, you need to provide just enough information to entice people to explore the product further without feeling like they are part of an infomercial. The next step in the funnel depends on the product that is being sold. For example, a customer looking for a jacket can be directed to a product page, but when you’re looking to buy a car, the next step will probably be to book an appointment at the dealership. It is important to be aware of these different product categories to customize the funnel steps as much as possible for different product categories and user types. We will elaborate on this in an upcoming blog post.
The use of interactivity is intended to complement and reinforce entertainment value. Moreover, it leads to higher user engagement and generates more consumer trust. Content-related games (i.e. trivia), choose your own adventure games, and many more entertainment tools provide an additional layer of entertainment that enriches and intensifies the content. As a retailer or brand, you can learn a lot from user input, and make your brand experience increasingly personal by taking these insights into account. For example, if you know any given user’s shopping preferences, you can show them only the most relevant products for their tastes. This can lead to increased engagement, which can in turn lead to higher conversion.
Frictionless conversion
Many factors play a role in converting a potential customer into a paying customer. You need to reach the consumer, provide relevant content, trigger the consumer’s desire to purchase a product, and enable him or her to buy it on the spot. This process should be seamless in order to convert as many people as possible. Shoppable video offers opportunities to significantly increase your reach and make the conversion process as easy as possible.
Consumers are scattered all over the internet — they use different platforms and access them from a range of devices. This diversity makes it difficult to reach potential customers and convert them into buyers, because every channel requires platform-specific shops and touchpoints. It is easier for retailers or brands to get their shop in front of potential customers’ eyes, as opposed to pulling customers into their shop. Although people spend more than two hours per day on social media on average, and customers can be reeled in with socially-integrated product tags and hyperlinks, it’s faster and more convenient to allow them to shop via the social platform itself (e.g. purchasing items via Facebook Messenger).
Interactivity helps break down consumers’ resistance to purchase. Features such as chats, votes, and ratings enable people to co-create content and enhance their own experience. Interactivity encourages consumers to lean in and shift out of their passive consumption mode.
By creating a path to purchase from the moment someone views a piece of content, the conversion process can be shorter than it is with regular online shopping. In the past, when a video or post on social media piqued your curiosity, you had to identify the product and go hunting for it on the internet. Every extra step or click in the conversion process causes people to tap out, but when content is made to be shoppable, these steps can be eliminated. Both the consumer and the retailer benefit in this case: in our fast-paced world, the consumer does not have to put time or energy into browsing for the right product, while a shorter sales funnel can increase conversion.
Retailers should be aware that consumer dynamics can change as a result of the shorter and quicker conversion process. In a seamlessly connected shopping process, all of the steps in the funnel should complement each other without being repetitive. In each phase of the process, consumers expect and require different information to make their decisions. Only showing a few images of a product is not sufficient anymore: consumers prefer more in-depth and peer-driven content (i.e. review video’s).
Strong commercial proposition
For a video to be commercially relevant, it needs a strong selling proposition that suits the content. It should be commercial without being too salesy; consumers should not get the feeling that they are part of an infomercial. The proposition should therefore be unique, relevant, urgent, and exciting. For more tips on how to shape strong commercial propositions, keep an eye on this blog series.
Selling propositions can be strengthened with appealing offers, aggressive deals, limited editions, huge discounts, and interactive concepts like self-destructing coupons. These methods put more emphasis on urgency, which works especially well in combination with live video. Moreover, live video increases the ‘Know-Like-Trust’ factor, creating a feeling of authenticity. The majority of buyers claim to feel a greater level of trust after having seen a product video.
This was only the beginning — a first glance at the new era of eCommerce, and the integral role that shoppable video plays in its transformation. Stay tuned for upcoming posts in this series, in which we will take a closer look at industry best practices and put our newfound knowledge into action. Or contact me to learn more.
If you want to start with shoppable video, let us help you. At Ex Machina Group, we provide everything you need, including concept creation, business modelling, front end design, back-end development, and operations. Check out our website to get inspired by our portfolio and client list. Or contact me directly on LinkedIn.
The first in a series of blog posts in which we outline the advantages of shoppable video and what it can do for your business. This article was co-authored by Ruben Rouwhof.
