As E-Commerce Growth Flatlines, Video Differentiates

E-commerce is hitting a wall. The growth in e-commerce is slowing, and it’s slowing fast (yes, that is a pun). From 2008 to 2013, the rate of e-commerce growth is projected to slow from 13% to 8%. Now, please don’t think me a Chicken Little. I’m not sounding a death knell. Obviously, growth is still growth.

But, if you work in the e-commerce sector, you are in for a bumpy ride. Until recently, the sector has seen 20%+ growth rates for years, which has made most e-tailer’s jobs pretty easy. The criteria has been pretty simple: have compelling product; have a trustworthy website;  offer good deals and service. Pretty simple formula for 20%+ growth.

But, Americans’ buying habits have largely shifted, and the incremental shifts that are still to come reflect the fact that the halcyon days are behind us. From now on, e-commerce teams will have to eke out gains just like everyone else.

There are also a number of headwinds facing e-commerce retailers:

  • Paid search competition continues to grow: As marketing budgets move out of traditional media into online, there are more competitors bidding on your keywords. That increases your cost for visitors. Even if you maintain conversion rates, that’s still an increase in the cost per sale.
  • More and more competition is coming from other e-tailers: With the cost of starting cloud-based services, it’s easier than ever to get a store up and running. And more firms are looking for markets to disintermediate. More chances to try someone else means more chances for you to lose the sale.
  • Additional competition is coming directly from your suppliers: Brands are taking their messaging directly to customers. But, increasingly, they can also complete fulfillment and retailing as well as any other partner. Apple has a strong history of this, and other technology outfits, like Dell and Microsoft, are following suit. With just a little bit of lean fulfillment in place, they can keep the retail margin for themselves. Don’t think they won’t try.
  • Social is throwing everything up in the air – again: Just when you thought you could relax, social media jumps into the fray, mashing up and mucking about your customer data. The challenge in this is that just as buying preferences were starting to settle in for consumers, they will have the ability to revisit every decision about where and what to buy, based on tons of unsolicited feedback from their friends

Fortunately, there are some emerging ways to continue to differentiate yourself as an e-commerce provider. More and more, the focus will be on creating personal, relevant experiences. That means using the social graph to influence shopping. It also means narrowing your niche and speaking just to your core audience. If others happen to stop by, that’s fine. But, the core experience must stay targeted.

At the recent Video Commerce Summit, organized by Liveclicker, a number of practitioners discussed how they are solving these challenges using video.

Historically, there are lots of challenges with video online, including technical hurdles for encoding and decoding, bandwidth and compression quality issues, value-add considerations. But, necessity is the mother of invention, and e-tailers need a way to keep raking up big gains. It’s clear that the hurdles are getting more manageable all the time (thanks, HTML5, and video handlers like Liveclicker themselves).

It’s also clear that e-tailers are increasingly looking to video to solve a number of the challenges outlined above.

  • Video personalizes the shopping experience: Hosts show off new products. Users “like me” give a personal touch. And video solidifies brand identity in a way that a static site just can’t. Emery Skolfield from HSN had some great case studies of this.
  • Video socializes shopping: Mall hauling (individual users showing off purchases on YouTube) is an extremely social experience. Jordan Blum from is working with vloggers to create makeup how-to videos from rising talent that makes every experience social in order to build their personal brands.  And overlaying social “like me” data with video reviews is also an effective way to target relevant information to specific users.
  • Video builds new habits: BJ Fogg talked about using different types of video to target first time visitors, and direct them to return regularly, and eventually to make a site visit part of their daily routine. One of his experiments showed that a personal video increased response rate from 0% to 47% – the immediate nature and personal message of video transcended the inertia of the user to click away to the next experience. He has some great resources at
  • For now, video is a differentiator: E-tailers are pushing forward with video content, and learning a lot. Deborah Lewis from shared their process of creating over 10,000 videos in just two months. Jimmy Healey from is creating 40 videos per day. Video helps give a quasi-tactile experience to websites that improves the experience for some customers. And e-commerce is moving rapidly.

In fact, Alex Vieux from SundaySky sees video as the inevitable next step in e-tailing: “Video will be completely commoditized in e-commerce, and users will not be comfortable buying online without a product video. Think about it: would you trust a website now that didn’t have a picture of the product? It will be the same with video in the next several years.”

As competitors look to differentiate in the space, video will be an important component for some time. And by starting now, organizations will be able to build important experience and learnings into their business moving forward. So, what are you waiting for?

(And, in the spirit of using video, here are a couple of clips related to this post)

Mall hauling example:

ReelSEO summit coverage with BJ Fogg:

2 Replies to “As E-Commerce Growth Flatlines, Video Differentiates”

  1. Great post Jamie!

    Indeed, although we're seeing the beginnings of a change video is still, to a large extent, an open frontier for ecommerce websites to explore & benefit from. One of the major benefits we're seeing for our ( customers, beyond the mere enrichment of the pages & the ability to syndicate content to the hugely popular video sharing sites, is the additional stream of actionable data that video provides: Comparing engagement patterns & conversion rates between a few videos generated for the same product provides valuable insights that can be monetized easily.
    We've recently published a case study on our blog where we examined the data from all our fashion industry clients for Q1 2010 & were able to prove that video can be attributed to a 134% increase in CVR on average across the vertical!

    Check out our blog for more information on ecommerce videos best practices & tips.


  2. you have write a great postConsumers’ resolve to recover wealth lost during the current recession represents the single greatest threat to U.S. e-commerce, according to comScore Chairman Gian Fulgoni.Thanks for sharing the nice information.

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