Topics Covered: July 25, 2022
- Video x Commerce
- 3 reasons why eCommerce is important
- Yumi (DTC) expands to Target
- Amazon buys One Medical
- Shipping study highlights progress needed
- Snap’s results highlight measurement challenges
- Twitter slows
- Video is mostly siloed from commerce today and, as a result, under-leveraged
- Scale is a core challenge as brands struggle to identify useful UGC content across multiple platforms
- Personalized, easily usable video that is integrated into commerce is the future
- YouTube/Shopify partnership helps reach that future by shortening the journey from discovery to purchase
The intersection of video and commerce is accelerating:
- Youtube has 2 billion monthly logged in users
- The fastest growing ad unit on Amazon is its Sponsored Brand Video placement
- Gen Z and Millennials increasingly turn to Instagram and TikTok for discovery instead of Google
This past week, YouTube and Shopify announced a partnership that will enable brands, creators, and retailers with Shopify stores to sell their items directly from YouTube videos and livestreams.
It’s a combination between giants:
- Shopify is on pace to do $212 billion in GMV this year, up 700% from 2017.
- YouTube’s ad revenue reached $29 billion last year, almost doubling in just two years.
I reached out to my friend Ajay Bam, CEO and Co-Founder of Vyrill, to get his thoughts on the announcement and video more broadly.
- Ajay is a pioneer in making video-driven commerce a reality for brands and retailers. He’s been building in the video X commerce space since XXXX making him a resident expert.
- When I first met Ajay and learned about the powerful technology Vyrill was developing combined with the accelerating growth in UGC content, I wholeheartedly decided to invest in its seed round.
- Vyrill is particularly useful for brands and retailers that are under-leveraging UGC videos (i.e. everyone!).
Below is the interview on the Shopify/YouTube announcement and Ajay’s thoughts on where UGC video is headed (lightly edited for clarity).
(Russ) Why did this announcement stand out to you?
(Ajay) Video has become fundamental for pre-purchase shopping for GenZ and Millennial populations. These generations rely on user-generated, authentic video reviews, unboxing videos, how-to videos, etc.
Enabling direct Shopify integration on YouTube videos is a logical extension of shortening the journey between video and commerce.
How are Shopify sellers utilizing video today? What does that look like three years from now?
Merchants work with videos in silos. They promote brand and influencer videos on social, add videos on their product pages as a video carousel, and a few engage with shoppers for post-purchase videos. In-store shopping experiences, live commerce and online shopping remain disconnected with video experiences.
Over the next 3 years, we will see a cohesive, rich, end-to-end video shopping experience. Shoppers will begin their personalized video shopping journeys on social, gaming, eCommerce or in-store. This experience will be interactive and immersive (AR/VR) and include searchable video experiences guided by recommendations and personalization. One click shoppable videos will be integrated directly into order and shipping.
A purchase will be followed by outreach to capture shopper reviews, unboxing or how-to videos for insights, product ratings and content marketing.
What are some of the challenges brands have with creator-driven videos?
The goal is to improve conversion with useful video content, but there are several challenges brands face.
The sheer amount of UGC video content produced is massive technical challenge. Think about all the creator-driven content on 35+ platforms in 89 languages. Not to mention the need to rate, rank, and search video content to find brand safe videos.
Brands also struggle to with permission and licensing business models that are cost-effective and scalable to leverage useful UGC videos on their stores.
The Shopify/YouTube announcement is interesting because another challenge is that brands need integrations to e-commerce platforms to leverage and publish creator and brand video.
And finally, brands need 'In-video' search, personalization and recommendation tools to assist shoppers with instantly finding the answers they want about a product to make purchase decisions. Shoppers close to converting need to be able to answer specific questions about a product or brand without sitting through a 30-minute video, for example.
There’s a big goal out there to enable “shopping” in digital mediums, rather than just a transactional experience – do livestreams or YouTube videos meet that bar?
Livestreams can help brands build trust with shoppers by answering questions in real time, offering 1-to-1 guidance on purchases, and meeting the people "behind the curtain" (brand teams, influencers and other shoppers).
YouTube videos, on the other hand, offer brand, influencer and authentic video content. However, finding the most relevant video is a hot mess as YouTube does not offer tools to rank and rate video content by product, nor does it offer 'In-video' search and direct shopping links to stores.
It’s a few hops and few searches type experience, which we know kills conversion. Plus, YouTube recommendations are mostly driven by the advertising model, which is not the most effective shopper video experience.
So there’s a lot of progress that still needs to be made but brands that can move first and really innovate in this space have a shot at standing out.
Walmart and Amazon are two retail giants trying to make livestream work for them – what do you think they need to do today?
Amazon has launched a new store where shoppers can watch videos and buy products. Amazon has amassed over 250M+ video reviews, unboxing and how-to videos on its platform and has now introduced livestreams on product pages by product category.
Similarly, Walmart has been testing live commerce at Walmartshoplive.com.
There are quite a few challenges though in the U.S with livestreaming.
- Live shopping needs to be better integrated into the overall eCommerce shopping experiences on the sites at the moment of purchase.
- Live shopping channel awareness continues to be a challenge.
- Getting audiences to show up at a particular time and date to a live broadcast continues to be a challenge.
- Additionally, livestreaming competes with very mature home shopping networks in US.
- How to repurpose a livestream event remains a challenge as videos tend to be long and shoppers will not watch videos longer than 3 mins.
It’s early days here and both Amazon and Walmart will be working on making the most of video over the next several years.
How are brands maximizing livestreaming assets?
Livestreaming is still an evolving channel. These videos generally tend to be long format, typically running 30 to 60 mins long.
Post live-streaming, brands and retailers can repurpose the video in the format of short Q&A clips on FAQ pages, offer videos in their online shopping experience with 'In-video' search to assist finding answers inside the live streamed video, and post video bites on social.
What are you seeing new on Amazon as it relates to UGC video?
Amazon has a UGC toolbar on product detail pages that it’s been making more prominent on PDPs over the last couple of years.
For example, Huggies Brand wipes shows uploaded videos for the product and then related product. The reviews vary in quality and are not always positive. But they do serve to complement the text and image reviews and star ratings that we’ve come to trust on the platform.
Where can we learn more about Vyrill?
Head to Vyrill.com or email me directly at Ajay@vyrill.com. We work directly with eCommerce, content marketing and social media insights teams inside consumer brands that have a lot of UGC content. We help them make it a sales-driving asset, particularly for those running on Shopify with our new “In-Video” search app.
More from Stratably: 3 Reasons Why eCommerce is Important
Every eCommerce leader has had to answer the question, “Why should we invest behind digital commerce?”.
Two replies are common and effective – let’s look at the growth of eCommerce as a piece of the total retail pie and/or consider the influence that digital channels have on our total sales.
A less common answer is to think about digital commerce as a competitive differentiator. For brands with huge business in stores, it brings new challenges, metrics, and ways of working. These challenges are difficult to meet, creating the conditions to stand out. (Read Here)
For the Nerds
DTC brand Yumi expands to Target: Yumi has raised $88 million in funding over the last three years to support its rapid DTC-powered growth. It announced plans to expand to Target stores nationwide, the latest DTC brand to be brought in after major success. This deal stands out as so many are now talking about how DTC is dead, and brands should shift to wholesale and marketplace models that enable better profitability. But getting meaningful wholesale distribution is reserved for the largest DTC brands (like Yumi) and marketplaces require a whole different set of people, technology, and even mindset around building a brand in a constrained environment. While diversification is the right strategic move after initial success, the challenge is immense. (link)
Amazon buys One Medical: Amazon’s spending $3.9 billion to buy One Medical, a network of 180 healthcare facilities in 25 markets that services 8,000 companies and has over 760k members (+28% Y/Y member growth in 1Q). Healthcare is massive ($4 trillion market) and byzantine, providing Amazon (and Big Tech) an at-scale opportunity to combine its built in customer base and brand loyalty with its user experience and technological expertise. Amazon also now strengthens its Healthcare B2B efforts, that go along with B2B initiatives like AWS, Advertising, and emerging store technology licensing. (WSJ link) (press release)
Source: The State of Shipping Report, 2022. X Delivery and Santa Clara University Retail Management Institute.
Study on shipping: This report on shipping has useful benchmark and consumer stats:
- Under Armor, DSW, Nike, Sketchers and more are all using free shipping as a carrot to entice registering for an account, joining a loyalty program or applying for a credit card. (pgs 4-5)
- I’m continually surprised at the number of Walmart+ memberships estimated in consumer studies. This one suggests 28% of households that shop online monthly compared to 55% for Amazon Prime members. (pg. 6)
- 82% of the top 100 fashion and apparel brands/retailers ship within a 5-8 day window. This compares to just 10% of consumers that find that amount of time acceptable. (pg. 9) (link)
It’s consensus thinking that 2-day shipping is the maximum amount of time a consumer is willing to wait. But it remains terribly difficult for shippers to reach this, helping shed light on Shopify’s Deliverr acquisition and Amazon’s ambitions with its warehouse network. This report is a good resource if you’re working on projects related to shipping speed to the end consumer.
Snap facing core challenges: Snap’s results were worse than feared and the company seeing a more notable slowdown in just the last 90 days, leading it to slow hiring, reprioritize initiatives, and look to generate positive cash flow.
The company summarized its challenges well in a letter to investors, stating “Platform policy changes have upended more than a decade of advertising industry standards, and macroeconomic challenges have disrupted many of the industry segments that have been most critical to the growing demand for our advertising solutions. We are also seeing increasing competition for advertising dollars that are now growing more slowly. Our revenue growth has substantially slowed, and we are evolving our business and strategy to adapt. We are working to reaccelerate growth and take share, but we believe it will likely take some time before we see significant improvements.”
The results are a bad read for the digital advertising market, but TikTok is likely taking some of Snap’s dollars and retail media, with its lack of measurement problems, should be a multi-year share gainer. (link)
Twitter revenue declines: Twitter’s revenue declined 1% on a Y/Y basis with the company citing macroeconomic pressure and “uncertainty” related to the acquisition process with Elon Musk. While the results suggest weakening demand from advertisers, Twitter did not provide much context on the ad market generally and did not share its financial outlook given the litigation with Musk. (link)