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What Shoppable Video Technology Means for Retail

What Shoppable Video Technology Means for Retail

Technology is rapidly moving forward, and technology for retail isn’t any different. Shoppable video may not be a new phenomenon, but companies are just starting to understand how to leverage it for effective conversions. This post provides a brief overview of shoppable video, how this retail technology is currently being utilized by major CPG brands, and a peek at what the future might hold.

What Is Shoppable Video?

This video format isn’t new. YouTube first rolled out “click-to-buy” tools as early as 2009. One of the first shoppable videos for retail was a music video developed to merge art and commerce by retailer SSENSE, and featuring Diplo, FKi, and Iggy Azalea. Shoppable video allows the user to explore fashion products featured in videos and make a purchase without having to navigate to a retailer’s website on their own. For SSENSE, an overlay provided clickable spots on the video synced to performers. “S” tags indicated looks users might be interested in, and when clicked, displayed the pertinent products, which then linked to product pages. Fashion brands have also been critical to pushing it forward: Ted Baker, in particular, sees the impact this format can and should have, and is heavily investing in shoppable video as a strategy.

Benefits and Challenges

The major benefit to this format is the retailer’s ability to reach the shopper early in their decision process while shortening the path to conversion and purchase, and it capitalizes on interest with immediacy. Whether the video is a brand story that’s full of emotion or a promotion for a new product line, viewers can immediately click on pertinent pieces of the video to learn more about products and make a purchase. In more advanced platforms, the path to purchase is frictionless because it can take place directly from the view. The Ted Baker brand took user feedback to heart and minimized the distance and friction between seeing a product and purchasing it; when shoppable objects are clicked, they go straight to the user’s bag for check out.

Unfortunately, not all platforms are nearly so intuitive. Despite the rollout of Instagram’s shoppable images, which leverage similar tagging, the closest Facebook gets to shoppable videos is the Collection ad format. A video ad runs above a small selection of products, which can either be chosen manually by the advertiser or assigned by Facebook according to popularity from the advertiser’s site. Clicking through takes the user to a collection of as many as 50 products, which in turn will direct the user to the advertiser’s site or app for purchase.

One of the biggest drawbacks is just how interruptive the process can be to the viewing experience. Take the SSENSE music video as an example. While the tags themselves don’t detract much from the video, clicking on them stops the video and the song while displaying the products available for purchase. If the viewer is there to enjoy the music video, and shopping was a secondary bonus, the disruption might be more frustrating than helpful.

The other downside to shoppable videos is the current lack of meaningful statistics. Perhaps this is because “shoppable video” doesn’t actually mean one thing just yet, or perhaps it’s that shoppable campaigns are sporadic and various platforms and providers haven’t sorted out attribution. Also, there’s no meaningful integration into major OTT content. There’s a number of hurdles to overcome, and even those pushing the format like Ted Baker can’t provide real numbers to back the claim that shoppable videos have boosted sales. As cumbersome as Facebook’s Collection format is, at least it can cite that one large brand improved online sales by 28% while another reduced conversion cost by 1.8 times.

How Is It Being Used?

CPG retailers and manufacturers haven’t neglected shoppable mediums. Below are some major brands adopting shoppable video into their strategy and how it’s being utilized in the retail industry.

Missoni / Target

The retail powerhouse, Target, and its design partner, Missoni, were among the first adopters for shoppable videos. Preceding the SSENSE music video by a year, Missoni decided to humanize its brand to tell an amazing story first, and make it possible for the shopper to pick out what they loved from each “scene.” Unfortunately, the forward-thinking technology was overshadowed by the fashionable partnership.

Levi’s

Levi’s made a similar move as a part of its #LiveInLevis campaign in 2014. It wanted to focus on storytelling in order to fully connect itself with its fans by providing insight into how the brand was already an integral part of their lives. Clothing touted by fans in the video could be purchased in just a few clicks.

Mondelez / Oreo

More recently, Mondelez used shoppable video in 2015 as a key piece in its move toward direct-to-consumer engagement. Acknowledging that most of its sales take place in grocery stores or from retailers like Amazon, rather than selling directly to the shopper in the ads, it promotes “buy now” options so Oreos can be purchased online. Geotargeting ensured that viewers were served the best purchase options for their area.

Diageo / Amazon

As a world-leading retailer, it’s no surprise that Amazon would eventually elect to use shoppable videos. However, in an interesting twist, its effort won’t be available in the U.S., and it isn’t for its own products. Diageo, the trendy alcohol retailer, will use Prime Video to release an unscripted series featuring a bartender sampling drinks around the world. The videos will be embedded with links to Diageo products. (A non-shoppable version of the series will be viewable in the U.S..)

NYX Cosmetics

Purchased by L’Oreal in 2014, NYX has always been a digital-first brand that focuses in on its consumer experience. Recently it developed its own app, and by partnering with Texas-based OvenBits, it’s providing digital content that’s both incredibly helpful and shoppable. A shopper that’s watching a makeup tutorial to achieve a specific look can add products to their in-app cart directly from the video. The process is frictionless, and it allows the shopper to continue the video uninterrupted.

Where Is It Headed?

This particular retail technology is ripe for innovation, and while no platforms have announced the kind of innovation that will take shoppable video to the next level, we’ve got a couple of ideas for where it could be headed.

Personalized and Programmatic

Some predictions for the future of shoppable videos are bold, namely that even the content of videos can become programmatically generated. In addition to personalizing the delivery of a video, the shoppable products included in the video itself could be heavily personalized. This lends exponential power to the potential for conversion, especially once the tools are in place to adequately track interactions and fully take advantage of the data they can provide.

Bookmarking

Other predictions aren’t quite so bold, but provide tantalizing tool options. If next-generation bookmarking tools can be developed and seamlessly integrated with shoppable video, then viewers can save the shoppable products for later without halting the video they want to watch. Platforms like Pinterest have shown how powerful this kind of bookmarking can be to the consideration-conversion process.

Retail technology like shoppable video has the potential to make big changes in the ways that brands engage and capture attention. Already, the shoppable format allows retailers to capitalize on shopper intent immediately at the point of interest. Whether through hyper-personalization fueled by intuitive programmatic options, a seamless integration that promotes conversion without truly disrupting the viewing experience, or both, this type of video is sure to lift online sales and perhaps minimize the cost per conversion. Retailers and even CPG brands with direct-to-consumer plans should take a look at how to integrate this technology into their marketing strategy.