February 1, 2013
By Judith Aquino,

Product Placement Goes Interactive

Target released a 12-minute online film called Falling for You, starring actors Kristen Bell, Zachary Abel, and Nia Long. While watching the video, which was broken up into three segments, viewers could add the actors' outfits and other merchandise shown in the film to their own shopping lists by clicking on the items as they appeared in a sidebar to the right of the screen. Once the film was over, consumers could review their shopping lists and complete their purchases by clicking on the "shop it" button.

Analysts and retailers are heralding such shoppable videos as the future of online videos. "Eventually we'll start to see shoppable videos for everything," predicts Mike Gatti, senior vice president at the National Retail Federation. "These videos are definitely a trend, and they're evolving quickly."

Product placements have held a long-running role on television shows and movies, so online videos were a natural progression. Adding technology that shortens the distance between seeing an item on a screen and purchasing it makes sense, says Paula Rosenblum, a Retail Systems Research analyst. "So many television shows and videos are just enormous product placement commercials," Rosenblum observes. "I see [purchasing technology] coming on strong in video, on TV, and pretty much anywhere we can see something and click on it."

Companies are still experimenting with the shopping experience that they provide on videos. Google recently released a beta feature on YouTube that lets brands embed links to items in a video. Juicy Couture used the feature to create a video starring supermodel Candice Swanepoel. As Swanepoel makes her way through the video's dream sequence, a silhouetted outline of a box appears on Juicy merchandise. When viewers click on the box, the video pauses and they are taken to a separate Web page where they can purchase the item.

Taking consumers away from the video is risky, according to Gatti. "If you're really interested in a product, it's probably not a problem that your experience was interrupted," he notes. "But will you be interested often enough to stop the program and do some shopping? That's something vendors have to figure out."

The shopping experience should be as unobtrusive as possible, adds Rosenblum, who says she "would prefer to have the ability to click on the item and have the pop-up happen then, without having to leave the page."

Maintaining the storytelling component in videos is also important, observes Sam Sisakhti, founder of online clothing retailer UsTrendy.com. Sisakhti says he is interested in introducing shoppable videos to his customers, and would create lifestyle videos based around the activities of target shoppers. "If done correctly, placing ads or offering the ability to make purchases in an unobtrusive way…in video can be a new medium to reach your target consumers," he says.

As retailers experiment with shoppable videos and the technology continues to advance, the next step is finding ways to optimize its use. Personalized shoppable videos would make the medium even more powerful, notes Greg Girard, program director of merchandising, marketing strategies, and retail analytics at IDC Retail Insights.

"You might have specific information about a customer that you would want to use to personalize the videos. You might even use it to set specific prices," Girard says. "The greater potential value is using video in a one-to-one campaign. That's where the money is."