Selling online with video

Seattle Direct Marketing AssociationJanuary 8, 2009

Alison JeskeDirector, Product Management

drugstore.com

Introductions:Alison Jeske With a decade of experience in

eCommerce, Alison Jeske has worked in customer acquisition, retention and customer service aspects for online retailers. Alison is currently Director of Product Management for drugstore.com, inc., where she is responsible for defining site strategy, and implementing new site features to deliver an exceptional personalized shopping experience.

Prior to joining drugstore.com Alison was a senior member of the eCommerce team at Cingular and AT&T Wireless.

drugstore.com, inc. (NASDAQ:DSCM) is a leading online retailer of health, beauty, vision and pharmacy products. Our portfolio of brands include: drugstore.com™, Beauty.com™ and VisionDirect.com™. All are accessible from http://www.drugstore.com and provide a convenient, private, and informative shopping experience while offering a wide assortment of more than 35,000 products at competitive prices.

Overview of drugstore.com’s entry into video – where did we start?

Launch of new Beauty.com site in November 2007 – included video

Video library (self-produced and vendor videos) Brand boutique videos Objectives:

Increase basket size Increase time on site Provide enhanced shopping experience for prestige

beauty customers What did we achieve?

Basket size and time on site difficult to directly correlate to video viewing (new features also launched w/ new site) but noticeable improvements

Positive feedback from customers

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Pop up window displays video

Overview of drugstore.com’s entry into video – what are we doing now?

New tools and expansion of video into drugstore.com

Partnered with Liveclicker to provide rich tools for bridging video and commerce

Launched Beauty.com new video site in July 2008 Launched drugstore.com video site in Sept. 2008 Securing content from vendors and producing our

own videos Expanding distribution to our affiliate network as

well as Twitter, YouTube, Google Video, etc. Measure, measure, measure!

Liveclicker tool provides many features:-’buy’ just one click away-product links in video-product listings and reviews-sharing-rating of videos-customer generated comments videos-access to related videos/whole library-push to YouTube, Twitter , Viddler, Linkshare, Google Video

Over 45 videos on Beauty.com, 60 on drugstore.com

Monitoring impressions, page views, viewing time (10 sec, 60 sec, full view), click through on buy button

Note: Spikes in impressions correspond to industry blogs, emails

Other exciting metrics – majority of Beauty.com videos have 10-sec play through greater than 70%!(that tells us our customers are engaged and responding to the video content)

Affiliate distribution launched in Dec. and page views have been increasing steadily(monitoring impact to orders, but too early to tell)

Initial drugstore.com launch of video site was heavily focused on toys and games

Expanded video to product details pages in December

Placement on product details page is to aid customer in purchase decision (like reviews)

Results?Continue to see increases in page views,

impressions, time on sitePositive feedback from customersEnthusiastic response from vendors – finding

content is not a roadblockAnalyzing benefits from video placement on

product details pages (launched in 4th quarter)Also analyzing benefits from distribution of

videos across social media sites, affiliates, partners (launched in 4th quarter)

What’s in our future?Continue to broaden access to video throughout

the site (product details pages; tutorials on new site features)

Expand adoption with our affiliates and partnersFocus on customer generated videos (contests,

etc.)Develop in-house videos (videos for our “brand”)Addition of video sites Continue to monitor and analyze results

(customer satisfaction, orders!)