In our 2012 Digital IQ Index: Fashion, we found that 90% of fashion brands maintain a YouTube channel and their investment in digital video is driving engagement and traffic. Other research shows that fashion videos are also affecting sales — 40% of consumers have visited a store or retailer website as a result of watching apparel videos and 34% were encouraged to make a purchase after viewing an online video ad. YouTube’s new external annotations technology, currently in beta, now makes it possible for brands to integrate their videos with their e-commerce in an even more seamless way by creating non-obtrusive and easy to use shoppable videos. Gone are the days of split screens, awkward pop-ups, and multistep processes — this new capability allows brands to link their video content to product pages on their e-commerce site with just one click.

Juicy Couture is one retailer that has signed up to test this new function. In a video released yesterday, viewers can mouseover different products as the ad plays to display the product’s name and link. Clicking on the link pauses the video and drives users to the specific product’s page on in a new window.

Online retailer ASOS has also tested this technology in a holiday music video they released with singer Ellie Goulding. Viewers can hover over products in the video that are available on and click to purchase on the e-commerce site. “The idea is to help people, advertisers in particular, drive from YouTube to an actual site,” says Lisa Green, head of industry apparel at Google. “It makes it more actionable and specific. … It’s about being able to take advantage of that magic moment when you’re watching [a video] and want to buy it.”

While the link to e-commerce function is currently free, brands are putting ad dollars behind their videos to drive traffic. Michelle Ryan, VP-global digital and social strategy at Juicy Couture, tells AdAge that the video will be central to their holiday marketing efforts and that the brand will closely watch sales resulting from it. “We’re confident in the technology,” Ms. Ryan said. “And in looking where the consumer is going and how she’s consuming content, with our target being the 20-something, this is where she is and where we need to be.”

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