'Net Features : forrester consulting

Videos Impact Conversions, Revenue

Amberly Dressler — Tue, 04 Dec 2012 15:08:00 GMT

On-site videos deliver brand awareness and engagement, but what is most appealing to companies is the performance and financial impact videos are generating, specifically conversions and revenue.

That’s according to SundaySky, the creator of SmartVideo (a personalized, real-time video experience). The company recently published its 2012 State of Online Video report, which captures and analyzes the current trends in online video including consumption, personalization, advertising, retail, mobile and 2013 predictions.

Highlights of the report include:

• Personally relevant video: While the average email click-through rate is 5.4 percent, Forrester confirms email with video increases this rate 11-16 percent

• Video advertising market growth: Forrester predicts the online video spend will grow 26 percent each year

• Mobile video: 33 percent of marketers could use mobile video to replace the traditional 30-second spot

• Online retail: The number of online retailers that feature videos on their websites is up 200 percent from last year

Also interesting to note, is video’s impact on email. The report indicates that the average text email open rate is 11 to 22 percent, but when you add ‘video’ to the subject line of marketing-related emails, open rates rise up to 30 percent.

SundaySky data also reveals that when customer emails contain video content that is personally relevant to the recipient, such as a bill, statement or account status - open rates jump to 40-60 percent. Furthermore, the click-to-play rate for personalized video ranges from 80 to 99 percent.

Personalized content clearly goes a long way in driving deeper levels of customer engagement.

“We all, as consumers, want to be treated like individuals more and more,” said Sears CTO Dr. Phil Shelley. “We want to personalize engagement, including real-time offers and rewards.”

In addition to using SundaySky’s Smart Video product for showcasing products, Sears also leverages a big data program to drive customer loyalty.

Other retailers have also seen video’s impact on their bottom line. In fact, 48 of the top 50 online retailers feature videos on their website. This is a 200 percent increase from 2011. Higher conversion rates are likely the reason.

“Five percent of consumers who get to the configuration stage and view one of these videos makes a purchase, tripling the conversion rate from before we implemented,” said Lewis Broadnax, Executive Director, Web Sales & Marketing, Lenovo.

Looking forward to 2013, SundaySky predicts the C-suite enhancing customer experience and engagement strategies with smarter applications of videos. Naturally, the company also anticipates the continued rapid growth of digital and mobile video consumption and ad views.

The Hidden Costs of E-Commerce Platforms

Allison Howen — Mon, 26 Nov 2012 21:30:00 GMT

An online store can only be as successful as the e-commerce platform that is running it, which is why it is vital for merchants to map out their business’s needs, goals and budget before they make a commitment to a solution.

But despite this preparation, a new Demandware study reveals that 43 percent of all e-commerce platforms end up having a higher total cost of ownership (TCO) than predicted. In fact, the “Understanding TCO When Evaluating E-Commerce Solutions” study, which was conducted by Forrester Consulting, found that online retailers spend an average of 7 percent of their total online revenue to support their e-commerce platforms, however, 74 percent of merchants don’t believe that their current solutions will scale to support their planned growth.

Hidden Costs and Limitations

Merchants using homegrown or a licensed on-premise e-commerce platform may end up paying a higher TCO because they usually need to purchase additional licenses to grow their business. For example, 67 percent of retailers using a licensed on-premise solution report that they are contractually obligated to acquire additional licenses when reaching a certain threshold of online traffic, while 78 percent of online retailers report that their vendor contract restricts them from using the technology into new markets. This means that many e-commerce platforms are restricting online stores' growth initiatives, such as international and multichannel expansion.

Not only is the TCO for many e-commerce platforms higher than expected, but one of the study's most surprising metrics reveals that due to the complexities associated with upgrading an e-commerce platform, 39 percent of retailers only upgrade their platform to the latest version once every two to three years. This could be attributed to the long amount of time that it typically takes to complete an upgrade, but regardless, it means that these retailers risk falling behind their competitors by not staying up-to-date with basic functionality and usability features.

The Cloud is Gaining Trust

The complexities and lack of support of current e-commerce platforms has led 25 percent of retailers to plan on re-platformming within the next two years, and a further 29 percent will re-platform within four years. According to the report, these merchants will seek a platform that supports their business’s multichannel and global expansion goals, as well as one that caters to digitally connected consumers. Although 81 percent of online retailers currently use a homegrown or licensed on-premise e-commerce solution, some retailers are looking to the cloud for better performance despite the uncertainties that still surround cloud-based solutions.

“In the first generation of e-commerce, when CIOs had to build everything from scratch, retailers took on major new costs to develop and operate platforms, which over time became assumed – and sometimes forgotten – in the P&L (profits and loss),” said Jamus Driscoll, senior VP of marketing for Demandware. “We believe the study clearly shows that as retailers move forward into a new digital world, they also need to pause and challenge yesterday’s assumptions regarding the costs of ecommerce. It’s time to think differently.”

Cloud-based platforms can be beneficial because they tend to offer upgrades that are easy to implement and also don’t restrain growth possibilities. While 44 percent of the survey respondents state that they still perceive cloud-based solutions as lacking maturity, 41 percent are also now including cloud solutions in their selection process.

Regardless of a merchant's preference for cloud or homegrown solutions, they should remember that selecting an e-commerce platform is a long-term decision. This means that they need to take hidden costs, features and functionality into consideration when researching solutions. And most importantly, merchants should choose a platform that has the ability to grow with their online business.

Consumers Love Coupons, Merchants Reap Benefits

Allison Howen — Wed, 05 Oct 2011 10:35:00 GMT

Merchants are reaping benefits from the online coupons that they are marketing, according to a recent study that was conducted by Forrester Consulting.

“The Impact of Online Coupons and Promotion Codes” study was commissioned by coupon and deal marketplace WhaleShark Media. The study establishes a direct correlation between online coupons and increased consumer spending, and reveals that online coupons and promotion codes drive new business to merchants, reinforce brand image and influence the purchase cycle.

Additionally, the study illustrates that customers who use coupon websites shop more online, and also spend more than the average online shopper. Active coupon users reportedly spend over $800 more per year with e-commerce merchants than less active coupon users, and are also 74 percent more likely to try a new brand after receiving a coupon or promotion code.

Online coupons are also reducing shopping cart abandonment, which improves conversion rates and reinforces a positive brand image. Eighty-eight percent of participants claim that promo codes “close the deal” in their purchasing decisions. Furthermore, 80 percent of respondents say that coupons and promotion codes improve a company’s brand image, with 88 percent saying that they have positive feelings toward companies that offer coupons.

And according to a separate study, merchants may want to provide location-based coupons to stay ahead of an emerging trend.

A study by Prosper Mobile Insights shows that 67 percent of consumers somewhat/strongly agreed that location-based coupons are very useful and convenient.

The study shows that most participants (51.1%) prefer their coupons via email, however more than a quarter (25.6%) would like to automatically receive coupons when they are near a store. Other ways consumers like to get their coupons include manual search (32.2%), QR codes (31.9%), text or instant message (31%) and check in through social media (10.3%).

And with only 18.1 percent of respondents claiming they didn’t want to receive coupons at all, it just goes to show merchants that coupons are big business and have the capability of bringing in big business too.

Image Credit: Coupon Audit