It is possible that all of the products that are presented in YouTube videos will soon also be able to be sold directly via the video platform. Is YouTube becoming a huge product catalog and competition from Amazon?
YouTube has more than two billion monthly active users – and all of them could in the future be able to buy any product in videos on Google’s platforms. The search engine company confirmed an experiment in which first creators can tag articles in their videos and offer them for sale. An integration of Shopify is also under discussion. With these fundamental updates, YouTube could evolve from an entertainment and advertising giant into one of the largest e-commerce platforms. Companies like Amazon or Alibaba are facing more and more competition, especially from Facebook and Google and the upswing in social commerce.
Do you shop on YouTube like on Amazon, Zalando and Co.? Possibly a reality soon
Even before the beginning of the corona pandemic, the growing importance of e-commerce was one of the most relevant topics in the digital economy. During 2020, which is so extraordinary due to the pandemic, online shopping has become even more important. And the development and establishment of social commerce solutions on social networks also benefits from this. The launch of Facebook Shops this year could prove to be a major turning point in e-commerce development in the long term, while other platforms also introduced new features. Pinterest has started a cooperation with Shopify in order to be able to upload product catalogs to the platform, and such catalogs can now also be easily posted worldwide via WhatsApp Business and shared across platforms. The trend app TikTok, on the other hand, cooperates with Teespring to enable creators to sell their products directly via the app.
Google is planning something similar for YouTube – and more. Bloomberg reports that the video platform now allows the first creators to tag products that are shown in their videos with YouTube’s own software and to track further user interactions with them. The data should then be forwarded to Google’s Analytics and Shopping Tools. In this way, YouTube, which generates a billion hours of playback time every day, could transform various video content on the platform into an immense collection of product previews. In the spirit of social commerce, users could discover products, view them with a click and even buy them directly. According to Bloomberg, YouTube is also testing to integrate Shopify on the platform so that brands and creators can also sell directly via YouTube. A YouTube spokesperson confirmed to the publisher that these tests are currently being carried out on a limited number of channels. This could make YouTube one of the largest e-commerce platforms ever.
How can YouTube monetize social commerce?
Should the YouTube tests lead to videos being transformed into product catalogs, that would be a huge opportunity for Google’s video platform to inspire the enormous number of creators and users to shop online on YouTube. It is unclear how exactly YouTube and Google profit from it if the brands and creators present and sell products directly there. On the one hand, the platform’s popularity with creators would possibly increase. On the other hand, YouTube could collect a commission on sales in order to earn money. The platform does a very similar thing with subscriptions that creators generate via YouTube. Here the company receives 30 percent of the income of the Creator. Jitendra Waral, a Bloomberg Intelligence Analyst, on YouTube’s e-commerce development:
Facebook is ahead in this game. But the sheer size of the e-commerce market and its future growth makes it too big to stay out of.
While the corona pandemic has weakened the advertising market – especially in areas such as travel or offline retail – e-commerce has continued to grow. That should be a reason for the advertising giant Google to continue investing in social commerce. In addition, the large e-commerce platforms such as Amazon have not yet been able to popularize shoppable videos. This failure gives social networks the chance to make various video content shoppable, which is already received a lot and with great commitment. Instagram Reels and IGTV, TikTok and soon also YouTube: These channels will only gain in importance for e-commerce. And in just a few years, shopping on YouTube may be as normal as starting a product search on Amazon or looking for news on Twitter.
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