CommerceVideos.com

Like many Americans, when it comes to possessing home improvement/repair acumen, my skills range somewhere between amoeba-brain and chimpanzee (much to my wife’s dismay, I might add).  Fortunately, some of the web’s leading home improvement retailers are on a mission to share knowledge with the throngs of folks out there like me who might know more about marketing or computer programming than kitchen remodeling or electrical repair.  How are they accomplishing such a noble mission?

With video, of course!

In this upcoming three-part blog series, we’ll examine how two large home improvement retailers (The Home Depot and Lowe’s) use video to educate shoppers about  common home repairs, then focus on how one smaller web upstart (Improvement Direct, IR #127) leverages video as a core component of their overall e-commerce strategy to  create an advantage versus their larger big-box rivals.  In typical CommerceVideos.com fashion, we’ll dole on the praise where it’s warranted, but also provide each retailer with areas of focus to bring their video commerce program to the next level.

The Home Depot

With $436 million in reported web sales for 2008, The Home Depot (#43 in the IR Top 500 List) is no wallflower in the world of online home improvement retailing.  Still, with Q2 2009 revenues alone totaling $19 billion (down 9% YoY), online revenues are little more than a drop in the bucket for this retailing giant of 2,240 stores.  Given this as a backdrop, it makes perfect sense for The Home Depot to leverage online video as a multi-channel tool as opposed to an online-only strategy.  In this regard, the company is doing several things well, but there’s still plenty of room for improvement.

First, The Good…

The Home Depot is well beyond the point of questioning the worthiness of online video.  I counted 418 videos on The Home Depot’s web site, mostly consisting of how-to content (262 videos), followed by product demos (118 videos), corporate workshops (30 videos), and “Home Depot News” (8 videos).

The focus on how-to video content makes sense for The Home Depot.  These videos can instill a sense of confidence in DIYers to prompt either a shopping trip online, or [more probably] at the local store.  Home repairs range from simple to nightmare-inducing, and with how-to-videos ranging between 19 seconds and 19 minutes, The Home Depot seems to understand that instead of asking, “What’s the right length for a how-to video?” the more important consideration is, “What’s the most effective way of communicating how to solve this particular problem using video?”  The videos take the time to set the stage for what can cause the need for home repair, suggest ways to prevent the repair from needing to happen, then explain how to complete the repair in a step-by-step, easy to follow fashion.  By blending the step-by-step guides with educational content, The Home Depot builds trust as an authority in home improvement and repair.

The Home Depot integrates a video call-to-action spawning how-to-videos in the “Know How” section of its site.

With regard to video product demos, The Home Depot appears to have taken a ‘partner-heavy’ approach with manufacturers, often featuring co-hosts, with the first host as a Home Depot employee (donning the recognizable Home Depot orange apron), and a manufacturer expert representative as co-host to explain the intricacies of the vendor’s product or product line.  The Home Depot is not unique in this regard; they’re just one of the many retailers we’ve covered on CommerceVideos.com that appear to be tapping into manufacturer’s willingness to produce or assist with video to help give life to a retail video initiative.  I’d be shocked if The Home Depot were not tapping new co-op dollars to help fund video.  The product demos are universally well-choreographed, but by catering to the wishes of so many manufacturers, The Home Depot does struggle to preserve a consistent look and feel across its product demo video library.  They seem to recognize this and work to maintain consistency through standard intros and branding elements such as the orange aprons, but at times it’s a stretch and somewhat jarring to the viewer.

Prominent Kohler branding and a co-host format showcase The Home Depot’s commitment to partnering with manufacturers in producing online video content.

The Home Depot also handles video syndication better than any other Top 100 retailer we’ve covered to date.  Not only do they offer a branded YouTube channel, but they’re also pushing videos out to other video syndication services like Yahoo Video, Viddler, Graspr, 5min, in.com, Howcast, MetaCafe, Vimeo, and others.  Video syndication can help with search results.  This could be one reason The Home Depot has pursued video syndication with such fervor.  Importantly, The Home Depot realizes the world of online video does not start and end with YouTube.  Their more sophisticated approach nets their videos higher results in organic search rankings.

The Home Depot syndicates its video content to many video services beyond YouTube

Specific searches for video content yield one of the benefits of video syndication – more videos in universal Google search results.

More generic searches yield The Home Depot with page 1 real estate on Google with strong video callouts using search terms that otherwise would have left the retailer with no presence in top organic rankings.

While it’s far from an ideal branding experience, The Home Depot has taken advantage of YouTube’s branded channel capabilities.  Additionally, and perhaps more importantly, they appear to be using the click-to-buy functionality for promoted videos, enabling text overlays to HomeDepot.com while the video plays while 3rd party advertisements are banned from the videos.

In summary, there are more than a few reasons to praise The Home Depot’s online video efforts:

1. The company understands online video plays a critical role in instilling confidence in DIYers, driving demand in both online and offline channels.  They’ve made a substantial commitment to video, with semi-professional to professional production of video content.  The Home Depot currently features over 400 videos.
2. The company is past the stage of asking questions such as, “How long should our videos be?” and instead is tailoring video content length for different product demo and how-to scenarios based on what’s most appropriate for the situation.
3. The company has partnered with manufacturers to boost its library of video content.  If The Home Depot is like other mass merchants deepening their commitment to video, they’re funding at least some of their video efforts by tapping into co-op dollars from key manufacturers.  Of special note, The Home Depot is not just pulling pre-packaged vendor content and re-purposing it for their site; they’re actually partnering with the vendor to create new, retailer-specific video content.
4. The company has invested in video syndication and distribution, enabling it to generate solid search results and a leg up in the SEO game.

Now, the Bad…

While The Home Depot’s commitment to video puts many retail video programs to shame purely on the basis of  commitment to video production, one powerful lesson to draw from the program to date is just how difficult it can be to create an integrated video commerce initiative.  Creating integration with video is easily one of the most challenging, yet highest value undertakings a retailer can embark on as it rolls out or expands its video commerce efforts. Still, given online video is so new for so many retailers, you may have not heard of an “integrated” approach to video (or video commerce) before.

Not to worry – lack of video integration is common among retailers.  More often than not, it’s the natural result of one department  ‘taking the reins’ with video early on and constructing a vision of video best suited to that department’s usage requirements or own particular aspirations.  For example, programs geared toward video SEO, email video, video advertising, video merchandising, video/social media, or video syndication would all be examples of usage-specific driven video.  Lack of integration often has less to do with the “focus” of the video program (e.g. entertainment, information/education, service, selling), but rather a video program’s inability to integrate across channels or showcase video in several contexts such that the entire retail business benefits.

Retailers that fail to build integrated video commerce programs also fail to extract the full value of video’s potential:

• Non-integrated video commerce programs fail to consider video’s impact on commerce, branding, and media, resulting in a skewed focus that tilts the retailer too far in one direction at the expense of another.  This “tilting” of the program can result in the following, secondary problems:
• Lowered e-commerce and offline revenues, lack of video reach, and inability of video to adequately support the brand – depending on the tilt of the program
• A litany of video platforms that don’t talk with one another and make sharing and re-use of video content difficult since the systems don’t meet each department’s unique requirements
• Interdepartmental warfare over the direction of online video, with branding, merchandising, and marketing often pitted against one another
• Lack of accountability and ability to measure the effectiveness of video
• The creation of additional, expensive silos of video production

In looking at The Home Depot’s video program, it’s clear they suffer from lack of integration with a definite skew toward media, secondary focus on branding, and tertiary focus on merchandising and e-commerce.  For example:

• None of the product video demos we searched for showed up on product pages.  This represents a major missed opportunity to drive conversion.
• The how-to-and product videos featured on HomeDepot.com aren’t linked to actual products
• There is no integration with site search results, category, or brand pages that we could find
• Opportunities for interactive video are missed, lowering engagement.
• Videos on-site are confined to the Know-How section
• Some syndicated videos lacked links to the e-commerce site where they could (including YouTube videos)
• There’s no in-email video integration with the email program we could find over the last several months
• Dearth of social networking options and consumer engagement

In Summary…

The Home Depot is far ahead of most multi-channel retailers with regard to video production.  While the company has jumped out to an early lead in online video, the approach has focused heavily on branding, media, education, and interactive marketing. Online commerce and merchandising have been neglected.  As a retailer, The Home Depot should be proud of its video SEO and syndication initiatives, but seek to more deeply integrate video across channels, and seek to augment its branding and educational videos with commerce opportunities and deeper integration with the e-commerce site.  Additionally, the company should consider upgrading or re-vamping its video browsing application with deeper social network integration and consumer involvement.

Next post –

Lowe’s.

Across the United States, retailers remain mired in one of the deepest recessions in the country’s history.  News last week revealed retail sales slumped for the 12th straight month, prompting additional concern about the upcoming 2009 holiday season.  Macy’s, for their part, saw an 8.1% decline in August same-store sales, and though the company beat analyst expectations in the second quarter, the holiday outlook for Macy’s and much of the retail industry still looks highly uncertain. It begs the question – how is a massive, 840-location retail powerhouse like Macy’s supposed to break out of the slump?

Innovation – that’s how.

In late August, Macy’s announced they were teaming with New York designer Rachel Roy for the launch of a new line called RACHEL Rachel Roy.  For those who have never heard of Rachel Roy, I’ll quote the LA Times: “Roy is a bona fide socialite who can flit easily between luxe and edgy. She was inducted into the Council of Fashion Designers of America two years ago and has seen her red-carpet-ready creations worn by First Lady Michelle Obama and Hollywood actresses Eva Mendes, Kate Hudson and Penelope Cruz.”  Sounds exactly like the kind of designer a stodgy retailer like Macy’s needs to break out of the mold – and hopefully out of declining sales territory.

Of course, it’s not all doom and gloom over at Macy’s.  Online sales remain a bright spot.  According to Internet Retailer’s Top 500 Guide, Macy’s online sales grew 28% in 2008.  With numbers like that, it’s no wonder the retailer is beefing up its online presence with a high-profile rollout of Roy’s latest collection.  And, unlike many apparel retailers, Macy’s understood the power of video in capturing the essence of fashion while developing innovative strategies for incorporating video despite high inventory turn.  The company made use of a professional set and video  production staff with the TalkMarket video production automation technology to optimize much of the planning, filming, and post-production work that too often scares retailers away from making meaningful investments in online video.

The videos are surprisingly simple.  There is no spoken audio. Videos are only 15 – 30 seconds in length. The model’s body language does the “talking” as several shots are blended together in a seamless sequence synced to edgy background music.  Sweet. Simple.  It works. Check out a couple of examples:

Of course, this wouldn’t be CommerceVideos.com without at least a few suggestions, which we’ll happily offer:

• The treatment on the product page isn’t ideal.  There is no “play” button, thumbnail, embedded player, or prominently placed button or link suggesting video.  The shopper has to dig through the “details” section to even to see a video is there.  Why go through the effort of producing video only to make it so hard to find?
• It looks like Macy’s is trying to incorporate some social elements into the videos, such as the “like” functionality featured just below the video player.  It’s a good first effort, but Macy’s isn’t really going to ’social-enable’ these videos until they enable consumer syndication to social networks, and push the videos out to video sharing services.  Note that Macy’s does feature a commercial on YouTube highlighting RACHEL Rachel Roy, but none of the actual product videos are there.  Not that I can really blame Macy’s, as the YouTube page hardly does its brand justice.  Like so many other retailers that are having their brands butchered on YouTube, Macy’s appears to have also fallen into the trap.  They’d be better off building a media destination like other retailers in other verticals have done to encourage this type of sharing (e.g. Home Depot TV, OnlineShoes.TV, even Ralph Lauren’s RL TV) if there is worry about losing people on the product pages.
• It would be interesting to see Macy’s explore adding some minimalist interactivity with the videos, such as JC Penney did with their Spring Runway Show. That would enable a shopper who’s interested in buying a dress to easily navigate to a product page featuring the earrings worn by the model in the video.

Macy’s YouTube channel: Nice videos.  Crappy presentation.

Based on the depth of Macy’s overall video library, it’s clear they’re still very early in the rollout of video, so we’ll spare them the usual grilling offered to merchants featured on CommerceVideos.com.  In all, Macy’s is doing a lot of things the right way that other large apparel retailers should take note of in growing a video commerce program:

1. They’ve figured out a way to maintain their brand integrity while automating some of the video production process (by using experienced staff in conjunction with some production automation techniques and technologies).  This helps to minimize the impact of inventory turn that other apparel retailers so often cite as a reason to steer away from video.
2. They’re using video in conjunction with a high profile product/line launch.  This decision will help maximize the impact of the video investment since the investment is paired with hot selling/high revenue, and presumably high profit margin products.
3. They’re keeping it simple.  Short video segments are stitched together to create a rich viewing experience.  A professional yet inelaborate set (at least in these videos) also helps.  A single model is featured across the line.  Scripting isn’t even a consideration.

Let me know your thoughts on the Macy’s video RACHEL Rachel Roy launch by commenting below and tweeting this post on Twitter.  Thanks!