For Successful e-Commerce in the Holiday Season – Imagery is Everything

By Alexandre de Vigan, Founder & CEO, Nfinite

There has been creative visual merchandising for as long as there have been successful retailers. Purchases are often driven by need, but impulse decisions often have more to do with emotions and instinct. How does an environment make customers feel? How does a retailer's look, feel, and ambiance encourage customers to put more items into their baskets?

Can these techniques still be successfully employed in the modern era, where so many transactions occur online rather than in a physical store?

Visual merchandising itself is a simple idea with infinite possibilities. In a physical, brick-and-mortar store, it is all about immersing shoppers in your retail environment so that they spend more time browsing. It also aims to actively encourage them to buy your products. This includes visual engagement, i.e., the physical arrangement of the products. It also includes creating a broader environment incorporating sounds, smell, temperature, lighting, and so on to influence the feelings and emotions of customers and create the perfect purchasing atmosphere.

That's the 'real' world. But what about the online world? The shoppers are the same; their needs are the same, so how do you create and implement visual merchandising techniques in an e-commerce environment as effectively as in-store?

In a recent survey of leading VP or C-level executives at retailers with more than 1,000 employees, carried out by Dimensional Research, 88% said that product imagery was critical to the e-commerce success of the 2022 holiday season. This makes sense. Online is mainly limited to what you can see. But in an environment with unlimited access to descriptions, information, and reviews, the product's visual element is the most important aspect.

All the research points to images being the crucial factor that increases customer engagement, particularly during the holiday season. However, the Dimensional Research survey also revealed that a massive 85% of retailers have creative ideas for improving product imagery but don't have the budget to bring them to life.

For physical stores, the holiday season is almost entirely focused on Christmas, with a brief nod towards Halloween and Thanksgiving. For the online world, creating Black Friday and Cyber Monday has added complexity and opportunity. While the survey said that most retailers consider Cyber Monday to be increasingly an extension of Black Friday, there is still a huge challenge when it comes to creating digital image assets.

According to the same research study, around 30 different images are required for each product. With a typical annual photoshoot budget of around $500,000, 68% of retailers said they regularly expect and do go over budget. However, 31% say they are resigned to the fact that they won't have all the image assets they need, and 28% say they often wait for images up to the very last moment. This is not conducive to strategic planning and ensuring customers' best visual merchandising experience.

High-quality and appropriate product imagery is key to the success of e-commerce campaigns. Images have an emotional impact that is more important than reviews and descriptions on online purchase decision-making.

As we have established, high-quality and appropriate imagery is key to the success of e-commerce campaigns. 91% of retailers said great imagery clearly and positively impacts their performance metrics. In addition, 89% said images have an emotional impact that is more important than reviews, descriptions, and many other types of input into online purchase decision-making. And for the holiday season, 88% say product imagery is key to their strategy.

Modern visual technology for e-commerce now includes 3D and CGI imagery, which significantly increases the flexibility and scope of existing image assets. These can help create the range and variety needed images without increasing photo budgets. 87% of respondents said 3D and CGI creation technology is necessary to deliver their product visualization strategy.

With the 2022 holiday season now upon us, retailers have some fast decisions to make to ensure their e-commerce sites are ready and optimized for the influx of customers. By shifting to 3D visuals instead of traditional photography, they can achieve stronger visual e-merchandising, so that customers will feel more like a physical store experience. Interactive images will allow them to engage with the brand, resulting in more effective e-commerce outcomes.

This holiday season is poised to be one of the longest shopping seasons on record—and there’s a strong case to be made that it has already been going on strong for weeks now. But with an inflation-battered public pickier about how they’ll be spending their holiday dollars, retailers need to bring their A-game this winter to fully take advantage of the most profitable time of year.

That’s easier said than done, though; logistical issues still linger and complicate planning for retailers. Aftershocks of the pandemic disruption to supply chains around the world are still reverberating, and though things have improved, we’re not back to normal yet. Optimizing revenues and retaining market share this season will be trickier than ever, and many retailers are turning to the latest advances in artificial intelligence (AI) technology for help.

AI is seeing widespread adoption in the retail and grocery spaces in recent years. CRM platforms utilize AI for sentiment analysis and data integrity, and multiple marketing software products take advantage of AI to help predict buyers’ behavior and make sales projections. AI has made its way into the physical store as well, tracking customer flow patterns to help design more efficient, attractive stores.

But the advantages of utilizing AI on-premise at retail locations can go far beyond those use cases. Here are a number of ways that artificial intelligence can help retailers gain an edge over the competition this holiday season:

Inventory management systems, when powered with AI, can automate ordering and order-writing processes. AI-enabled cameras can catch outs, scan backrooms to check for backstock, and then order more inventory as soon as products are no longer available for customers in the store. This takes this task off of your team's plate completely.

Those management systems can also utilize AI-enabled camera systems to stay in the “Goldilocks zone” for inventory ordering cycles—not too fast (which comes at the cost of accurate ordering), but not too slow (where retailers can assure accurate, needed ordering but will lose out on the advantages of speed). This increases availability and sales, and reduces extra touches from your team, backstock, and shrink. During a time when customers are as price-sensitive as they are right now, anything retailers can do to avoid price increases will win major market share points—cutting down on the waste that accompanies over-ordering is one way to retain revenue without putting an extra cost on consumers’ plates.

Intelligent cameras scan your shelves hourly, detecting trends. They can learn planograms and catch Chronic Outs. This is when a product is selling faster than expected and causing more outs or touches than planned. If a product is constantly going out of stock early, then likely there is not enough shelf space allocated for it. AI can take advantage of this data and recommend small edits to the shelf to increase shelf space on these products and lower shelf space on slow movers. Then the AI cameras can scan the shelf to check for Planogram Compliance.

Finding enough workers has been a challenge for the last few years for every industry, but it’s been felt acutely in the retail space. Some retailers have been dreading the holiday months due to a lack of floor workers, but those who have adopted automation systems powered by AI have kept margins healthy by letting the employees they do have work smarter. Clear direction on what items need to be stocked, and how many pieces are needed, can help employees restock without wasting time and trips getting the wrong item or quantity. The timeliness of the automation makes it seem to customers that the store is well-stocked by a much larger team than may actually be on staff. With the rising cost of labor, retailers who lean into computer-driven AI systems will be able to cost-efficiently staff without impacting productivity well into the future.

Artificial intelligence can be the game-changer for retailers to fully take advantage of the most profitable time of year.

Francois Chaubard is the CEO of Focal Systems, a deep-learning computer vision company focused on automating brick-and-mortar retail. Prior to founding Focal Systems, Chaubard worked at Apple as a deep learning researcher on secret projects. Before that, he attended Stanford University as a dual masters in CS and EE where he researched deep learning and computer vision under Fei Fei Li, the Director of the Stanford Artificial Intelligence Lab (SAIL) at Stanford University. There he created and taught 2 courses: CS231m: Mobile Computer Vision and CS224d: Deep Learning for NLP. He was also the TA for Stanford's famous Machine Learning course CS229: Machine Learning. Before that, he was a missile guidance algorithm researcher at Lockheed Martin building the next generation of the U.S. AEGIS Ballistic Missile Defense System. Before that, he received a bachelor's from University of Delaware in Mathematics and Mechanical Engineering.