Retail Analytics Market Size, Share & COVID-19 Impact Analysis, By Type (Software, and Services), By Deployment (On-Premise, and Cloud), By Retail Store Type (Hypermarkets & Supermarkets, and Retail Chains), By Function (Customer Management, Supply Chain Management, Merchandising, Strategy & Planning, and In-store Operations), and Regional Forecast, 2021-2028

The global retail analytics market size was USD 5.20 billion in 2020. The global impact of COVID-19 has been unprecedented and staggering, with retail analytics witnessing a negative impact on demand across all regions amid the pandemic. Based on our analysis, the global market exhibited a significant growth of 11.7% in 2020 as compared to the average year-on-year growth during 2017-2019. The market is projected to grow from USD 5.84 billion in 2021 to USD 18.33 billion in 2028, growing at a CAGR of 17.7% in the 2021-2028 period. The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.

Retail analytics encompasses advanced technologies like data mining and big data to analyze the vast dataset and conclude meaningful business insights. It helps businesses to draw effective strategies for their activities based on the customer behavior pattern. The growing need to optimize revenue generation, sales performance, identify customer preferences and market trends are likely to drive the market growth. The retail solutions optimized with artificial intelligence (AI) can offer intelligent insights that can enhance sales along with customer experience. For instance, in May 2021, Walmart implemented the RetailAI solution to boost the self-service shopping experience along with lowering its operational cost.

COVID Impact

Rising Online Shopping amid COVID-19 Pandemic Fueled Retail Analytics Solution Demand

The physical retail stores are rapidly shifting on the virtual store through e-commerce and mobile apps owing to the outbreak of coronavirus. The COVID-19 pandemic has upsurge the e-commerce businesses, led by online grocery shopping. The growing online shopping trend has augmented the demand for customer-level analytics. Also, due to limited logistics services and the rise in online demand, various retailers implemented advanced solutions to track inventory and supply chains.

Governments across the world urged people to stay at home and are implementing social distancing protocols which have further increased online shopping. This has drastically boosted the demand for retail analytics during the pandemic. For instance, in May 2021, Walmart implemented an analytical solution on its consumer data from stores to boost its e-commerce business. This has resulted in a 97% hike in the annual growth of the company in Q2 2021. The adoption of smart retail tools and the database of its stores has helped Walmart in outpacing leading e-retailers. Similarly, during the pandemic, many of the market players have started offering solutions for efficient product supply, intelligent in-store management, financial forecasting, and customer demand forecasting. Therefore, the global market is estimated to showcase a significant growth rate during the pandemic.  

LATEST TRENDS

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Surging Focus on Product Inventory Management & Shelf Space Allocation is Vital Trend

Product inventory and shelf space allocation are the key resources of a retailer. It refers to the use of analytics to determine product offerings at the right place in the right quantity for the right customers. This trend has now become a continuous process in the retail industry in regards to micro-level analysis and assortment planning. Shelf space management is being analyzed concerning the specific preference of customers in the store and the financial impact of various assortments. For instance,

• In March 2021, European companies Trax Ltd. and Roamler collaborated to provide store auditing services for consumer packaged goods (CPG) companies. The companies continuously capture the shelf images and offer insights and shelf conditions. It helps in improving the on-shelf availability of the products and enables the retailers to access timely insights and take decisions to improve shopper experiences.

Thus, the growing trend of managing shelf space and product inventory in retail stores is expected to drive the demand for retail analytics in the future.

DRIVING FACTORS

Increasing Integration of Advanced Technologies to Drive Market Growth

The retail sector is assumed to be one of the largest sectors to implement advanced technologies such as artificial intelligence, Blockchain, machine learning, and others. AI offers improved data management, personalized experience, predictive analysis ability, and real-time assistance. Other applications of AI, such as chatbots, virtual assistants, and more, are supporting the retailer to stay connected with the customers. This streamlines the business workflow by handling several requests automatically and improves companies’ profitability by informing customers about the promotions and sales. AI has enabled personalized customer experience by collecting data from purchase history and analyzing it to help retailers make a better customer experience. For instance,

• In November 2018, Microsoft Corporation and Nielsen Consumer LLC collaborated to implement artificial intelligence-powered data analytics for the retail industry. This collaboration helps retailers in mapping insights to spot new trends, opportunities, diagnose performance gaps, and faster growth. 

Similarly, Blockchain makes the retail life cycle more enhanced, reliable, efficient, and faster than regular traditional practices. It helps retailers with cloud storage, strengthens supply chain management, enables the businesses to run a loyalty program, among others. Thus, these advanced technologies are further likely to fuel retail analytics market growth.

RESTRAINING FACTORS

Stringent Data Regulations May Restrain Market Growth

The implementation of the General Data Protection Regulation (GDPR) is affecting the retail solutions that use big data technology. It has become challenging for retailers to gain access to the customer's personal data owing to the security protocols made by the data privacy regulations. The growing awareness regarding consumer privacy in retail is hampering many multinational companies and international retailers’ businesses. Further, it limits the retailers to offer more personalized experiences as the regulations restrict to attain sufficient data. Thus, the complexity in adapting tools as per the regulations reduces reliability, indirectly affecting the adoption of retail platforms.

SEGMENTATION

By Type Analysis

Growing Focus on Personalized Customer Experience to Fuel Software Segment

By type, the retail analytics market is segmented into software and services, among which the software is expected to dominate the market share. It enables businesses to analyze the customer’s data to gain insights. Its functionalities help the organization to gain a deeper understanding of the current global market trends and experience a certain level of enhanced performance. Services are expected to gain rapid demand as it helps the retailers and store managers in installing, managing, and professional services for its implementation.   

By Deployment Analysis

Real-time Assistance Capabilities to Surge Cloud-based Segment

By deployment type, the market is bifurcated into on-premises and cloud. Cloud is expected to dominate the market share with rapid CAGR. Its real-time assistance and insights help in boosting customer satisfaction while shopping. Further, it offers a competitive edge to use the analytical data for attaining greater business intelligence with user-friendliness, security, and safety compliance.

On the other hand, the traditional on-premises analytical models are also expecting to showcase an average adoption due to their security assurance. The growing cyberattacks on the cloud would lead the retailers to deploy the on-premises retail software.

By Retail Store Type Analysis

Complex Inventory Management to Drive Demand for Analytics in Retail Chains

By retail store type, this market is categorized into hypermarkets & supermarkets and retail chains.

Retail chains are expected to dominate the market share. The international retail giants such as Walmart, Kroger, and others are strengthening their customer base by enhancing the customer experience. The solution is helping chains in maintaining the inventory, supply chain, in-store operations, and strategies for augmenting the business. For instance, in March 2020, the European multi-brand fashion retailer Sportina Group adopted the Oracle cloud-based retail solution to break down the obstacles between brands and geographies, consecutively optimizing the inventory available for customers.

Similarly, hypermarkets and supermarkets are shifting towards advanced retail tools. Its support in shelf management, inventory management, supply chain, customer experience, and more is likely to surge the demand for retail analytics in supermarkets.

By Function Analysis

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High Demand for Customer Satisfaction to Boost Customer Management Segment

Based on the functionality, the market is segmented into customer management, supply chain management, merchandising, strategy & planning, and in-store operations.

Customer management is expected to gain maximum segment share during the forecast period. The changing customer demand is the key factor to drive better sales and revenue. Therefore, the majority of the retail chains are focusing on implementing analytical tools to understand the customers’ preferences and overall market trends. Similarly, the demand for the solution is growing for merchandising. It enables the retailers to line up their merchandising decisions as per the customer's expectations.

Strategy and planning are expected to witness rapid growth in the market during the forecast period. Analytical platforms offer meaningful insights and interactive dashboards, which help to plan the next step strategy, which will be beneficial. Similarly, the solution helps retailers control the on-ground fleet management and logistics through route and network optimization. Henceforth, the supply chain management segment is expected to gain steady growth.

Similarly, the factors such as staff management, inventory management, pricing management, and many more are also affecting the overall performance of retail. So, the retail analytics models are helping to optimize the in-store operations and staff performance, which would contribute to the business growth.

REGIONAL INSIGHTS

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Geographically, the retail analytics market is fragmented into five major regions, such as North America, Europe, Asia Pacific, the Middle East & Africa, and Latin America. They are further categorized into countries.

North America is anticipated to emerge as a dominant region in the global retail analytics industry during the forecast period. The rapid adoption of e-commerce services by many organizations across the region is likely to drive market growth. Further, retailers present in the United States and Canada are adopting advanced technology to provide advanced customer experience, improve decision making, operational efficiency and identify trends in the market.

Asia Pacific is set to witness remarkable growth in the market. The growing online shopping and consumer connection drive the adoption of analytical tools in China, India, Singapore, Japan, and more Asian countries. The mobile connectivity, digitalization, rise of e-commerce and social commerce among others is expected to offer vast growth opportunity for the market.

Europe is expected to gain significant growth during the forecast period. The retailers from Germany, France, Italy, and Spain are the major contributors to the growth of retail solutions. For instance, in March 2020, U.K.-based De Beers Jewelers adopted a combination of Oracle retail solutions to enhance the customer experience.

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The Middle East and Africa is set to showcase steady growth owing to the increasing investments in the technologically advanced retail industry. With the digital data explosion and big data development, companies such as Microsoft Corporation and Reliance Industries are investing in the retail uplift industry. Similarly, the growing digital transformation in Latin America’s retail industry boosts market opportunities.

KEY INDUSTRY PLAYERS

Continuous Developments is the Key Strategy of Companies to Strengthen Positions

The key players in the market are keen on integrating advanced technologies such as artificial intelligence, machine learning, cloud computing, Blockchain, and more with the retail analytics solution. Through these advances, the vendors are aiming to offer dedicated analytics tools to upsurge the customer experience. The major players are launching new and innovative solutions to build the dominant market position.

June 2021 – Wipro Limited collaborated with a leading brand-name apparel company Levi Strauss & Co., to enhance user experience and customer satisfaction through its solution and experience in the retail sector. The store to implement all the AI-based retail tools from Wipro across all its channels.

May 2021 – Nielsen Consumer LLC launched retail analytics customer intelligence platform, Byzzer for emerging and small consumer packaged goods (CPG) enterprises. The platform offers trending CPG brand needs and actionable retail insights to enhance growth.

LIST OF KEY COMPANIES PROFILED:

• Microsoft Corporation (Washington, United States)


• HCL Technologies Limited (Uttar Pradesh, India)


• FLIR Systems, Inc. (Oregon, United States)


• IBM Corporation (New York, United States)


• Oracle Corporation (Texas, United States)


• SAP SE (Walldorf, Germany)


• QlikTech International A.B. (Pennsylvania, United States)


• Fractal Analytics Inc. (New York, United States)


• Wipro Limited (Bangalore, India)


• Nielsen Consumer LLC (Illinois, United States)

KEY INDUSTRY DEVELOPMENTS:

• March 2020 – Wipro Limited and SAP SE to co-develop solutions for fashion and retail industries to manage customer experience and business processes from manufacturing to in-store merchandising. The SAP S/4HANA implementations are expected to support Wipro in delivering specific industry solutions.


• January 2021 – Microsoft Corporation launched cloud technology for the retail industry. Through the Microsoft Cloud, the digital solution can provide advanced support to the stores and retailers with the better-known customer, resilient supply chain, prompt delivery, and empowered employees. 

REPORT COVERAGE

An Infographic Representation of Retail Analytics Market

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The global retail analytics market report highlights leading regions across the world to offer a better understanding of the user. Furthermore, it provides insights into the latest industry and market trends and analyzes technologies deployed at a rapid pace at the global level. It further highlights some of the growth-stimulating factors and restraints, helping the reader gain in-depth knowledge about the market.

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