Is YouTube a shopping powerhouse waiting to happen?

Source: Google
Oct 15, 2020
Tom Ryan

YouTube is asking creators to tag and track products featured in their videos as part of an “experiment” in what is potentially a major step toward fulfilling the platform’s e-commerce ambitions.

Creators have largely monetized their YouTube content from advertisements served on their videos and from YouTube Premium subscribers watching their content. Some videos include links in their descriptions to Amazon or other retailers designed to drive affiliate sales.

The video tags that YouTube is now testing are linked to analytics and sales through Google, YouTube’s parent. A Shopify integration is also being explored, according to Bloomberg. The report stated, “The goal is to convert YouTube’s bounty of videos into a vast catalog of items that viewers can peruse, click on and buy directly.”

The move comes as recorded and live-stream video shopping, often led by influencers, is becoming increasingly hyped, marked by last year’s launch of Amazon Live, Instagram’s move into videos and Walmart’s interest in TikTok.

As the largest video sharing platform, YouTube could tie product placement to unboxing videos, cooking demonstrations, make-up tutorials and how-to videos. According to a Google survey taken in February, over 70 percent of users said YouTube makes them more aware of new brands.

The news is raising hope among some users that the integration of e-commerce will reduce the number of ads on the platform.

However, while live video shopping boomed in China last year, it hasn’t yet taken off in the U.S. Some see video shopping akin to television shopping, which has evolved into a niche rather than the broader opportunity some projected when the medium arrived in the early nineties.

Moreover, YouTube is seen by some as more of a search engine than a social media platform that may be more applicable to shopping. The site focuses on content consumption rather than content sharing, relationship building and conversation.

Piper Sandler’s “Taking Stock With Teens” survey for Fall 2020 found the three most used social media platforms by teens to be Instagram, Snapchat and TikTok, avoiding including YouTube in the rankings. YouTube was found to rank second in daily video consumption among teens, behind Netflix.

DISCUSSION QUESTIONS: How would you rate the strengths and weaknesses of YouTube as a potential shopping platform? What changes may be necessary to make the site more conducive to shopping?

Please practice The RetailWire Golden Rule when submitting your comments.
"I don’t see YouTube as a potential shopping platform, however their role in the purchase journey will become more important and relevant."
"YouTube is the place to go for watching videos and learning new things. That’s how it is perceived; it’s not where we go to shop."
"I’m sure YouTube will take their time to make sure it’s a seamless, enjoyable (at least not annoying) experience."

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27 Comments on "Is YouTube a shopping powerhouse waiting to happen?"

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Stephen Rector

As the article mentions, live stream video is huge in China – and from what we have seen over the past several years, how the customer behaves in China becomes the global norm, for instance, the continued shift to mobile shopping from desktop. Whether or not YouTube will be the predominant video shopping platform is still to be determined – Qurate has the legacy advantage and other social platforms like Instagram and TikTok will be strong competitors as well.

Jeff Sward

If YouTube is already second in daily video consumption, how far behind can shopping be? YouTube is a great “how to” platform. YouTube is a great learning center. Learning is part of shopping. It’s not a big leap for YouTube to become a direct link for shopping and buying so many of the products they already feature.

Suresh Chaganti

Count me as a skeptic, as YouTube has a number of barriers to overcome before becoming a meaningful competitor in the live commerce space.

I was watching Amazon Live last night and realized how compelling the execution is. It feels natural and organic. The reason that it feels that way is that the core elements are in place – an extremely large consumer base, a community that is heavily invested in doing reviews, Q&A, and the biggest third-party marketplace. Live commerce brings all these together in an extremely effective manner. Amazon Live does just that.

YouTube on the other hand has a huge handicap on every one of the above. Google could never become a serious shopping destination even if half of the searches originated there.

Brett Busconi

Interesting view. Do you feel like Amazon Live is really a newer/better version of QVC?
I do. My belief in a YouTube advantage here is that it is apples and oranges compared to that QVC approach.

Think of what you may watch YouTube for:

  • Cooking – click to buy ingredients;
  • Music — click to buy;
  • “How to” instructions – click to buy what is needed to accomplish what you searched to learn about;
  • Speakers on subjects that interest you – click to buy books/associated materials to continue your learning.

The possibilities are endless to me. The viewer/shopper can select what video they want to see. Sure the algorithm will still suggest things (and in this way act the role of the programmers on Amazon Live or retailer merchandisers) but everyone can type in what they are really most interested in — and there you solve one of retail’s biggest goals.

Suresh Chaganti

Fair points. The advantage for Amazon is frictionless experience. YouTube on the other hand has to hand off and is a referral site. Simply put, Amazon and YouTube start from the opposite ends. YouTube has an audience that is not shopping oriented yet. Amazon on the other hand does not have an audience that is watching user generated content. But I suspect Amazon is much closer to the destination than YouTube is.

Brett Busconi

Thanks for expanding/clarifying your thoughts for me, I appreciate that. Your position that Amazon is frictionless is strong. I do believe that YouTube (or someone else running with the same “ball”) will overcome the friction to make it feel safe and easy with a strong set of partners. There certainly is enough at stake to encourage a big commitment here.

Bob Amster

Wouldn’t that be annoying?

Gene Detroyer

I think I am too old and out of touch to comment. The only things I have watched on YouTube are TED Talks, Governor Cuomo’s briefings, and instructions on how to fix my computer.

Brett Busconi

This is huge for Alphabet/Google/YouTube – and for other platforms to work toward as well. With influencers and everyday reviews both being available on YouTube, this makes a push for the contextual commerce that we believe will become more and more the way for purchasing opportunities to more closely align with everyday activities. If they put tags in place to allow for clicks to take people right to where they can order (safely) then I don’t think there will need to be many tweaks.

If they can roll all of the items into a shopping list option, as well, think about that potential. Watch a video to tell you how to repair a sink issue and there is a tag to order all items needed. Watch a video on how to bake a perfect soufflé and there is a tag to order all items needed.

This makes sense and will be successful.

Now how does Amazon/Target/Walmart make sure that the click through on another platform goes to their ordering fulfillment system?

Rodger Buyvoets

I don’t see YouTube as a potential shopping platform, however their role in the purchase journey will become more important and relevant. On the other hand, I do see lots of opportunities to facilitate e-commerce as a feature – just as Instagram has their shoppable feature. E-commerce will be widely spread across more and more outlets such as social, video, etc. And YouTube is indeed one of them. In the coming 10 years, the “buy” button will find many new positions in different channels; that’s just the way omnichannel is evolving — and brands should definitely get on it.

Chris Buecker

YouTube as a potential shopping platform would be big business, if done carefully and properly.

Xavier Lederer

YouTube is in a strong position: it is popular across all age categories (73 percent penetration among adults on average) and is strongest among the 15-25 years old (81 percent penetration). If they manage to offer a seamless experience to buyers and sellers to convert people interested to learn about a product into actual buyers, it has the potential to change the e-commerce landscape.

Ralph Jacobson

YouTube is not a potential platform. It is already happening. It is widely viewed globally and creators are reaping ad revenues as we speak. Videos with lists of products in their content are commonplace. With increasingly shorter attention spans, video is where it’s at.

Brandon Rael

The shop now capabilities and influencer-led videos, along with live influencer-led streams have been around for quite a while, and the moment may have passed for YouTube. If anything the momentum in the social media space is clearly on TikTok’s side. Especially as Gen Z and younger Millennial consumers are constantly on TikTok, and the platform has become a powerful influencing force on young consumers’ decision-making process.

The lines between social media and shopping have been blurring for years. We should expect that our market will eventually follow China’s lead, with TikTok emerging as the leader in the shop now capabilities. TikTok is testing a feature that will include the same call to action in creator videos, with the ad revenues split between TikTok and the creator or brand.

We should expect that more than 75 million U.S. social network users ages 14 and older will make at least one purchase from a social channel in 2020, up 17.3 percent from 2019.

Rich Kizer

Facebook Live has literally saved thousands of retailers during this pandemic. Is it a potential shopping platform? With their traffic and knowledge — I would say that the “Facebook Tsunami” is insight.

Georganne Bender

A lot of this conversation needs to center around usage. YouTube is the place to go for watching videos and learning new things. That’s how it is perceived; it’s not where we go to shop.

A tag I can click to buy whatever I am watching might be helpful, but I’m not sure if that would be helpful or annoying. I pay the YouTube monthly fee so my grandson can play games without ads. I wonder if consumers will be able to avoid being sold to as well?

Shep Hyken

To me, this is old news. YouTube has been a powerful place to showcase products. Commercials are posted just waiting for customers to view them. Some ads are more than the typical 30 second spots booked in a TV show. Instead they are 10 and 15 minute infomercials. Many have already adopted YouTube as a powerful way to promote. Now it may be time to be able to place your order at the point of viewing.

Lisa Goller

YouTube is poised to triumph as shopping migrates online. That’s because retail is no longer about traditional retailers – it’s about the fusion of retail and tech.

Lots of compelling strengths. Owned by tech giant Google, YouTube offers a pervasive search platform as more consumers shop online. Video will only grow in significance as we get more comfortable with Zoom and Google Meet. As part of Google’s e-commerce strategy, YouTube is a reputable brand that can afford to attract marketing influencers and content creators. Also, the convergence of entertainment and shopping is taking off with livestreaming and social commerce, including Google’s new Shoploop platform.

However consumers think of Amazon and traditional retailers before tech brands like YouTube, so working on top-of-mind brand status is necessary to get consumers into the habit of thinking of YouTube as a retail player. Consumers may resist further commercialization, as they want to use YouTube for entertainment and educational purposes only. Also, YouTube needs to overcome consumers’ data privacy concerns to differentiate its offering from online shopping rivals, including Facebook.

Karen S. Herman

Offering creators the opportunity to host shoppable videos is a long-overdue value-add to YouTube. It offers deeper engagement as a marketing channel and increases interest for users. I see shoppable videos on YouTube working for the disruptive retail solution of digital trunk shows that are being explored by many small-to-large brands these days due to the coronavirus and their decision to cancel in-person trunk shows, as just one example.

Sterling Hawkins

It is only a matter of time before YouTube becomes a shopping platform. The user interface is everything so I’m sure YouTube will take their time to make sure it’s a seamless, enjoyable (at least not annoying) experience.

Matt Cebulski

YouTube will become a significant shopping platform as soon as they can figure out integrations, partnerships and craft a great customer experience. Imagine watching a cooking video and immediately being able to get all the ingredients delivered via your local grocer, or watching a home improvement video and having all the materials shipped to you. If you’re spending time on a platform, you’ll soon be able to shop from it. I believe this will extend even to Netflix with partnerships with food delivery companies.

Harley Feldman

YouTube is an archival site where people place content for someone who might be interested at a later time. It does not come to mind as a shopping site even though there is vast content available. It would need to change its image, develop selling partners and a platform that would draw consumers.

Craig Sundstrom

There’s no mystery as to “YouTube’s place in the grand scheme of things” started as a place to showcase (the modern day equivalent of) home movies, it’s morphed into the Amazon of videos. You go there if you want to see something but have nowhere in particular to look.

But it doesn’t make money doing that, so it’s become larded with ads … which IMHO pretty much ruins it. This should complete the process.

Ananda Chakravarty

YouTube has great potential to convert to a shopping platform, but at present it’s too cluttered with videos, most of which are not professionally done or even review quality. The challenge will come from curating the huge video libraries to accommodate specific items and to enable search capabilities that are more to the point of encouraging sales and product review.

Lots of potential, but there needs to be a more formal shopping outlet, especially geared towards the act of shopping rather than product placement, or byproducts of box openings and recipes. They won’t compete with online shopping sites nor directly with Qurate.

The advantage it can bring will be found in its ability to be interactive and build community. Amazon is primarily a transaction engine, YouTube Shopping needs to be a community/social media/interactive video portal — different audiences and different motivation to shop.

Ricardo Belmar

It seems every consumer platform is vying to be the next commerce mega-site! YouTube has many of the building blocks for a strong future commerce solution, especially if we factor in live streaming video, as seen in China and other regions in Asia. If retailers embraced this selling method, and Google makes YouTube a bit more engaging like other social networks (current comments capability is a bit lacking), there may be something worth talking about. Until those pieces all start to fit together properly, YouTube will not be the next Instagram, Snapchat, or TikTok. At the moment, most people think of YouTube as a search tool for how-to experiences, but not for shopping. There is an opportunity for a new paradigm of learning + shopping combined if YouTube can connect the dots both on the tools’ side for creators and brands and on the interface side for consumers.

Katie Hotze
5 months 30 days ago

Social influence in digital sales is nothing new, yet YouTube hasn’t leaned into that trend yet. Influencers are still dropping referral links from Amazon into their comments to gain the sale. YouTube’s relevancy will ultimately take a toll if they don’t cater to the trends and habits of younger viewers, so this experiment is an imperative for them.

Christopher P. Ramey

In short, no. Time is currency. YouTube is like a joke that takes too long to develop; nobody with capacity laughs (or buys) at the end.

"I don’t see YouTube as a potential shopping platform, however their role in the purchase journey will become more important and relevant."
"YouTube is the place to go for watching videos and learning new things. That’s how it is perceived; it’s not where we go to shop."
"I’m sure YouTube will take their time to make sure it’s a seamless, enjoyable (at least not annoying) experience."

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