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1、 1 Deep Dive February 16,2023 Deborah Weinswig,CEO and Founder,Coresight Research| Copyright 2023 Coresight Research.All rights reserved.Executive Summary Computer-generated imagery(CGI),also known as 3D rendering,is the process of creating hyper-realistic 2D images using 3D models through computer

2、software.In this report,we analyze proprietary survey findings to explore the challenges that brands and retailers face when producing and managing product visuals for e-commerce,as well as their perceptions of,and investment in,CGI.Market Scale and Opportunity The global visualization and 3D render

3、ing software market is set to total$6.3 billion in 2026,up from$2.9 billion in 2022,according to Global Industry Analysts.This market growth is being driven by retailers urge to increase speed to market and increasing recognition of the benefits of CGI for producing product visuals in e-commerce.Cor

4、esight Research Analysis Companies are realizing the importance of including compelling and immersive product imagery in e-commerce:63%of surveyed brands and retailers in the US and Western Europe currently use lifestyle product photos for e-commerce,and 58%use interactive product photos.There are b

5、arriers to adoption for brands and retailers as well as challenges that limit the effective execution of immersive and compelling imagery.Our survey found that 65%of brands and retailers are struggling with producing product visuals and managing their e-commerce visual merchandising operations.The m

6、ost widespread challenges cover the key areas of cost,connection and consistency.These challenges are exacerbated when brands and retailers use traditional photography,which incurs high production costs and intensive labor.Product returns challenge brands and retailers if they do not produce product

7、 visuals of high quality:55%of brands and retailers said more than 10%of their products sold online in 2021 were returned because product visuals/images displayed did not match the products customers received.Brands and retailers are looking to CGI as they opt for speed and efficiency in better prod

8、ucing and managing product visuals:40%of surveyed brands and retailers reported that they are currently investing in CGI,and 58%are planning to invest in CGI in future.However,those that are not currently investing in CGI tend to think that it is more costly and complicated than it actually is.Among

9、 those investing in CGI for product visuals,all brands and retailers think that CGI has benefited their production and management of product visuals to some extentwith 49%reporting“significant”benefits.The topmost benefits,cited by around half of brands and retailers investing in CGI,are returns and

10、 improved speed to market.More than two-thirds(68%)of surveyed brands and retailers are planning to invest in AI in the future to automate product visual content.AI can multiply the benefits of CGI to improve speed to market by automating the generation of product visuals.What We Think Brands and re

11、tailers need both CGI and AI to enable them to produce next-generation imagery at a quicker pace.Brands and retailers can work with third-party solutions that offer both CGI with AI to automate the generation of high-quality product visuals across different channels.Deborah Weinswig CEO and Founder

12、Coresight Research CGI and 3D Product Imagery:The Future of Visual Merchandising in E-Commerce Deep Dive 2 Deep Dive February 16,2023 Deborah Weinswig,CEO and Founder,Coresight Research| Copyright 2023 Coresight Research.All rights reserved.CONTENTS Introduction.3 Market Scale and Opportunity.3 CGI

13、and 3D Product ImageryThe Future of Visual Merchandising in E-Commerce:Coresight Research x Nfinite Analysis.4 1.The Importance of Compelling,Immersive Product Imagery in E-Commerce.5 2.Challenges in Managing and Producing Product Visuals.6 3.The Impact of Product Visuals on Returns.8 4.State of CGI

14、 Investment and Deterrent Factors.8 5.Benefits to Retailers of CGI.10 6.The Multiplicative Effect of Layering AI on CGI for Visual Merchandising.11 What We Think.12 Methodology.13 3 Deep Dive February 16,2023 Deborah Weinswig,CEO and Founder,Coresight Research| Copyright 2023 Coresight Research.All

15、rights reserved.Introduction As brands and retailers compete for shoppers attention in a crowded online marketplace,they need to display quality product images in order to stand out and satisfy shoppers.Only 9%of US consumers are very satisfied with product images across retailer websites,according

16、to online e-merchandising platform Nfinites“2022 State of Online Shopper Sentiment”report,based on a SeptemberOctober 2022 survey of 1,000 US consumers aged 18+.Brands and retailers need to ensure they produce quality product imagery across different channels to improve consumer engagement,retention

17、 and revenue.Poor-quality images not only negatively impact sales conversion and shopper trust but also put brand image at stake.Computer-generated imagery(CGI),also known as 3D rendering,is the process of creating hyper-realistic 2D images using 3D models through computer software.CGI creates produ

18、ct visuals that can be manipulated to feature different colors,styles,features,designs and background scenes,leading to lower photography costs.Imagery can also be rotated and shown from different angles to enable shoppers to better explore a product.Leading brands and retailers including Apple,IKEA

19、 and NIKE are already leveraging CGI.We show the typical process of CGI creation in Figure 1.Figure 1.Process of How Photorealistic CGI Works Source:Coresight ResearchIn this report,we analyze proprietary survey findings to identify the challenges that brands and retailers face when producing and ma

20、naging product visuals.We examine AI(artificial intelligence)and CGI as potential solutions for next-generation imagery to help them navigate in a competitive marketplace.This report is produced in partnership with Nfinite,a visual e-merchandising software-as-a-service(SaaS)platform,and builds on ou

21、r previous research:Innovator Intelligence:CGI Provides Benefits for Retail That Traditional Photography Cannot Match.Market Scale and Opportunity The global visualization and 3D rendering software market is set to total$6.3 billion in 2026,up from$2.9 billion in 2022,according to Global Industry An

22、alysts.Brands and retailers need to ensure they produce quality product imagery across different channels to improve consumer engagement,retention and revenue.4 Deep Dive February 16,2023 Deborah Weinswig,CEO and Founder,Coresight Research| Copyright 2023 Coresight Research.All rights reserved.Figur

23、e 2.Market Size of Global Visualization and 3D Rendering Software Market(USD Bil.)Source:Global Industry Analysts We attribute the markets future growth to a few reasons:Shoppers are increasingly relying on high-quality photos to inform their purchase decision88%of US consumers say high-quality prod

24、uct imagery is important when making online purchases,according to the previously mentioned Nfinite survey.Retailers need to reduce the time it takes to produce product visuals in order to remain competitive as business priorities and customer preferences shift rapidly.For example,photoshoots used t

25、o take around five weeks for French hypermarket chain E.Leclerc before the retailer partnered with Nfinite,according to the companies.CGI technology has evolved over time,with more 3D photography studios emerging to help companies produce photorealistic product visuals at speed,while improving image

26、 resolution.We expect 3D models to gain popularity among retailers as they have an edge over traditional photography in terms of both cost,time and flexibility.CGI and 3D Product ImageryThe Future of Visual Merchandising in E-Commerce:Coresight Research x Nfinite Analysis In Figure 3,we summarize ke

27、y survey findings and selected insights into the use and perceptions of CGI and 3D product imagery in retail,which we discuss in detail throughout the report.$2.9$6.320222026ECAGR,20222026E:20%We expect 3D models to gain popularity among retailers as they have an edge over traditional photography in

28、 terms of both cost,time and flexibility.5 Deep Dive February 16,2023 Deborah Weinswig,CEO and Founder,Coresight Research| Copyright 2023 Coresight Research.All rights reserved.Figure 3.CGI and 3D Product Imagery:Summary of Selected Survey Findings and Key Insights Base:193 brands and retailers base

29、d in the US and Western Europe Source:Coresight Research 1.The Importance of Compelling,Immersive Product Imagery in E-Commerce Product images can often be the secret to e-commerce success,driving increased interaction,customer loyalty,conversion and,ultimately,sales.Compelling and immersive lifesty

30、le imagery conveys rich information about products,allowing shoppers to view them in their use contextfor example,a couch shown in a fully decorated living room.This gives consumers a sense of how they might experience the product if they choose to buy it,boosting their confidence in purchase decisi

31、ons.Nfinites SeptemberOctober 2022 US consumer survey found that a product placed in a lifestyle context was more likely to capture the attention of 60%of US consumers when shopping online compared to a product on a plain white background.An interactive 3D image helps consumers better explore produc

32、ts from all angles,creating deeper shopper engagement and driving higher average order value.Interactive images that offer 360-degree views can drive 40%extra sales,according to 3D component and solution provider WebRotate 360.According to Nfinite,its Dynamic Display tool,which enables shoppers to m

33、ix and match products in a scene in real time,has led to improvements in website and conversion performance,including a 2.5X increase in in click-through rate,a 55%increase in conversion rate and a 2.8X improvement in repeat customer engagement.Compelling and immersive lifestyle imagery conveys rich

34、 information about products,allowing shoppers to view them in their use context.6 Deep Dive February 16,2023 Deborah Weinswig,CEO and Founder,Coresight Research| Copyright 2023 Coresight Research.All rights reserved.Example of a lifestyle image(left)and interactive image(right)Source:Nfinite As bran

35、ds and retailers increasingly realize the benefits of using context-rich and immersive product imagery in e-commerce,adoption of these types of product visuals is growing.As shown in Figure 4,our recent survey found that more than three in five(63%)brands and retailers in the US and Western Europe c

36、urrently use lifestyle product photos/images for e-commerce,and 58%use interactive imagesputting these types of product visuals among the top three most used.Additionally,19%of respondents stated that they plan to use lifestyle images in future,while 25%plan to use interactive images.Figure 4.Retail

37、 Companies Current and Intended Use of Product Visuals for E-Commerce(%of Respondents)Base:193 brands and retailers based in the US and Western Europe Source:Coresight Research 2.Challenges in Managing and Producing Product Visuals Although the current and planned use of interactive and lifestyle im

38、agery are high,there are barriers to adoption for brands and retailers as well as challenges that limit the effective execution of immersive and compelling imagery.In fact,our survey found that a huge 65%of brands and retailers are struggling with producing product visuals and managing their e-comme

39、rce visual merchandising operations.The most widespread challenges cover the key areas of cost,connection and consistency:high costs,difficulty in emotionally engaging with customers,24%33%38%38%57%58%60%63%33%30%21%23%21%25%21%19%42%37%40%38%22%18%19%18%AR/VR contentUser-generated content(UGC)Non-i

40、nteractive/static productimages/photosAnimations/GIFsVideosInteractive product images/photosInfographicsLifestyle product images/photosCurrently useIntend to use in futureHave no plans to use in futureThere are barriers to adoption of immersive and compelling imagery for brands and retailers as well

41、 as challenges that limit effective execution:65%of brands and retailers currently face challenges in managing and producing product visuals.Brands and retailers are increasingly adopting lifestyle and interactive product images/photos 7 Deep Dive February 16,2023 Deborah Weinswig,CEO and Founder,Co

42、resight Research| Copyright 2023 Coresight Research.All rights reserved.difficulty in producing consistent product visuals,difficulty in producing multiple visuals across channels and limited background templates for product visualsall of which were cited by more than one-third of surveyed brands an

43、d retailers that reported facing challenges(see Figure 5).Figure 5.Challenges Companies Face When Managing and Producing Product Visuals(%of Respondents)Base:125 brands and retailers based in the US and Western Europe that currently face challenges in managing and producing product visuals Source:Co

44、resight Research The perceived challenges can be exacerbated when companies use traditional photography to produce product visuals.For instance,disrupted supply chains may delay the timely delivery of product samples to the photoshooting location,prolonging the completion time of photoshooting.In ca

45、se replacement photos are needed due to incorrect settings,product samples need to be re-shipped and background scenes have to be set up again.Our survey found that 31%of brands and retailers that use traditional photography experience difficulties in coordinating and executing large physical photos

46、hoots.Brands and retailers desperately need a less labor-intensive method to rapidly produce multiple product visuals that meet the unique image requirements of their different online channels.Brands and retailers are pressured to produce multiple visuals per product as consumers rely on imagery to

47、inform purchase decisions.Around four in five(81%)surveyed brands and retailers reported that they typically display at least five product visuals for a single product on their websites.This challenge expands 26%26%26%30%34%35%36%36%41%Limited reusability of product visualsPoor-quality/low-resolutio

48、n productvisualsLack of product visuals expertisewithin the companyDifficulty in creating content forstorytellingLimited background templates forproduct visualsDifficulty in producing multipleproduct visuals for different channelsDifficulty in producing consistentproduct visualsDifficulty in creatin

49、g emotionalengagement with customersHigh costsThe perceived challenges can be exacerbated when companies use traditional photography to produce product visuals.Brands and retailers desperately need a less labor-intensive method to rapidly produce multiple product visuals that meet the unique image r

50、equirements of their different online channels.Cost,connection and consistency are key challenges in producing and managing product visuals 8 Deep Dive February 16,2023 Deborah Weinswig,CEO and Founder,Coresight Research| Copyright 2023 Coresight Research.All rights reserved.when brands and retailer

51、s also produce product visuals for other channels that have different requirements.3.The Impact of Product Visuals on Returns While only one in four respondents in our survey consider poor-quality/low-resolution product visuals a challenge,weak imagery can contribute to a very prominent issue in ret

52、ail:product returns.For brands and retailers,returns are margin-erosive and detrimental to customer loyalty.From our survey,55%of brands and retailers said more than 10%of their products sold online last year were returned because product visuals/images displayed did not match the products customers

53、 received.Comparing between retail sectors,from our survey,the furniture and home-furnishing sector has the highest average of 14%of products sold online in 2021 returned because product visuals/images displayed did not match products customers received,followed by an average of 13%among big-box ret

54、ailers/mass merchandisers and 11%among CPG(consumer packaged goods)brands and retailers.This can be due to the fact that home products tend to be bigger-ticket items and that they need to be properly sized to fit into peoples homes.High-quality product visualssuch as CGI that offers 360-degree views

55、enable consumers to examine products more closely,making them more likely to be confident when making a purchase as they know what to expect from the products they order.This will reduce products returns for brands and retailers and increase shopper trust.As we show later in Figure 8,our survey foun

56、d that 52%of brands and retailers currently investing in CGI to produce product visuals believe that product returns reduction is a key benefit of CGI.4.State of CGI Investment and Deterrent Factors Brands and retailers are looking to CGI as they opt for speed and efficiency in better producing and

57、managing product visuals:40%of surveyed brands and retailers reported that they are currently investing in CGI,and 58%are planning to invest in CGI in future.By retail vertical,furniture/home furnishing is the largest adopter,with 50%of brands and retailers currently investing in CGI,followed by 38%

58、of CPG brands and retailers and 33%of big-box retailers/mass merchandisers(see Figure 6).We found that CGI adoption correlates with AR/VR(augmented/virtual reality)implementation in e-commerce.Our survey found that 30%of furniture and home-furnishing brands and retailers currently include AR/VR cont

59、ent in e-commerce,followed by 25%of CPG brands and retailers and 19%of big-box retailers/mass merchandisers.Leading brands and retailers have been using CGI to create virtual AR/VR try-on experiences and to simulate home environments,putting pressure on other brands and retailers to do the same in o

60、rder to remain competitive.Furniture and home-furnishing is the heaviest adopter,with 50%currently investing in CGI 9 Deep Dive February 16,2023 Deborah Weinswig,CEO and Founder,Coresight Research| Copyright 2023 Coresight Research.All rights reserved.Figure 6.Companies Investment in CGI To Produce

61、Product Visuals,by Region and by Retail Vertical(%of Respondents in Each Subset)Base:193 brands and retailers based in the US and Western Europe Source:Coresight Research Brands and retailers that are not currently investing in CGI tend to think that it is more costly and complicated than it actuall

62、y is:in our survey,44%of brands and retailers cited high cost as a reason for not currently investing in CGI,and 30%cited complexity using CGI to produce product visuals.Figure 7.Reasons Why Companies Are Not Currently Investing in CGI(%of Respondents)Base:115 brands and retailers in the US and West

63、ern Europe that are not currently investing in CGI Source:Coresight Research Companies may think that large investments in CGI software and employees with deep expertise in CGI technology are required to start using CGI,but neither are 40%42%39%60%58%61%OverallUSWesternEurope50%38%33%50%62%67%Furnit

64、ure and home-furnishingCPGBig-box retailer/massmerchandiserCurrently investing inPlanning to invest in futureCGI solutions can help demystify misperceptions among retailers,and enable them to learn about the benefits of CGI Companies may think that large investments in CGI software and employees wit

65、h deep expertise in CGI technology are required to start using CGI,but neither are true.By Region By Retail Vertical 28%30%34%35%43%43%Not aware of solutions that areempowered with CGIComplexity in using CGI to produceproduct visualsQuality of CGI is not up to your companys brand standardsNot aware

66、of the benefits of CGILack of knowledge of how to useCGI to produce product visualsHigh cost of investing in CGI 10 Deep Dive February 16,2023 Deborah Weinswig,CEO and Founder,Coresight Research| Copyright 2023 Coresight Research.All rights reserved.true.In fact,according to Nfinite,it can cost as l

67、ittle as$200 to produce a 3D model with a computer and CGI software.Compared to the costs of traditional photography,CGI is a far more favorable alternative.Among brands and retailers that work with external photography studios,40%claim that the cost of renting a professional photography studio and

68、paying one photographer for a product photoshoot session is$15,000 or more.The cost can reach$70,000 when there are many products to be photographed and when specific equipment(such as snow machines)or complex backdrops need to be set up,according to Gideon Yeomans,Director of Efficiency,Quality and

69、 Capacity at Nfinite.Three of the major factors contributing to the higher cost of traditional photography compared to CGI are as follows:Traditional photography typically charges a full days cost as a minimum,whereas CGI costs are associated with the number and complexity of 3D models produced.Unli

70、ke traditional photography,CGI photography does not require transportation,equipment,product sample shipping,styling and studio rental costs.While images from traditional photography are single-use,CGI photography can produce unlimited images from a single 3D model,making scaling more cost-effective

71、.After cost,a lack of awareness and understanding are the primary barriers to CGI adoption.Among the surveyed brands and retailers that are not currently investing in CGI,43%cite a lack of knowledge of how to use CGI to produce product visuals as a reason for their lack of investment,and 35%cite tha

72、t they are not aware of CGIs benefits.Solution providers offer a cost-effective alternative to investing in head count and hardware to implement CGI visuals.5.Benefits to Retailers of CGI Leading brands and retailers have been using CGI to create photorealistic visuals at speed to better drive sales

73、 conversion,and this is supported by our survey findings.Among those investing in CGI for product visuals,all brands and retailers think that CGI has benefited their production and management of product visuals to some extentwith 49%reporting“significant”benefits.We expect this percentage to rise ov

74、er time as more brands and retailers invest in CGI and realize its benefits.The topmost benefits,cited by around half of brands and retailers investing in CGI,are returns reduction(as we discussed earlier)and improved speed to market.In addition,44%think it improves the effectiveness of social media

75、 marketing.As 3D models are reusable and easily configurable,it becomes easier for brands and retailers to edit product visuals and create different variants of the same product more quickly,which is useful for managing visuals across different channels.Brands and retailers also find CGI beneficial

76、in increasing sales conversion(cited by 43%),which is related to the fact that CGI helps to facilitate A/B tests by producing multiple product visual assets in a short time.From our survey,43%of Among those investing in CGI for product visuals,all brands and retailers think that CGI has benefited th

77、eir production and management of product visuals to some extentwith 49%reporting“significant”benefits.11 Deep Dive February 16,2023 Deborah Weinswig,CEO and Founder,Coresight Research| Copyright 2023 Coresight Research.All rights reserved.brands and retailers currently investing in CGI think it impr

78、oves their ability to A/B test product visuals.However,relatively few brands and retailers recognize that CGI also has a sustainability aspect:only 39%of brands and retailers investing in CGI think it improves their carbon footprint.CGI,which enables the creation of product visuals without the need

79、for physical samples,can also reduce resource waste and the production of excess inventory.To be recognized as a sustainable company,which modern consumers favor,brands and retailers can use CGI to help reduce their environmental impact.Figure 8.Perceived Benefits of Investing in CGI(%of Respondents

80、)Base:78 brands and retailers in the US and Western Europe that are currently investing in CGI Source:Coresight Research 6.The Multiplicative Effect of Layering AI on CGI for Visual Merchandising AI,which includes machine learning(ML),is starting to attract brands and retailers attention as they rec

81、ognize its benefits when coupled with CGI.While just 30%of brands and retailers are currently investing in AI to automate product visual content in online channels,more than two-thirds(68%)are planning to do so in the future.Comparing investment across retail verticals,furniture/home-furnishing and

82、big-box retailers/mass merchandisers are leading on current investment,followed by CPG.Currently,AI is mainly used to help in decision-making and to generate simple CGI models.However,as AI and ML continue to evolve,the technology Through 3D models,CGI creates new product visuals quickly and support

83、s consumer confidence in their purchase decisions AI,which includes ML,is starting to attract brands and retailers attention as they recognize its benefits when coupled with CGI.29%31%36%38%39%40%43%44%49%52%Lowers overall costsIncreases the reusability of productvisualsImproves e-commerce profitabi

84、lityImproves the effectiveness of thecompanys email marketingImproves the companys carbonfootprintIncreases sales conversionImproves the companys ability toA/B test product visualsImproves the effectiveness of socialmedia marketingImproves speed to marketReduces product returns 12 Deep Dive February

85、 16,2023 Deborah Weinswig,CEO and Founder,Coresight Research| Copyright 2023 Coresight Research.All rights reserved.will be able to generate complex shapes and 3D models without human effortwhich will become a must-have for faster CGI development.Figure 9.Companies Current Investment and Plans To In

86、vest in AI To Automate Product Visual Content on Online Channels,by Region and Retail Vertical(%of Respondents in Each Subset)Base:193 brands and retailers based in the US and Western Europe Source:Coresight Research There are multiple benefits of AI for producing and managing product visuals,when a

87、pplied to CGI:AI can speed up CGI processes by automating the creation of 3D models rather than requiring human intervention.Nvidia,for instance,announced the launch of the Magic3D text-to-3D content creation tool in November 2022.The tool generates 3D models from text descriptions through generativ

88、e AI,using ML algorithms.AI can automatically pair products that go well together,picturing them together in a contextual scene to increase cross-selling opportunities.AI can automate processes of enhancing product image quality,including erasing backgrounds and correcting lighting.The idea of fusin

89、g AI into automating product visual content is still new,so early adopters of the technology will gain a competitive edge in the online channel.What We Think In e-commerce,product images are the equivalent of a product display in the storefront on the high street.Brands and retailers can improve sho

90、pper engagement online and better promote their products using next-generation product imagery,including lifestyle and interactive images.CGI can also support brands in making their online operations more dynamic and seamless across channels.CGI and 3D image creation are must-haves for brands and re

91、tailers product visualization strategies,offering multiple benefits over traditional photography,30%35%25%68%64%73%2%1%2%OverallUSWestern Europe33%25%33%67%73%64%0%2%3%Furniture and home-furnishingCPGBig-boxretailer/massmerchandiser30%35%25%68%64%73%Currently investing inPlanning to invest in future

92、Dont know/Not sureBrands and retailers can improve shopper engagement online and better promote their products using next-generation product imagery,including lifestyle and interactive images.By Region By Retail Vertical 13 Deep Dive February 16,2023 Deborah Weinswig,CEO and Founder,Coresight Resear

93、ch| Copyright 2023 Coresight Research.All rights reserved.including speed to market,product returns reduction and increased sales conversion.The cost-saving benefits of CGI can also help brands and retailers survive in an era of macroeconomic turbulence.AI,an emerging topic in product visual creatio

94、n,can multiply the benefits of CGI through automation.Brands and retailers can work with solution providers that offer both CGI and AI technologies to further strengthen their automation capabilities,enabling them to deliver more seamless and personalized visual experiences to consumers.By working w

95、ith a solution provider,brands and retailers may find that CGI in e-commerce visual merchandising is easier and more cost-effective than they may have previously believed.Methodology This study is based on the analysis of data from an online survey of 193 executives across brands and retailers in th

96、e US and Western Europe(UK,France and Germany).Coresight Research conducted the survey on December 1327,2022.Respondents in the survey satisfied the following criteria:Brands and retailers that sell products online Annual revenue:$50 million or above Retail sector:furniture and home furnishing,consu

97、mer packaged goods or big-box retailer/merchandiser Role:Directors or above who are familiar with how their companies manage,produce and publish product visuals Business function:creative/design,digital/e-commerce,merchandising,marketing,innovation and product management About Coresight Research Cus

98、tom Reports Coresight Research Custom Reports are produced as part of commercial partnerships with leading firms in the retail,technology and startup ecosystems.These Custom Reports present expert analysis and proprietary data on key topics in the retail,technology and related industries,and enable

99、partner companies to communicate their brand and messaging to a wider audience within the context of brand-relevant research.This Custom Report is produced in partnership with Nfinite,a visual e-merchandising SaaS platform.For more information,visit Nfinite.app.New York Hong Kong Lagos London Mangaluru(India)Shanghai C Deborah Weinswig,CPA CEO and Founder Coresight Research Terence Ng Senior Analyst Steven Winnick Senior Analyst