For those of us that work in ecommerce it sometimes seems that every retail dollar spent in the US is being spent online.

That impression happens to be far removed from reality.

In fact, ecommerce spending only accounted for 6% of US retail sales in the third quarter of 2013.

We are twenty years into the age of Amazon and Americans still do 94% of their retail shopping offline.

That helps us understand why Jeff Bezos is focused more on cash flow than profitability: there is so much room left to grow, so much value left to create and to capture.

So why is ecommerce not growing any faster?

I believe it is because we still prefer to shop in person, and we prefer to shop in person for two principal reasons:

First, shopping online doesn’t provide us with an opportunity to interact with a product before making a purchase decision, and second, shopping is just as much about entertainment as it is about utility (convenience, value, and ease).

This especially applies to discretionary purchases like fashion, beauty, health and fitness, but it even applies to the purchase of basic goods like groceries. We inspect tomatoes for bruises, pick out the freshest loafs of bread, and enjoy doing it to boot.

In recent years, we have seen the social ecommerce trend attempt to emulate the social nature of shopping, but few ecommerce companies have had to tackle the consumer confidence problem. Until now.

Amazon has largely captured the market for intent-driven purchases. You already know you want it; they have it, you buy it.

New ecommerce companies have had to differentiate on other dimensions, most notably in the realm of discovery -- the idea of introducing us to that product we didn’t know we needed and yet will become a new must-have.

You’ll notice that the more an ecommerce company competes on the discovery dimension, the more illustrative and rich the supporting content.

That’s because we want – need -- to qualify our purchases, particularly discretionary ones, because buying with confidence lowers our buyer’s remorse.

Shopping in person is the best way to do that, but video is the way we will do that online.

Here’s why:

1. Video is the most preferred method for consuming information

We watch more than we read. The average American spends over 6 hours a day watching video, but spends less than 1 hour reading.

Human communication is inherently visual, but ecommerce today is flat and utilitarian, more like a mail order catalogue than an in-person experience.

Imagine an online shopping experience that is show and tell, where you get all of the information you want to know about a product while being entertained.

2. Video is the next best thing to being there in person

The in-store experience helps us decide what products work for us. It’s hard to make that decision based on product photos alone.

Imagine an online shopping experience that goes beyond photos, where every product you’re interested in is showcased in a video. Where you can see how that jacket fits, how it sits, and what it looks like in motion, and where an expert helps you pick out the perfect one for your body, and budget.

3. Video powers education

Video is both visual and verbal, which means it communicates twice the information with the same amount of time.

All of us want to be educated, especially about the products we buy. The more we know, the better we are equipped to make decisions.

Imagine an online shopping experience that is so informative that you always know what to expect. Where you can learn everything you want to know about a product while finding inspiration at the same time.

These three unique characteristics are the reason that video will play a critical role in increasing consumer confidence and thereby increase the amount of retail shopping that happens online.

In a world where 94% of our retail shopping is still brick and mortar, the future of online may well be with video. There’s only one way to find out. Stay tuned. 


Guy Gal is the Vice President of Business Development at Joyus.

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