1. Transcript of Jason Arend's speech and presentation on Video Commerce - The Quiet Revolution, given May 11, 2010 at the Hilton New York in New York, NY.Cell:1 (417) 496-6315 Email: jasona@pfiwestern.com Or Twitter: http://www.twitter.com/jasonarend LinkedIn: http://www.linkedin.com/in/jasonarend Website: http://www.jasonarend.comPFI:http://www.pfiwestern.com Shopping Western Stye:http://www.shoppingwesternstyle.com-------------------------------(Slide 1 - Title Slide)Good morning! My name is Jason Arend, I'm the Director of Ecommerce, Global Marketing and Creative Services for all PFI companies and the Director of the internationally syndicated television show "Shopping Western Style."When I gave my presentation at Streaming Media West in Silicon Valley last year I had several people come up to me afterwards and thought I was joking about the history of our company. so I want to start by saying I'm not making this up or exaggerating PFI started in 1975 literally as dusty, little ,1-room cattle feed and farm supply store in Springfield, MO. Randy Little the CEO, my boss and the cofounder of PFI has grown the company into a family run empire with a pretty diverse portfolio of businesses.Though we long a go stopped selling cattle feed. We now have PFI Western Store, which is the largest single-store western retail space on earth, with over 30,000 pairs of boots on hand. Saddle city one of The largest Equestrian retailers in the world with over 800 saddles in-store. Diamond Ridge Market a specialty Wine and Cheese store. PFI Family Wines which are our private label wines out of Napa Valley and Paso Robles. PFI Family Farms which consists of Organic foods and cheeses. The Starlite Theatre in Branson Missouri, with live entertainment from grammy award wining artists to vegas style Cirque Shows. On top of that we have several other investments including an advertising agency and a private charter service with private airplanes, a handful of clothing and footwear brands, our internationally syndicated television show "Shopping Western Style" and finally pfiwestern.com which is our main online retail venue.So as you can see I have my hands quite full at PFI and I also do consulting for a number of clients on video commerce and other areas of media and global marketing. I'm not easily impressed but a company that in just 35 years can go from simply selling food for cows to an small empire thats this diverse just blows me away and it's something I'm really proud to be a part of.(Next, Slide 2 - View Video Examples at pfiwestern.com)With so much going on and at the core still being a relatively small organization we really have to find innovative ways to stretch our resources.About two and half years ago we made a conscious decision that we weren't going to participate in the economic recession and put together an innovative business model that leverages television, online video and ecommerce to reach new customers and

2. raise brand awareness without opening additional physical retail stores that in our industry seemed to be closing daily.Starting out we purchased airtime on RFD-TV which is a niche cable and satellite network boasting about 40 million subscribers and provides programming directly aimed at the rural, agriculture and equestrian communities. For PFI Western Store and Saddle City thats about as targeted of an audience as you are going to reach.(Open Browser - Demo Online Video Examples)We created a sort of western home shopping show that features the latest in cowboy boots, saddles, and western fashion. Not only are we using it as a direct sales tool but additionally producing, educational, informational and entertainment content thats relevant to the western industry and lifestyle.(Next, Slide 3 - Overview and Interesting Facts)Obviously the cost of airtime and television production isn't cheap but by building close partnerships with our manufacturers and other sponsors we've been able to cover almost all costs using CO-OP and advertising dollars.The first year we produced 17 full 26 min episodes , each episode consisting of about seven, 3 minute segments plus some additional branding and promotional content that we throw in each show. It went over so well we were asked to produce 45 episodes the second season and this year 54 episodes so that there is a brand new show every week with 3-4 airings through the week.Now once I had the production workflow for the television show running fairly efficiently I knew it was crucial to find ways to utilize this content online. At that point we already had lots of content but we literally had NO budget to build and carry out our online video strategy.And by no budget I don't mean $10,000 or a $1,000 I mean absolutely 0 dollars. So I really had to get creative, In about 3 months, on top of our normal work load, we were able to build a massive branded video commerce website developed completely in- house by myself and my programmer, Myke Bates. utilizing open source technologies such as Wordpress and Flowplayer and integrating them with our existing ecommerce platform. Again, production, photography, design, development, advertising, everything is done in house, nothing is outsourced, and we've really been able to build a unique, enjoyable shopping experience.(Next, Slide 4 - State of PFI's Video Commerce Program)We now have 80 full 26 min episodes of our television show and and about 700 pieces of unique video content currently online. Over 3000 pages on pfiwestern.com have at least 1 video on them. On average we are seeing a 50% increase in conversion rates on products that have video and a 29% reduction in returns. If a boot fits a half sized small or if it takes a couple weeks to break in we can address these issues right of the bat using video which helps tremendously in keeping product returns down. We are also seeing Increases in average order value, increase in return visits and longer average time on site. Nearly a quarter of our daily visitors are viewing on-site videos. It has completely changed the way we think about online merchandising and customer engagement. We've now taken Shopping Western Style on the Road as well for our "American Made Tour," which is a series showcasing products we sell that are made 3. right here in America and kind of presenting fun, educational tours of their factories and some of the handcrafted products that they produce. This has worked incredibly well with this type of demographic and even for boots that cost about $400 a pair we've seen as high as 300% increases in conversions when utilizing this type of content online.One downside to using video content that was originally targeted to a television audience is that it doesn't quite follow best practices for online product videos so we've begun rolling out a ton of new content that are short 30-60 sec product walkthroughs made specifically for the web with less fluff than what's necessary for the television show and can be crafted for the exact page that it is going toe posted on.Since implementing this content we have seen on average an 80% increase in conversions on products with these videos on the product page over pages without video, 30% higher than the longer 3 min videos that have been repurposed from the television show.(Next, Slide 5 - Multichannel Video Strategy)Now as I said before it is really important that we stretch our resources as far as we can, to increase reach and visibility there are many channels in which we repurpose video to maximize return. We have the television show with 3-4 airings a week, and that content is transcoded for use in our shopping western style branded video commerce website, then in to product pages, landing pages, syndication to video sharing sites, social networks, mobile compatibility, in-store displays, individual rss feeds for every type of content so the customer can customize what they want to subscribe to, we are now using video in the majority of our email campaigns and seeing 2 -3 times the click throughs when supported by video previews. We also syndicate to the iTunes store as a podcast where our customers can subscribe to the show for free and and sync it to there ipods, iphones or itunes compatible mobile devices and we are using video in several other areas as well. For retailers I recommend testing video anywhere that it makes sense to put it, measure everything and adjust accordingly.(Next, Slide 6 - Video SEO Results)The SEO benefits are one of the most attractive aspects of using online product video. Search engines are giving a lot of weight to videos right now. Not only are we starting to see substantial increases in our organic rankings but we can absolutely dominate the video search results in google, our content through syndication is often taking up 8 or more of the top ten results for various related keywords. And in Bing & Yahoo our content is often taking up over 90% of the video search results on the first page for targeted keywords! If you are not familiar with video SEO I would highly recommend a recent Ooyala Webinar specifically on Video SEO. And Mark Robertson's website reelseo.com they have some great content there. As I said earlier one of our business is the Starlite Theatre in Branson, MO where we have live shows including Rock & Roll Hall of Fame inductee Bill Medley of the Righteous Brothers, The World Famous Platters, The Texas Tenors from America's Got Talent and Montage which is a new Cirque show out of Vegas. If you can use video to sell more cowboy boots online then surely you can use video to sell more tickets to performances by grammy award winning artists and thats exactly what we have done.(Next, Slide 7 - Starlite Theatre Online Video Marketing Results) 4. We produced a significant amount of content for each show including, live performance videos, interviews and behind the scenes footage and used a very similar multichannel video and syndication strategy as we have with Shopping Western Style. Customers usually call in to buy tickets rather than buying them online. As of last week since we have launched video we have seen a staggering 593% increase in online ticket sales over the same period in 2009. Compared to what we have done with PFI, Starlite's video presence is still in it's infancy so I'm excited to see what the results are in another 6 months.Diamond Ridge Market is the only business that we are now a little behind on generating content for. Online wine retailers have already had substantial success in increasing sales by supporting their products with video and we will be rolling out more wine related content for that store in the next few months.(Next, Slide 8 - Branding Personality and Trust)Online, often your biggest competitor is peoples attention. What is going to make you memorable? Why would someone choose to engage with your brand? There are several areas to concentrate on that will boost user engagement, but I think one the most overlooked yet highly important is Personality. Video gives us the opportunity to use the same product experts you would meet in our stores and a medium in which to share their knowledge and experience of the products and lifestyle . Not only does it allow us to add a more friendly, human element to our website but we can create relationships and trust with people before they ever step foot in one of our stores. When customers in come into our stores they'll address our associates by name even though we've never met them. Unlike text or images in online marketing with video you have the opportunity to show enthusiasm for your products get you customers excited about about buying. So in some cases it's fine to do something completely off the wall to really stand out from the crowd. We recently produced a video thats about to go up on Walls Waterproof Bibs and Overalls, We took one of our sales associates outside dressed them up in the product we were promoting, called the fire department and had them repeatedly shoot him with a firehouse to demonstrate the effectiveness of a new waterproof apparel technology. I have a feeling we'll be getting some good viral action off that video. Either way it was fun to shoot. Lately we've been working on ways of increasing customer interaction by encouraging our customers to share stories and testimonials online and have started a new program called "Ask the Experts" where we take questions from our viewers and answer them on the television show really to further position ourselves as the authority on the western industry and lifestyle and to create an ongoing dialog with our customers. Since most people perform search queries in the form of a question it also allows us to rank in the search engines for almost any type of question related to the industry and lifestyle.Video has given us the opportunity to show that we aren't just a company trying to sell you stuff, we can finally show that there are real people behind the brand, personalities that live the same lifestyle as our customers. Again really connecting on a more personal level.Earlier this year our television show was picked up for global syndication so for no additional costs we are reaching 52 million additional subscribers, through a combination of satellite, set top boxes and IPTV. When I took over the ecommerce division a few years they were shipping to about 4 countries with minimal traffic to the website. We are now shipping to over 40 countries, our traffic has gone through the roof 5. and we have visitors from over 132 countries on any given 30 day span.It isn't just online that we are seeing substantial increases in traffic and sales. Our brick and mortar store is very much becoming a tourist destination in and of itself. I came up with and developed with Myke Bates an in-store Kiosk system that aids in customer data acquisition and allows us to track what triggered the customers to come into our store, what products they are interested in and what advertising efforts are working. We found that nearly a third of visitors coming to the store in the last 6 months are coming from watching the show on television, And another third are coming from seeing us online. After I broke down the kiosk users addresses into latitude and longitude I found that the average customer is traveling over 300 miles as the crow flies to come to our store, and obviously the actual distance travelled is greater than that. But this number absolutely blew us awayOne of the biggest obstacles retailers see in implementing product videos is the perceived cost equipment production and hosting. For small brands that want to jump into video commerce this can actually be done very cheaply I recommend grabbing a Flip HD cam for about $200, the most basic of editing software, use the product experts you already employ as talent and starting out if you can't find an online video platform that fits your budget we've had extremely good luck just using a regular hosting company with good storage and bandwidth and use free open-source technologies such as wordpress and flowplayer. Then as sales grow you can scale your video program accordingly. As I discussed earlier we took a similar approach and when I was ready to start moving into a more feature rich Online Video Platform( we recently partnered with VOPED) we began running into problems with execs because our ROI was so high with our in-house solution that it was at times difficult for them to justify spending money on another solution.(Next, Slide 9 - Title Slide)Another exciting area of video commerce is the ability to start merging the in-store an online shopping experiences through the use of mobile devices to create a more personal shopping experience. While we have video displays in store that run video segments for the products in that area in 6 x 6 square foot areas we might have 20 products and we certainly can't have 20 different product videos all running at once so one of the areas we are exploring is using either mobile cam barcode scanning, RFID tags or image recognition to trigger streaming product videos to your mobile devices through a browser or custom app. So for our more anti social customers that would rather find product information on there own rather than speaking with s sales associate. For a faster low cost implementation you can have a customer simply bring up the website on their phone and enter the product name or style number to brig up a product video . Not only is it a great tool for customers but it's a great tool for new sales associates to get more familiar with your products.There are many new areas I'm currently exploring as we move forward, from infrequent Video MMS advertisements to text message subscribers, iphone and mobile applications, interactive in-store videos triggered by RFID tags or image recognition, and an all encompassing interactive video shopping experiences through touch-enabled devices.Mobile is an area we are really gearing up for, though a good part of customer base is several years behind on technology we have higher amounts of traffic from mobile phones on average than many of the tech sites I consult for. There are a couple of reasons for this. First, the simplicity of using touch based smart phones, they are often 6. much more intuitive for older demographics and devices like the iPad really take the computing out of the user experience to create an intuitive more natural experience. Also most of our customer base isn't sitting at home on the computer or in front of a television all day, they are out working on the farm, or ranch, farming or riding horses. So with the help of our new partner VOPED we've made our content iPhone and iPad compatible. If your headstall breaks or you are having an issue with your saddle. You can pull up pfiwestern.com on you phone, touch a video on saddles, get the information you need and make a purchase all with out ever getting off your horseI'll be going much more in depth on mobile video commerce and the future of video commerce technologies such as augmented reality shopping at the Video Commerce Summit this July in Seattle. In the meantime you can stay up to date with some of things Im working on at jasonrend.com and I encourage to check out some of the videos I've been discussing today at pfiwestern.comThank You.---------------------------------------Transcript of Jason Arend's speech and presentation on Video Commerce - The Quiet Revolution, given May 11, 2010 at the Hilton New York in New York, NY.Cell:1 (417) 496-6315 Email: jasona@pfiwestern.com Or Twitter: http://www.twitter.com/jasonarend LinkedIn: http://www.linkedin.com/in/jasonarend Website: http://www.jasonarend.comPFI:http://www.pfiwestern.com Shopping Western Stye:http://www.shoppingwesternstyle.com