The images that you use on your ecommerce website are very important and need to be high quality and optimized for use on a website.
You should only used jpg or png images on your website as these can be optimized for use on a website.
Images that are too large will slow down your website page load times and this will frustrate customers. This also impacts on your pages SEO effectivness as well and should be avoided.
Ideally you should have various image sizes created so that you can use thumbnail, mid sized and full sized images where appropriate and that the sizes should be optimized for the situation eg if your thumbnails are only shown as 150px by 150px then create the thumbnail image as this actual size rather than using a larger image that will be loaded (taking more time to load due to its size) but only shown at the smaller size.
You should have attempt to provide images for all products and multiple images where available to give as much information to customers as possible and to enhance their visit to your website.
Images used for categories, products and all other general images and logos need to be high quality so that it adds to the customer experience when using your ecommerce website. Poor images can lead to customers exiting from your website as they feel that the site is not worth dealing with.
I also encourage you to use special image effects & enhancements on your website to increase the customers experience – using banners, image sliders, mouse over and other effects gives the customer a visually stimulating experience and is a great marketing and sales tool. These can be implemented by good developers and still keep your page load size & time to a acceptable level.
It also shows to customers that you are serious about your website and that the want to offer the highest level of visual presentation and information about your business & its products and services. The goal is to drive more traffic to your website, have high levels of repeat customers and make more sales.