Facebook and Retailers

At the core of the question lies the purpose and motivation for consumers participating in a Facebook experience. Or is it? One school of thought would argue that in order for a retailer to maximize the potential for engaging an audience on Facebook, the communication/marketing used needs to align with the critical elements of the Facebook community: who, why, and what. Who is there? Why are they there? What do they do while they are there?

Following this approach, a retailer must first seek to understand the community, which in and of itself is as useless a statement as "seek to understand their consumer". Yes, it's a good idea. But a retailer doesn't have "a" consumer, and Facebook isn't "a" community. It's a very large portal with what are rapidly becoming as many splinter communities are there are in the general population. So talking about a monolithic "community" is silly, and self defeating. That helps, because it limits the retailer to "why" and "what". The "who" is now the same sets of "whom" the retailer tries to reach with any and all of it's normal marketing messages.

The critical component of retailer activity on Facebook revolves around content. Content is driven by "why" and "what", made specific and appropriate for the platform in question. And make no mistake. Facebook is a platform (at least for retailers). So it comes down to content. Retail Facebook pages are going to attract fans, be sticky, and act in accordance with marketing strategic efforts to the extent that the content supports those things. So understanding the "what" and "why" become very relevant. Approaching Facebook from any other point of view is almost arrogant. Given the vast numbers of people on Facebook, if someone creates something, creates awareness that it exists, then some appreciable level of exposure will occur.

Next post will take a look at what some retailers are doing in the content arena, and analyze how Facebook-appropriate those efforts appear to be.

Facebook and eCommerce

The sheer size and reach of Facebook, as a portal or opportunity to influence consumers, is almost overwhelmingly compelling to brands and retailers. In addition to the number of visitors, Facebook streams the second most amount of video content on the net, behind only YouTube. Time spent on the site, number of visits per unique individual.....these are all enticing stats. So, as would be expected, brands and retailers are flocking to Facebook. With the usual wide spectrum of results.

One of the most common metrics used in number of fans. Here are a few interesting numbers for leading retailers:
Walmart has over 850,000 fans. Target has over a million. Macy's slightly more than 400,000. J. C. Penney has 800,000. Victoria's Secret almost 3.2 million (might be something else at work there!). Yet the dominant demo is young adults and teens. PacSun has 260,000 fans, Hot Topic 260,000. Aeropostale has almost 600,000, while one of the hottest brick and mortar plays, Buckle has only 54,000.

Putting these numbers into perspective, Walmart averages over 50 million monthly unique visitors to it's ecommerce site, and Target isn't too far behind. Most of the other retailers mentioned are in the millions or tens of millions of monthly unique visitors. So the "fan penetration" rate against online visitors is relatively low.

Why? Are retailers doing Facebook right? What's missing? What's working?

More to come.

The Web's Influence on Brick and Mortar

An article todaly in eMarketer Daily, which quotes a survey from e-commerce solutions provider ATG and conducted by MarketTools, ads some additional emphasis to the behavior of online consumers with respect to shopping.

Put simply, no matter which channel the end purchase occurs in, an enormous percentage of consumers research the purchase first online. Other studies have shown that shopping research activity often starts on retail sites. Put these two facts together. Now step back and look at how, what and whom makes decisions regarding the retail ecommerce site with your organization. Is it a group of people who understand marketing? Communications? Influencing the purchase cycle? Or is it a group primarily focused on transactional analysis and incremental improvements within the mechanics of the site itself?

If consumers research products prior to buying (and they clearly do in very large numbers) and if they often start that search on retail websites (and they clearly do in very large numbers) THEN the very low net conversion rates for these sites indicate that amongst other variables, large number of consumers are not getting the information they need to feel comfortable completing a purchase.

Which calls into question what type of information is being provided, and the format the information is presented in. At the top of the hierarchy is video. This is the Internet. Outside of email, the number one activity online is video consumption. Period. Yet retail sites insist on communicating with their visitors through pictures and text. Video on retail sites can and should be used to actively influence the researching consumer, engaging and informing, while simultaneously giving them the opportunity to act on the impulse being created.

Think about it. Millions of visitors engaged in research. Most of them leave without buying. Some of that is inevitable. Very little of it, anymore, is because of security concerns. Most of it, now, is because there simply isn't the information they need presented in a way they want to consume it.

Enable video commerce.

A M commerce experience Retail could create NOW!

During my morning reading, I came across another article about "mobile marketing", this one in AdAge. As with many such articles, the technology and adoption rates for that technology are a number of years in the future, and the consumer behavior which supports the value proposition hasn't actually developed yet. Interesting, but not applicable today. Particularly for retailers, specifically multichannel retailers.

Surprisingly, I have come across a type of M Commerce which exists today, relies on hardware already well established in the market, and leverages consumer behavior which already exists. What if we were to look at the "m" in mcommerce and say that it stands for a mobile bridge between the offline and online world? What is it? Using 2D or QR codes to link online content to off-line shopping behavior. What does that look like?

It looks like a consumer standing in front of a washing machine and being able to access the consumer reviews (text and/or video) which already exists online for that item. It looks like a consumer standing in front a television set and being able to access the Flat Panel TV selection tool the company has for it's ecommerce site, or the video buying guide also accessible online. Or receiving coupons and marketing information driven by the consumer's loyalty card history...all of which are stored online. These aren't things that require innovations in technology or changes in consumer behavior.

Consumer behavior: right now, one of the most common actions for consumers online is to research products before making purchases. Using net-linked devices to do that research isn't limited to laptops and desktops. Recent studies show that smartphone users do exactly the same thing with theirs. They look for information prior to making a purchase. One of the most commonly accessed bits of information is customer reviews. Videos are being consumed on smartphones at staggering rates. So none of the behaviors noted above requires that the consumer do something new.

The hardware which makes this possible are smartphones.....which have a pretty solid user base already and are projected to grow at over 8X the growth rate of the overall mobile phone handset market. The software are 2D or QR codes. See 2DCodeMe.com for both an overview and free generator for these codes. Essentially, all the consumer needs is a smartphone and a 2D code reader app.....which are free and take about a minute to download. Once on the smartphone, the apps use the camera function as an advanced scanner which recognizes the data stored in the code and tells the smartphone what to do. Like open a url linked to a video providing information about choosing flat planel televisions.

This post was just to say "hey....there's a form of M commerce you could be doing NOW".... the next one will tell you how easy it is to actually do it.

Hurry Up and Wait

I recently presented a technology and service at an ecommerce retail tradeshow. The technology is undeniably best in class and the service is unique and uniquely designed for retail. These were the prevalent comments from a satisfyingly long list of retail executives. The pricing is attractive, the effort required is minimal, and the application to their brand was clear.

However, one of the largest cultural issues impacting retail raised it's not so pretty head. This product and service, which enable real video commerce, do not represent an improvement or extension of something most retailers are already doing. At the time, no one was "already doing it". As a result, this innovation, like so many others before it, started to be relegated to the stack of "interesting but not immediately relevant". Put in perspective, two years ago, intelligent product recommendations were treated in a similar way. Now there are five or six major providers of the service, virtually every major ecommerce retailer either has it, is working on it, or is in the process of upgrading what they started out with. But if you talk to the people who first brought the innovation out....well, it was the same thing. Nice, we're focused on other things right now.

Well, retail executives: someone else HAS done video commerce. And they've done it, on their own, at enormous expense, implemented almost exactly the way the Future Merchants service and technology were designed to do. Here's the link: Ralph Lauren Shoppable Fashion Show

So it's been done. And by a reputable company. With lots of money, and one that decided to go ahead and figure out how to enable video commerce without waiting for it to become mainstream. Are you ready to reprioritize now?

This isn't just about video commerce. Retail must find a way to embrace innovation. Otherwise the industry, by and large, will continue to be characterized by one of two traits. Either it's a "last adopter" of already proven technology or strategy, OR it's too early in the game, long before the technology or strategy has been developed or adapted for retail (think mobile commerce).

What's Behind These Numbers?

An article published today in Practical eCommerce raises some critical points regarding evaluating the effectiveness of video on eCommerce sites.

Practical eCommerce Video Metrics

The initial statistics show a high adoption rate by eCommerce sites, and relatively low click-through rate for the content. Not surprising. As a study completed by Future Merchants (click here for the study) found, the technology used, type of video programming, online location of the content and several other measures may provide insight into WHY those statistics are so non-compelling.

Video for eCommerce sites, if limited to product demos, is going to continue to represent a small improvement to overall site metrics. And in order to have even that small improvement be measurable at the top line level, those product demos have to be applied to a significant portion of the SKU base. Which at the moment remains a difficult proposition, and unjustified when the 80/20 rule of SKU contribution is taken into consideration.

Effectively implementing video within an eCommerce site represents a strategic undertaking that can have an enormously powerful benefit for both the eCommerce metrics and on a multi-channel basis. Or it can be a waste of time and resources.

Open for Innovation?

Innovation for the sake of doing something different is a waste of resources and capital...both financial and human. With one caveat: sometimes doing something different is part of a larger corporate culture initiative, and then often the point simply is to do the different thing, not to drive a specific response from it.

However, in most cases, retail is careful and cautious in assessing innovation. Too often, the "downside" is measured and the "upside" is discounted. What if it doesn't work? What if the provider goes out of business? What if status quo (as mediocre as it was) would have been better?

And these are as detrimental to a business as "let's do it"! without careful consideration and balance. The real goal is to have a process in place, complete with resources and attention, to test innovation and place the organization in a position to take advantage of that test.

Does your company test innovations? Take a look at the IT plan for the coming twelve months. How many elements are set aside for testing projects or concepts with scale and leverage potential?

Adding Video to Retail eCommerce Sites: What should be considered?

A recent report from Forrester Research shows that a staggering number of ecommerce sites intend to either re-platform completely, or relaunch in some distinct way. One of the most cited upgrades being planned for the site was "video". Unfortunately, that term, as a survey completed by Future Merchants indicated, is not well understood nor does it have a set ofwell understood best practices. Recent discussions with ecommerce executives show that some practices are emerging as most effective.

A major national department store chain uses video on brand landing pages. The video is essentially catwalk/fashion, shot without narration or guidance on the fashion being shown. However, the engagement rates are high enough that the test expanded from a single fashion brand to a handful. The type of video being shown does create an emotional connection with the brand. This represents the initial emerging practice. Use the medium of video to create emotional connections. Why? Because much shopping, and in particular fashion apparel, is an emotion-based "need".

The creation of emotional messaging in video content for retail sites represents an evolution in the use of the medium, particularly when the content was originally created FOR the site, and not simply repurposed from television commercials. As a few ecommerce executives told me at eTail West, "this really works"!

Future Merchants Presents an Innovation in Retail Marketing

Check out this SlideShare Presentation:

Future Merchants Presents an Innovation in Retail Marketing

View more presentations from dondelzell.

Mos Place Trust in Other Consumers

Just read an article on eMarketer about the information gathering and trust habits of moms online. Here's the abstract: http://www.emarketer.com/Article.aspx?R=1007509

What jumped out at me wasn't the raw data in the article. Essentially, 93% of the moms surveyed trust other consumers more than manufacturer descriptions. How sad is that? And where does the ultimate responsibility for that lie? Most of those descriptions are presented on ecommerce sites. Doesn't that make the ultimate responsibility the ecommerce retailer's? Sure, the information comes from the manufacturer, and there really is no way for a retailer to be a sufficiently informed expert to validate all product claims in description form. Still....why isn't this worth the time and effort by retailers to manage, police, and monitor?

The next set of numbers had to do with what influenced a purchase....these were online moms doing product research. The number one most influential medium: in-store display! Which only shows that moms that shop in-store start and do research online. Another huge number was that for Consumer Information Site or magazine....44% were influenced by this. A wonderful source of objective information designed to aid consumers in making more informed purchase decisions.....

Sadly, for the retailer, these sites are product and brand agnostic.....and are doing everything possible to enable the consumer to have enough information so that price becomes the dominant decision on where to shop.

As noted earlier, retail-centric video programming created to empower consumers to make better shopping decisions and presented ON THE RETAILER'S WEBSITE fulfill most of the purpose of these 3rd party information sites.....AND they support the retail brand, can be made instantly shop-able, and support the retailer's assortment.

Retail-Centric Programming - The Voice of Retail

Last week I raised the question of whether retailers have a valid "voice" with the consumer and what that might be. Of course, a valid "voice" is simply an appropriate brand positioning and aligned brand message. Today I'm thinking about how retailers can communicate that "voice".

Clearly there is no one single way to do it, and many are already well established. First and foremost, the execution of the customer facing store experience, from the training of the sales staff to the layout of the floor, and encompassing the pricing, merchandise mix and visual presentation are by FAR the most important. Also, the weekly circulars, television, radio and online advertising....all the elements of the traditional (now!) marketing mix are part of that. Corporate efforts on Twitter, Facebook, YouTube and blogs also contribute and count. Each of these, to some degree, are relatively well understood and utilized. If the medium does not consistently support a coherent "voice", well, that's probably an executional issue, not a lack of understanding.

However, the concept of creating retail-centric appropriate video programming delivered via the ecommerce site may not be so well understood, or strategically embraced. And the tragic aspect of this possible lack of understanding is that no other single strand in the marketing web has as much potential or strength in delivering that "voice" than retail-centric programming delivered via the ecommerce site. Here are the reasons, briefly.

1. The website attacts millions of unique visitors, all of whom are self targeted, opt-in consumers already in some stage of a buying cycle. No other medium delivers this quality of audience. Not even close.
2. Online content consumption habits have changed, and almost all demographics show rising use of online video for entertainment, information, and engagement. People like watching videos online, and they do it often. From home, work, and on their smartphones.
3. Consumers have demonstrated a consistent and sustained shift toward empowering themselves in order to stretch their dollar and get higher satisfaction from their purchases. Lacking that direction and empowerment from retailers, they seek 3rd party sites. The unique visitor growth and time-on-site for these sources is worthy of admiration.
4. Technology has advanced to the allow non-intrusive methods of displaying and making video programming accessible. All the arguments about interfering with navigation, impacting site abandonment.....no longer need to be valid.
5. The cost of producing high quality video programming has plummeted. While it's not free, it's well within the realm of the affordable.....particularly when evaluated on a cross-channel ROI basis.
6. Consumers start their research in large numbers ON the retail websites. They just don't complete it there.

Can Retailers Recapture Their Voice?

In a time long ago (before this writer was born), retailers had a distinct and recognizable "voice". For consumers of my parents' generation, retailers were a trusted resource for meeting the needs of both their daily life and their aspirational dreams. Even as a young boy, when my mother needed to buy a sewing machine to handle the growing volume of hemming, rehemming and altering required by two growing kids, she got in the car and drove to the store of choice. For my mother, that was Sears. Once there, she looked at the displays, asked a few questions of someone who inevitably didn't know anything of value, and then bought the sewing machine she could afford. It wasn't a tough decision....there was only one at the price point she thought appropriate. However, the lack of choice and the probable unreliability of the salesperson didn't bother her.....she was as Sears. And Sears stood for something in her mind.

Fast forward. The retail landscape became littered with more and more players, distinguished in fewer and fewer ways. Even with the growth and evolution of the megastores like Walmart and Target, there were still so many places and options! And the voice of the retailer had become overshadowed by the voices of consumer products companies. Marketing was ruled by the megabrands and their sophisticated approaches to "must have" purchase motivation. The retailer abdicated their "voice".

Today, brands have become less and less relevant. And the retail landscape is now littered with the empty shells of the over-store boom. Still, retailers, in general, have not recaptured their voice. Part of that is the clutter in marketing communication makes it almost impossible to be heard above the din of competing messages. However, a large part of it is simply that many retailers lost their own idea of what their voice was. What IS the source of your relevancy in the market? Are you simply the last man standing? Are you a player because you control geography? Is "category killer" really a "voice"? Those are questions for another day. Let's assume you DO have a voice and you know what to say with it. Where are you saying it, and what are you using to communicate it with?

Let's wake up and get with the times. The most common place for consumers to find information related to buying merchandise is on the Internet. Period. It's not over the back fence, or through TV commercials, or reading magazines or huge catalogs. It's the web. And strangely, retailers have an enormously powerful platform already on the web from which to create that "voice"..... their ecommerce site. We've talked before about leveraging the ecommerce site as a marketing delivery platform. This post combines that thought with the best medium in which to accomplish this objective.

If you accept that retailers may be in need of reestablishing or reinventing their "voice", isn't video the best medium to do that? Isn't a "voice" just a fancy term for a brand's unique set of emotional connections? And what is a better medium for making those emotional connections than video? All the reasons why TV commercials became the brand medium of choice apply to why online video should become this decade's medium of choice. This is a wake up call: retailers......use your website to reestablish a "voice", and use video to do it with!

Retail Marketers are not using their ecommerce sites fully!

This posting is NOT intended for the executives responsible for the operation and maintenance of the ecommerce site of a multi-channel retailer. It is NOT intended for the executives evaluated solely on producing online sales through the ecommerce site. It IS intended for executives responsible for the marketing budget of multi-channel retailers....particularly those held accountable for measurable impact on sales volume across all channels.

Getting acceptable ROI's from existing methods of driving volume for key items in the assortment is becoming more and more difficult. Every retailer I've worked for or with has had some level of awareness that circulars, inserts and direct mail ALL are diminishing in ROI....to one extent or another.

Here's an answer: use your website to MARKET to your target consumers, not just try to sell specific things to them. Your ecommerce people have done an amazing job of creating effective nav tools, easy to use search options, and are working on individualized product recommendations and display results. Yet.....a huge percentage of the visitors to your site leave without buying anything. Let's market to THOSE people. What are they looking for? Information is one of the top reasons consumers visit ecommerce sites and then leave...they look for it, fail to find it, and search elsewhere. And here's the kicker: once a consumer has become self-educated about the products they need to fulfill their needs.....it's all about price. Yuck.

The problem may not be in understanding that with millions of visitors to your site you have an opt-in audience that MUST be marketed to. The problem may be in HOW to market to that audience without impacting the main purpose of the site - transacting business. Well, maybe the answer is that the main purpose of the site SHOULDN'T be to simply transact online business. Rather, it should be to drive business across all channels. This opens up a lot more area for discussion.

Beyond that, there are technologies available today that make marketing messages deliverable to the consumer without impacting any of your existing nav patterns. Check out Future Merchant's RetailTV® technology.....it's an amazing platform designed to make delivery of the most powerful marketing media available (VIDEO), easy, seamless, and completely integrated. Worth looking into?

What Brand Followers Want from Social Media

Everyone, including Retailers, wants to find a way to use social media to "connect" with their consumer. Of course this is a euphemism for finding a way to sell them more stuff. There is, however, something wrong with that. Social media is not about "selling". It really is about connecting. And Retail brands truly do have legitimacy in connecting to consumers. Amongst others, letting consumers know what's new, what's different, what's unique.....and doing it an a way that's relevant to the consumer....that's a legitimate use of social media. And, if done properly, will help consumers make better shopping decisions.

A December 2009 survey by MarketingSherpa shows that in a virtual tie, "Learn about new products/services/features" was just as important as "Learn about specials, sales, etc". Yet a quick spot check of retail brand sites on social networking portals reveals a lot of the "specials and sales" stuff and not so much on the "new" front.

One critical area for opportunity is on Facebook. Facebook is now the number two video streamer in the world, behind only YouTube. What better way is there to communicate about what's new than via video? Yet it's not done. Why? Because retailers do not yet grasp that video programming is as relevant and important a part of the Shopping 2.0 paradigm as direct mail and newspaper inserts have been to Shopping 1.0. Ironically, the same MarketingSherpa survey shows that "Entertainment - funny or insightful" is the next most relevant reason to follow a brand.

What an amazingly powerful tool it would be to create a message delivery that combined "learn about what's new" with "entertainment - funny or insightful". To do this, retail brands need to look beyond their core competency and seek those who are creating businesses to meet this specific need. Such as Future Merchants, which with it's Solutions™ programming, has created a video programming model that accomplishes the objective of "learn" and "entertain" AND through the RetailTV® platform, has a technology which makes it possible to distribute these brand messages throughout the social media landscape WHILE making them immediately shoppable. Imagine that!

eTail West - A Must See Show

Retailers, both pure play and multi-channel, may wish to make the trip out to Palm Desert in February to attend eTail West. The agenda promises a series of presentations and discussions on topics all of us are interested in. In addition, with over 80 exhibitors, it's an opportunity to see what the newest technologies and services are. Look, the truth is the brick and mortar sales are flat, and online sales are generally the only bright spot. If that's true for you, then don't you need to stay on top of what may be out there to help you continue to grow? And if it's not true for you (and you know if your online comps are down), then don't you need to find out what's available to change that?

Using the retail ecommerce site as a marketing distribution platform

With millions of unique visitors, opting in to the experience, and actively engaged in a search of some kind.....doesn't it make sense for retail marketers to view their ecommerce site as a marketing platform? Not just a place to transact business online with consumers. A channel or platform for the distribution of marketing communications to consumers. And if that makes sense, what type of marketing communication should this platform distribute? Will it be as simple as repurposing content created for television or print? Or is there a unique type of retail-centric marketing media singularly designed and optimized for the ecommerce site?

Before these questions can be addressed, the initial objective is to alter the view within retail organizations as to value of their ecommerce sites. Yes, selling merchandise online is a vital and appropriate focus, particularly when brick & mortar growth is so hard to come by and online growth still seems achievable. And with that fact in mind, it's even harder to expect retailers to shift their perceptions about the value of the website to communicate with brick and mortar shoppers.

But stop and think for a moment. Despite all the gains in ecommerce traction, visit rate and conversion, for most sites, over 90% of all visitors leave without completing a transaction. Certainly much of this has to do with the nature of a shopping behavior cycle (from awareness through to purchase) requiring multiple exposures and current comparison shopping trends. However, retailer's own data indicates that well over half of their online visitors shop their stores. So if a given retailer has 10 million monthly uniques, and 50% of those shop their stores, that's a chance to influence 5 million monthly unique PERFECTLY TARGETED consumers.

Moving to the point of this post. Let's assume,for the moment, that using the ecommerce website as a uniquely powerful distribution platform has been adopted by the retailer's marketing braintrust. The next question is what type of content is appropriate for that platform? Because content MUST be produced specific to a platform. No one thinks that the audio track for a television commercial works as a radio spot. No one thinks that the text of a radio spot works as catalog copy. In fact, each traditional form of consumer communication is understood to require it's own unique approach to content. The same is absolutely true of content distributed through the ecommerce site. And not just "content distributed over the internet". That's a generalized as "all print copy is the same". It's not. The ecommerce site requires a very unique, very specialized approach to content development.

Future Merchants has a powerful point of view on this....please see the white paper at http://futuremerchants.com/news/White%20Paper_ETAIL_FINAL.pdf

The Retail Website as a Marketing Platform

Attention Retail Chief Marketing Officers: your single most effective marketing platform may not be TV, newsprint, radio or the Internet in general. It may be your website. The logic is simple. Virtually any visitor to your site is there by intention....interacting with your brand by choice. While this is true of anyone reading a direct mail piece or a newspaper insert, the effort required to actually be there is much greater for your website....and so is the corresponding consumer involvement. A bigger difference exists. When visiting your site, the consumer is engaged in the shopping process. We're not precisely sure where on the continuum between "interest" and "intent to buy" any one consumer is upon arrival, just that they are actively in some stage of that journey. The same is NOT true of the direct mail or newspaper insert, where the activity is "getting the mail". NOT shopping. Distinct advantage to the website as a marketing platform.

The website employs technology which enables you to deliver a multi-media message and experience. Again, this is true of television. The website has several advantages over television. First, the television audience you may be reaching is NOT composed of opt-in consumers perfectly targeted. There are a lot of useless eyeballs being paid for. Second, the activity the consumer is engaged in has nothing to do with shopping....it's being entertained. Third, the delivery of your message is actively avoided and resented by a majority of the viewers. Last, the willingness to interact with your message is limited to 15 - 30 seconds. Contrast these factors with your website. The consumer is perfectly targeted, having chosen your brand to engage with. The audience is not only "opt-in", it's activated. The messages begin delivered by your website are not resented, they are desired, and in fact, your inability to deliver guidance is a common resentment! Last, consumer viewing habits on the Web allow for message delivery in excess of THREE MINUTES.

Huge differences and advantages. Oh....there's one more.....you don't have to pay for the right to market to these consumers.....you already did that at some point in the past. So....the website AS A MARKETING PLATFORM is more powerful, better targeted, more flexible, and the audience is relatively free. Wow.

Video Programming Delivers Results for Retailers

Read an excellent summary of the conversion impact that video product demos have on sales for ecommerce. The stats show a low of 30% and a high of 100% increases in conversion rates. Still, these are solely for online volume, and only for product demo videos.

Product demo videos, we believe, should be viewed as a fundamental conversion aid, applied to as many items as possible in the online catalog. However, they are NOT a innovation in product or retail marketing. Instead, product demo videos are simply the next step in rich media imagery, and a necessary response to the evolution of technology and consumer expectations. Our belief is that video product "beauty shots" will just be a normal part of doing business.

However....using video ONLY to show product demo videos is like using a sophisticated laser to cut an finger nail. It uses only one tenth of the power of the medium, and vastly under-delivers against even existing models! Video is a multi-sensory delivery mechanism with an enormous advantage over any other method: it can be used to tell a story to a relatively passive audience. Text can tell stories....but the consumer has to work to find out what the story is about. And Text can't tell stories with the richness of video....at least without 300 pages!

What does this have to do with retail? Communicating that YOUR assortment meets the consumers needs is telling a story! If product demos are simply animated still photos, they don't tell stories. Where's the emotional connection? Where's the call to action? Where is the fundamental principle of marketing communication?

A retail-centric development model enabling powerful video programming content for multichannel retailers

In a survey of ecommerce use of video completed by Future Merchants, Inc., a key finding was the distinction between video programming and video technology. Clearly reflecting the issues of ownership, budget, and existing content availability, most survey respondents discussed “video” in terms of video technology. This is similar to discussing Sunday circular inserts in terms of printing technology, or newspaper distribution methods.

A video programming paradigm begins with the need to understand the nature of programming. Programming is a complex process of creating content designed to achieve specific objectives; one requiring that a wide array of variables be considered and aligned in support of those objectives.

Web 2.0 technology and the advent of inexpensive production methods and techniques are bringing the cost of high quality video programming down by significant amounts. Commercial quality programming, of 3 minutes or more in length, can be created and delivered for well below the six-digit budgets of the not-so-distant past. However, commercial quality retail-centric programming content development falls outside the critical skill domains most retailers have in-house.

Retail-centric programming will not be successful by trying to push specific products. Instead, recapturing the original basis for retail brand equity (trust), retail-centric programming requires a focus on the consumer. People buy products based on needs. Future Merchants has developed a unique process that systematically mines activity in Social Networks and the Blogosphere to identify common challenges associated with large groups of consumers. These challenges are then translated into programming topics consumers are verifiably interested in and require empowerment around.

The programming must encompass a complete solution to that consumer need, delivering both the information about how to resolve the need as well as specifically what to buy. The Solutions™ service created by Future Merchants leverages this insight to create content uniquely designed to sell merchandise. Now, more than ever, it is imperative that retail brands reestablish equity with the consumer based on demonstrable benefits……providing product solutions which make life easier.

Recent research shows that consumers are far more likely to trust programming featuring more than one product and brand than those featuring a single brand/product. Inherently, a single brand or product video is experienced as a form of advertising. As importantly to the retailer, the benefit of featuring multiple products or brands is that the emotional connection which is created reinforces the overall retail brand, not a specific supplier’s.

Comparatively, retail-centric programming, such as Solutions™, is to current ecommerce website hosted marketing what limited sku-count glossy seasonal direct mail catalogs were to newspaper inserts. The real change is created by developing programs that connect with common consumer needs; an emotional connection that not only drives sales for the products integrated into the programming, and also significantly enhances the retail brand connection.

Marketing NOT Selling

The world has shifted in the past several years, and if the old saying that there's a silver lining to every cloud has merit, then there are benefits to the retail community of this recession. One of them, I believe, is a reawakening of the need to "market" to consumers, not to "sell". What's the distinction?

"Selling" is a product focused approach to moving merchandise into the hands of consumers. Period. Without respect to actual needs, value, or usability. The intent and objective is simply to sell merchandise. Hard to fault that simple premise, as selling stuff is what retailers do. Or do they?

"Marketing" is a consumer focused approach to meeting the needs of shoppers through the benefits delivered by specific products. Is this semantics or is it a critical distinction? My company believes strongly that "marketing" is the real mission of retailers, not "selling", and that understanding the needs of consumers and then managing the assortment to meet those needs is Job One. Many merchants understand this both intellectually and instinctually. The problem is that the benefits of the products are not being "marketed" so that the consumer can identify with the needs they solve.

Online offers the greatest opportunity to actually market in the entire retail sphere. In store will always be limited by very short attention spans, destination shopping behavior, and a limited physical space for presentation, display and marketing. In store marketing is a challenge. It always will be. Online, however, has different characteristics which make it ideal for a more involved marketing strategy.

The industry might be well served to look at every available method for using the ecommerce site as a "marketing" platform first and foremost, and as a selling channel second. If the marketing is successful, the selling will follow! And if that effort is to be successful, an examination of the methods and tactics that will drive success is worth the time and effort.

Retail industry dynamics have produced an almost unprecedented level of inconsistency in the use, type, and accessibility of video on ecommerce sites. Apparently, the normal market forces of trial and error have not helped to guide an emerging consensus. Something is missing, and perhaps the answers lie in how “video” is perceived by the retail industry, and where within each organization the decision making concerning video seems to lie.

In the course of their survey, Future Merchants spoke directly with most of the Top 100 ecommerce retailers about the adoption and use of video. Without exception, those enquiries were routed to executives within the ecommerce organization. From that point onward, ownership of the topic of “video” began to vary significantly.

The results show that multi-channel retail organizations have difficulty identifying where the ownership of “video” should lie, with the exception of clearly believing it is an “ecommerce” issue. This fact provides extraordinary insight into the resources, types of content and tactics taken in implementing video. Tellingly, the cost-benefit calculation becomes limited to measurable impact on ecommerce volume, which represents a very small fraction of the total volume for almost all multi-channel retailers. This means that any expense, of any kind, will be analyzed solely on the lift generated in online volume. Ecommerce organizations are not typically evaluated or rewarded on the basis of in-store impact. Correspondingly, allocation of resources of all kinds will go to those initiatives that drive online volume first and foremost, despite conversion rates online in the single digits, and a growing awareness of the degree to which brick & mortar shoppers are exposed to and influenced by the website.

Second, there does not appear to be a department, organization or individual within these companies responsible for the creation of the video content. Lack of ownership within the ecommerce organization immediately begins to define how, where and to what extent the medium will be utilized. Most of the job titles found in the Future Merchants survey were either User Experience in nature, or ECom Technical. Even when a Marketing title was found, that individual operated within the constraints of ecommerce marketing, where Job 1 (and Job 2, 3, 4 and 100!) is the efficient use of limited marketing dollars to drive site traffic. So without dedicated internal organizational ownership, where is this video content going to come from?

This is an extraordinarily important point. Without direct ownership of content development, there is no budget established to fund the effort of creating content. The results are seen in the lack of sustainability alluded to earlier. When video programming is found on multi-channel sites, it is, with few exceptions, either repurposed content developed through corporate marketing (such as television commercials) to run on an entirely different platform (TV) or it is the result of one-off corporate marketing expenditures supporting specific events (exclusive brand launches, seasonal microsites, social media marketing, etc)….where the internal ROI has been measured by the impact on all channel volume! And moreover, the nature of where that programming comes from tends to mitigate toward branding connections, not toward driving sales behind specific products.

More insight into the issues and answers to retail websites and video programming will be delivered at the upcoming eTail West convention. Don Delzell, Managing Director of Future Merchants will be a Panelist on the Day Two Session: Driving Returns from Online Video With An Understanding of the Nuts and Bolts Behind Execution. Don will be offering a unique perspective on the issues behind the current industry experience with video.

Future Merchants has created RetailTV®, a revolutionary innovation combining over 50 years experience in retail merchandising, the art and science of master storytelling, and best in class technology to bring retail clients a powerful new method for driving cross-channel volume for key items.

Combining Solutions™ programming with the RetailTV® platform enables retailers to easily integrate powerful video storytelling anywhere on their website, while creating an interactive and seamlessly shoppable experience for their customers, driving sales on featured items across all channels.

The Future Merchants mission is to provide multi-channel retailers an affordable, high impact alternative to the declining effectiveness of traditional key item marketing techniques; an alternative that simultaneously engages the consumer, enhances the brand, and drives volume.