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How the Rise in Video is Driving Ecommerce

Linda Peters Tuesday, 05 February 2013.

How the Rise in Video is Driving Ecommerce

As the 2012 retail year ended, we noticed two major factors were driving an increase in online sales: mobile and the increasing use and influence of video. In fact, Ashley Schwartz, founder of digital advertising consultancy Furious Minds, told Beet.TV that video views of retail items are driving as much as 40 percent of site visitors to ecommerce sites.

Video is now one of the highest influencers in driving online sales, with brands and individuals globally launching their own video channels to speak on the latest must-have product and to educate their customers and partners.

In terms of luxury e-tail, video gives fashion shoppers a better experience. For instance, it's not easy to imagine still shots of a dress on a model, let alone on yourself. Movement provided by video makes the product come alive, with companies like ASOS mastering this early on. The UK's largest online-only fashion store, founded in 2000, integrates video catwalks on every item page, allowing you to view the product you wish to buy in action. Understanding the power of video, using it to engage buying customers and creating interactivity at the point of sale are arguably some of the reasons why the e-tailer has become so successful.

Beauty sites have also realised the power of video. In fact, online beauty demonstrations are one of the best uses of video, since application of the product is key to customer experience and satisfaction.  It’s fun and helpful to view a video on how to apply colour cosmetics or skincare, particularly when the typical customer has little experience in make-up application, styling, or how best to manage their beauty regime in an ever aesthetic-possessed world. According to Bing Chen, Head of YouTube's Partner Program, amateur 'beauty guru's' are now creating their own channels on the video sharing platform, creating sustainable businesses as a result. They are also being showered with beauty products from PRs, who are desperate to get a mention on videos that are engaging millions of beauty lovers globally. Michelle Phan is a great example, who began life on YouTube in 2007 at the tender age of 19 uploading tutorials teaching women how to buy and apply make-up. She was then able to profit from her videos, with YouTube making guru's like Michelle 'YouTube Partners' and approving them for monetisation based on the amount of viewers and subscribers they attract (in Michelle's case, she currently has almost 3 million subscribers). Monetisation involves allowing YouTube to display advertisements on and around the video using Google AdSense. Michelle and YouTube then share a portion of the revenue.

Here is a video of Michelle in action;

What makes the creation of video by individuals such as Michelle a powerful force in the market is the fact that conversion rates are substantially higher after consumers have watched her in action. Brands have now tapped into this trend, with make-up giant Lancôme taking on Michelle as their global ambassador to produce sponsored make-up videos for the brand. Typically cosmetic brands would have invested thousands into promotional video campaigns, hiring supermodels and production teams around the latest mascara or lip gloss. Although this still happens, it is equally effective to target a woman on YouTube with an active fan base and a decent digital camera.

Big brands are reevaluating their in-house strategy fast, and are attempting to leverage their own video proposition.  Here are a few examples in the beauty as well as fashion online arena to highlight how they are fairing...

ShopBop.com
Rather than utilising the YouTube platform, ShopBop.com has taken an innovative approach to featuring video at point of sale. Launching in 2000 as a small online boutique for hard-to-find denim lines, ShopBop.com has gone on to become a leading ecommerce fashion retailer, largely due to embedding rich media onto their product pages. By clicking on an item of clothing, customers are given the option to view the model twirling around on their browser, allowing consumers to truly see the dress/jacket/skirt they are lusting over in action. As a result of their clever use of video, BOP LLC was acquired by Amazon.com in 2006, allowing the brand to establish itself as a globally recognised fashion merchant. Click on the link here to be taken onto their site, where you can choose an item of clothing and sample the service for yourself.

Lisa Eldridge.com
Lisa is one of the industry’s most highly regarded make-up artists. She has worked with the world's most glamorous celebrities. Her work has graced the covers of international Vogue and she has collaborated with top fashion houses such as Chloe, Prada and PPQ on their advertising campaigns and fashion shows.

Lisa then became truly hands on by developing make-up and skincare products with both Shiseido and No.7. Lisa then started to dabble in the power of video, firstly with video tutorials recorded on CD's handed out at No.7 counters, to 10 minute beauty tip videos on the Channel 4 site when working on successful series 'Ten Years Younger.' Lisa then launched her own blog with expert make-up tutorials, which brought her to the attention of Creative Director of Chanel, Peter Philips. She now works with Peter on Chanel's 'Make-up Confidential,’ a monthly digital magazine for which Lisa creates content. You can see Lisa in action for the brand below.

These examples indicate the proliferation of video use and the resulting impact it has had on fashion and beauty e-commerce and social media sites.  Mobile and video are on the strategic agenda for leading companies in this space and it is those that are able to spot a digital trend and implement it fast that will win in the long run.

This article originally appeared in entrepreneurcountry Magazine

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Linda Peters

Linda Peters

Senior Advisor, Ariadne Capital - Luxury Retail, Fashion

Linda has a diverse background with experience in entrepreneurial ventures, corporate venturing with major global companies, and business model innovation that spans over 25 years, including over 12 years in the Luxury & Lifestyle industry sector. Her unique background combines luxury e-commerce expertise, along with experience in more traditional retail platforms for developing brands and luxury businesses. Linda has held leadership and operating roles in the industry as CEO, MD, and VP Global Strategy, Business Development and Strategic Marketing. Her experience includes: overall leadership and management of early and growth stage businesses with full P&L responsibility, strategy development, strategic marketing and operations management.

She has particular experience in developing and growing luxury fashion & beauty and lifestyle businesses. At Sephora.com (owned by LVMH), one of the top leaders in online luxury beauty retailing, she was responsible for global strategy, business development, and strategic marketing where she built strategic partnerships and led marketing initiatives that resulted in significant growth of the customer base and revenue. Recently, she was Interim MD for Cocosa.com, a UK flash-sales fashion business owned by Bauer Media, where under her leadership Cocosa achieved high growth and a platform for sustainable growth. She developed and was executing on a new lifestyle strategy including Travel and Beauty and International expansion. She was instrumental in the successful sale of Cocosa to Al Fayed Family Trusts completed in July 2011.

Upon moving to London from San Francisco in 2002, in collaboration with the University of Arts London, she co-founded the Centre for Fashion Enterprise, a successful and innovative venture programme for British Fashion start-up businesses. In 2006, she joined a UK/US based private equity advisory firm where she was the industry CEO for the Luxury Fashion & Beauty sector.

Prior to working in the luxury industry, she held senior/partner-level positions in prestigious US consulting firms including CSC Index based in Cambridge MA, and Strategos (under Gary Hamel's leadership) based in Silicon Valley, California. She consulted to corporations on strategy innovation, corporate venturing, and design of new operating models.

She has board-level experience as a Non-executive Director and Company Secretary. Educated in the US, Linda holds a Bachelors of Science degree in Computing Science with honours from the University of Evansville. Linda is a dual British and American citizen and resides in London.

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