Venture capitalists in Silicon Valley are waking up to their morning Soylent Green with the realisation that ecommerce could be video’s “Killer App”. With the boom in ecommerce in the age of COVID19, video is being redefined as a means to facilitate transactions, not just complement them. As VC firm A16Z notes, “not only could video apps become ecommerce apps, but all ecommerce apps may also have to become video apps.” But what does this mean in practice?
China, the birthplace of socialist capitalism, social credits and the world’s highest concentration of AI unicorns is reimagining the role of video in commerce. While social giants like Youtube, Facebook and Instagram build ecommerce features on existing architectures, super-app Douyin (the Chinese version of Tiktok) doubles as an ecommerce platform. In Australia, it’s not hard to imagine Tiktok as an ecommerce platform integrating shopping sites and payment gateways within the application.
Fuelling this change is a much broader trend in the commercialisation of the web. Driven by payment gateways plugging into the internet’s open source protocols, this enables new methods for monetising content with video at the core.
Video is more to ecommerce than pitching products like stockbrokers pitch midgets on Wall Street. Video now plays a critical role at each stage of the purchasing pipeline, influencing how we market, review, purchase and follow up with customers. Increasingly aware of this, online retailers and video apps are partnering with one another for “monetisation synergies”.
In parallel, coronavirus has accelerated the trajectory of online shopping as entertainment. Full of hangxiety after another night of solo drinking and reruns of ‘Friends’ in quarantine, ecommerce is a welcome retreat from reality. While we can’t walk through malls without contracting a fatal virus, we can browse insecurity-inducing images of influencers and buy products that absolve us of our self-loathing in a single click! Now, the dopamine hit of social media likes coincides with the rush of purchasing online.
We’re hurtling towards a frictionless shopping experience where customers don’t need to leave the social media site to buy products. Shopify’s role as an integrator in bridging the gap between content and consumption is becoming apparent, offering integrations with Instagram, Facebook and now Product Pins on Pinterest.
The commercialisation of social media demands a renewed approach to video content by the full supply chain. In order to remain competitive, brands need to provide less friction to the buyer experience, publishers need to redesign advertisements for conversions and production companies need to gain knowledge in how to produce high-performing content for the social platforms.
Case Study: Buzzfeed
Not only must production companies be versed in ecommerce in order to optimise the content and delivery of client work. The obliteration of marketing and advertising spend in 2020 means ecommerce is also a chance to diversify revenue streams; increasing the probability of survival.
Once just a digital media company, Buzzfeed has evolved into an organisation that evades conventional definitions. Horizontally integrated, Buzzfeed has diversified into news, entertainment and print publishing sourcing revenue from native ads, banner ads and affiliate links. Seeing an appetite for food articles, the publisher spun off the content into Tasty, a multi-faced company selling everything from seasoning to appliances.
Buzzfeed represents the evolution of digitally native businesses. Founder Jonah Peretti notes that the global pandemic has “accelerated the trend towards digital services and online marketplaces being how the market operates”. Facing Coronavirus, such a move is an effective means to insulate a company and hedge against risk.
How To Adapt
So what insights from organisations like Buzzfeed can be applied to Australian businesses? As a media organisation capitalising on ecommerce, Buzzfeed exhibited three key behaviours: radical open mindedness, decisiveness and massive real-time experimentation. To survive the current recession, these three ingredients are the secret sauce for any media business, production company or digital publisher.
Never allow a good crisis to go to waste. Times of crisis favour business that are fast to innovate, iterate and adapt. Whether it’s tailoring your video production services for ecommerce or diversifying with an online store, reimagining your business from the ground up (rather than tacking on new features for existing customers) can position you and your business for future success.
Businesses that survive this pandemic won’t resemble those when it began. With video evolving faster than a virulent strain of COVID19, ecommerce poses as the killer app for video. Production companies and media organisations, with expertise in the planning, creation and distribution of content) are uniquely positioned to capitalise on this trend.
This article was originally written and published via the Enamoured Iris blog.