Jeff Griffin, vice president of strategic accounts, Nfinite
Retailers are currently facing their most challenging financial year since 2020. The combination of increasing labour expenses, higher cost of goods, and consecutive interest rate hikes over the past 18 months has led to a decline in consumer spending. As a result, retailers are looking for solutions to sustain profitability while contending with sharp budget cuts and resource limitations. Achieving the same or improved financial outcomes while operating with reduced expenses demands increased effort and enhanced creativity.
Given the constrained financial resources, it’s imperative for retailers to adopt a strategic approach to thrive in this demanding environment. The question that constantly echoes in the minds of retail executives is: “How can my team do more with less?”
Whether it’s optimising suppliers to reduce the cost of goods sold, rationalising under-performing brick-and-mortar stores, focusing smaller ad dollars on higher-margin items, or minimising labour costs at headquarters, in the supply chain, or in stores, retailers are exploring all options.
Let’s examine one core area — image creation used online and in stores — and how retailers can tamp down spending while elevating the customer experience and ultimately winning precious item, category, and channel share.
Are conventional approaches worthwhile?
Most retailers rely heavily on photo shoots for product imagery, as they have for over a century. But long timelines, complicated logistics, and prohibitive, often unrecoverable costs make it difficult to meet the needs of today’s retail reality. In fact, according to a report in partnership with Dimensional Research, 96% of retailers face ongoing challenges in creating imagery.
To successfully create most product images today, retailers must order product samples, scout for locations, hire a photography crew, and much more. The combination of these expenses, plus the unexpected changes and unbudgeted hurdles that always happen, often lead to retailers spending more than they originally allocated. Typical photo shoot budgets are over $500,000 per year, and 68% of retailers regularly go over budget. Continual over-spending for image creation isn’t acceptable or sustainable, especially in today’s climate.
Pioneering the future of image creation
Visuals influence nearly every purchasing decision in the retail space, with 91% of retailers agreeing that great imagery has a clear, positive impact across performance metrics. But there has to be a better — and more cost-effective — way than traditional photography.
Enter computer-generated imagery. Leveraging this scalable technology as the primary method for creating product imagery enables retailers to avoid many of the pitfalls associated with conventional image creation.
With CGI, there are far fewer steps to reach final product imagery output, which significantly compresses timelines and ultimately shrinks costs. With just one 3D model, CGI enables retailers to create a multitude of images without a photo shoot. Think packshots from every angle (simple images on white backgrounds), lifestyle imagery (context-rich imagery that shows products across various inspirational settings and seasons), and 360°-spins, so the shopper can see the product as if it was in their home. The options are truly endless, and there is no limit to the number of images a retailer can create — all without a photo shoot.
Significant outcomes with a limited budget
And the results speak for themselves.
Retailers are producing imagery at scale while cutting net unit costs per image.
To put it simply, they’re doing more with less. Retailers leveraging CGI are seeing 63% faster turnaround times while saving up to 85%. But they’re not just moving faster and cutting costs (which are table stakes in retail today) — they’re also living up to the consumer expectations we mentioned earlier, that have become more demanding. In fact, retailers like Delamaison have seen a 6% increase in total sales and a 66% increase in their add-to-cart rate.
To build or to buy
According to Coresight Research, 40% of retailers have invested in CGI capabilities for their business, while 58% have plans to do so in the future. With over half of retailers considering adoption, should retailers build or buy when it comes to CGI?
When creating an in-house team for CGI and 3D imagery, the cost is not limited to hiring new employees. Overhead costs and research and development account for a large portion of expenses when creating a 3D team, and these heavy capital allocations have to be weighed against supply chain, marketing, and other expenses that might yield nearer-term sales.
By collaborating with a technology partner, retailers can benefit from enhanced flexibility and cost savings, enabling them to rapidly generate high-quality imagery at scale. This approach allows retailers to worry less about constantly staying ahead of cutting-edge technology, which may not be their core expertise. Instead, they can focus on creating more solutions to meet their customers’ needs, driving more sales while reducing costs.
