Retail Analytics Market Size, Share and Covid-19 Impact Analysis, By Type (Software and Services), By Deployment (On-Premise and Cloud), By Retail Store Type (Hypermarkets and Supermarkets, and Retail Chains), By Function (Customer Management, Supply Chain Management, Merchandising, In-Store Operations, and Strategy & Planning) and Regional Forecast, 2020-2027

The global retail analytics market size stood at USD 4.12 billion in 2019 and is projected to reach USD 17.84 billion by 2027, exhibiting a CAGR of 21.4% during the forecast period.

The retail industry is showcasing an ideal shift. Changing customer expectations and technological developments are rapidly revolving the retail landscape day by day. Consumers are demanding rich shopping experiences that are hyper-connected, personalized, and engaging. The expansion of sales and marketing channels such as social commerce and mobile are transforming the trends of the retail industry.

The developed technology allows retailers to bring this entire suite of necessary solutions and services on a single platform, which is called a retail analytics platform. This tool increases inventory productivity by informing the decisions across the retail enterprise with intuitive dashboards. The tool helps to understand what induces customers to buy products or services and take actions to drive conversations. In conclusion, the retail analytical tool accelerates business performance through meaningful insights. The explosion of software-defined infrastructure, data, connected devices, and cloud-enabled solutions are directing the retailers to adopt an analytical platform. Such a platform is transforming the infrastructure of retail by optimizing inventory, supply chain networks, in-store operations, and payment platforms. At the same time, the retailers are using analytics to improve their core operations. Further, the retail analytical tools examine customer views towards product and service to optimize their  interaction and experience.

Retail analytical insights are gaining traction in the industry due to their set of beneficial features such as streamlining internal processes, identifying new revenue generation opportunities, and building mechanisms for continuous learning and feedback. Advanced retail solutions optimized with artificial intelligence (AI) is expected to provide opportunities to enhance sales and revenue using data sources. The retailers are embracing such intelligent technologies to attain a significant competitive advantage, thereby driving the retail analytics market growth.

• For instance, Microsoft Corporation cited in a blog published in October 2017 that the retail companies that make use of their data are probable to gather additional revenue over those companies that don’t.

Impacts of COVID-19: Stress on Supply Chain & Rising Online Shopping

At present, the omnichannel commerce businesses are rapidly reducing their physical store presence and are focusing on the virtual presence through e-commerce or mobile apps. The COVID-19 pandemic has upsurged the e-commerce businesses, led by online grocery shopping. The growing online grocery shopping trend has augmented the demand for customer-level analytics. The global pandemic has sharply brought retailers to focus on the supply chain management.

The governments across the world urged people to stay at home and are implementing self-isolation which has further increased online shopping and placed an extreme stress on the supply chains. Owing to this, the suppliers and logistics providers across the supply chain have taken initiatives towards the adoption of artificial intelligence (AI) and smart analytics to manage the operations and business processes. Smart retail helps to keep the supply chain running safely and securely while meeting customers' demand.

• For example, Capgemini adopted a customer-driven supply chain that supports social, mobile, and cloud analytics. The system enables the prediction of future demand, personalized shipments, cooperation with partners and suppliers, overall optimizing the retail networks.

The retail industry has directed towards digital transformation for predominantly conducting online business during the COVID-19 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 an average growth rate during the pandemic.

LATEST TRENDS

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Multichannel Shopping Landscape is Currently Trending in the Market 

Analytics is the secret component of unified commerce. Data collected from all the available channels can improve customer experience and optimize retail operations. Out-of-stock merchandise and the same product available cheaper at another retail store are the key sources of customer dissatisfaction today. Adding multichannel analytics solutions helps the retailers to provide significant customer engagement through each touchpoint including social media, customer service emails, third party resellers, telephone websites, and many more.

The omnichannel retail analytics model comprises web scraping and classification models. The models are used to collect raw customer data and voices from different channels across various markets. This collected data enables the identification of key topics and subtopics for each voice. Although, it is used to recognize the product category and to conclude sentiment, analysis is done on data or voice. So, dealing with omnichannel retail solutions offers enhanced visibility with an interactive dashboard that helps retailers to augment customer engagement. The growing trend of omnichannel commerce is rapidly reducing the physical store, hence, pushing it into an app on a smartphone. It is surging the demand for mobile retail analytics tools.

The analytical platform is unifying the customer’s experience across multiple channels. On the other hand, it helps retailers by offering marketing opportunities. Hence, the rising trend and demand for multichannel retail platforms are set to upsurge the retail analytics market share value.

Personalization to Provide Better Customer Experience is a Prominent Trend

Many of the large retail chains and wholesalers are focusing on customer-centric data to deliver a personalized experience. Additionally, the people in developed countries are also showing interest in brands, as well as in a more personalized shopping experience. Thus, the retailers are now implementing analytical tools to get an in-depth understanding of the customers’ behavior to predict their views or interests. Thoughtful learning about their behavior allows the retailers to develop tailored and personalized products and services to enhance their shopping experience. This analytics platform helps to monitor and understand the customer behavior and predict the solutions using advanced technologies to satisfy them. Hyper-personalization can be achieved through deep retail insights and major players have already mastered the importance of customized offerings.

• For instance, The American beauty brand, Fashion of Beauty offers personalized hair care for their customers. Therefore, the trend of personalized offerings significantly impacts the adoption of analytics platforms.

DRIVING FACTORS

Emergence of Artificial Intelligence (AI) and Machine Learning (ML) to Propel Growth

Advanced technologies offer the potential to attain a variety of business goals including supplier management, customer value, and optimized revenue generation. Artificial intelligence (AI) and machine learning (ML) can offer retailers intelligent insights that can enhance the sales along with customer experience. The features offered by AI, big data analytics, and machine learning will be anticipated to drive the market growth.

The integration of retail analytical platforms with artificial intelligence helps to gain insights from big data on retail to optimize business operations and customer experience. It offers enhanced product recommendations based on the results of customer data analytics. The capability to track data from customer contacts with online channels improves e-commerce strategies. Further, AI optimizes the supply chain, improves product development, and corrects inventory distortion. Therefore, an intelligent AI-based retail platform is expected to drive the market growth in the coming years.

Retailers can use machine learning and data analytics to analyze the data and draw insights about the quantity, sales, and price to reach the target customers. The analytics helps retailers to predict the future conditions and to efficiently manage the transportation and supply chain components.

Increasing Demand for Cognitive Computing to Drive this Global Market

The majority of key players are offering retail solutions with the cloud, as well as the edge computing model, which builds intelligence to make better decisions. An open-source middleware of edge computing offers the framework desirable to integrate the data from different sources.

Analyzing and accumulating data in the cloud is ultimate for merchandising analytics, predictive analytics, and other types of customer analytics. The strategies developed through these analytics help retailers understand long-standing trends and make predictions. For instance, retailers can feed data into cloud-based predictive analytics software to achieve precise demand planning and understand the revolutions between the store-to-store performance and customer preferences. The cloud model of this type of analytics is used to notify targeted and localized marketing campaigns.

The modern edge computing is bringing AI and analytics to the brick-and-mortar stores. With the help of edge computing, retailers are allowed to collect, store, and analyze the data locally. Edge computing facilitates keeping sensitive data near its source to comply with data privacy and data locality regulations. Although, it offers retailers a cost-optimized data transmission solution, it enables real-time analytics and reduces latency, as well. Hence, the edge computing model can also be favorable by the localized retailers.

RESTRAINING FACTORS

Stringent Data Regulations Imposed by Governments May Affect Adoption

General Data Protection Regulation (GDPR) is going to put an effect shortly on the retail solutions that use big data technology. Without solving the break of data privacy, no retailer would be able to take efficient advantages even after incorporating big data services in their business module. It is becoming challenging for retailers to attain desirable goals despite the security protocols made by the data privacy regulations. Not all regulations, but few of them are directly impacting the way multinational companies and international retailers are conducting their businesses. Many of the retail sectors need to adapt their operations as per the requirement of these regulations. So, the complexity in the adapting operations as per the new regulations reduces reliability, that indirectly affecting the adoption of retail platforms.

Retail analytics is mainly reliant on the consent to data processing and the rights of data access, rectification, and deletion. However, the volatile regulations often drastically change the way of collecting and using data. Additionally, it limits the retailers to offer more personalized experience as the regulations restrict to attain sufficient data.  

SEGMENTATION

By Type Analysis

Software Segments is Anticipated to Generate High Revenue During the Forecasting Period

By type, the Retail Analytics market is classified into software and services, among which the software segment is expected to dominate the market in terms of revenue.

The growing competition and customer expectations has led the retail industry to adopt automation. Retail software is becoming a powerful engine of the retail automation infrastructure. The software enables the organizations to modify the customer’s information to an information database. The retail analytical software model provides a well-connected dynamic planning and forecasting platform for the retailers as per the needs of the business and the customers. The advanced retail analytical software offers visualization, ad-hoc functions, and many more mobility advantages. These offerings enable the organizations to understand the current market trends and customers' experience to upgrade the performance. The advantageous factors such as faster data collection, real-time data visualization, and access to cross channel sales analytics would propel the demand for the retail software. The capability to analyze the effects of the merchandising strategy and receive real-time notifications and alerts about the taken actions would lead to stronger adoption rate.

On the other hand, cloud computing offers the facility to drive the growth of the retail analytics software as a service. But, many installation and maintenance services would also significantly drive the market growth in terms of revenue. The development of a secure and agile retail cloud to manage all the retail functionalities is set to drive the market moderately.

By Deployment Analysis

Growing Need for Real-time and Automated Solutions to Increase the Demand for Cloud Deployment

By deployment type, this market is segmented into on-premise and cloud.

Current innovations in the retail landscape often combine the cloud, as well as the hybrid-cloud solutions with advanced data analytics to make the businesses more and more competitive. The cloud establishes a highly scalable and pay-for-use subscription model which is becoming favorable across the smaller retail chains. The developed cloud-based analytics platform offers a higher level of privacy, user-friendliness, security, and compliance which is gaining traction in the retail industry. Further, it offers the facility to meaningfully use the analytical data for attaining greater business intelligence, which provides a more competitive advantage.

On the other hand, the traditional on-premise analytical models are also expecting to showcase an average adoption due to their security assurance. The growing cyberattacks on cloud would lead the retailers to pay attention to the on-premise retail software. Thus, the cloud segment will exhibit a higher CAGR, but still, the average adoption of on-premise retail analytics will continue.

By Retail Store Type  Analysis

Hypermarkets & Supermarkets Segment to Grow Rapidly Owing to Rising Adoption of Cloud-based Software Solutions

By retail store type, the market is categorized into hypermarkets or supermarkets and retail chains.

The international retail giants such as Walmart, Kroger, and others are majorly focusing on strengthening their customer base by enhancing the customer experience. Based on the mall or retail store area, the need for efficient in-store operation management increases. The growing brand and pricing competition are enforcing the hypermarkets to adopt the analytics platform, which would help to maintain the inventory, supply chain, in-store operations, and strategies for augmenting the customer base.

With the proliferation of technology and the availability of cost-effective analytical solutions, many of the small and medium retail chains are expected to adopt retail solutions in the coming years. The cloud-based pay-per-use model is continuously escalating the adoption of retail analytics across the small hypermarkets and supermarkets. So, the hypermarkets and supermarkets segment is anticipated to showcase the highest growth rate during the forecasting period. 

By Function Analysis

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Supply Chain Management Segment to Exhibit Highest Growth in the Coming Years

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

Retailers have to take inventory decisions and also invest time to strategically align the supply and demand of the products. To manage the inventory, align supply & demand, reduce excess inventory, and offer a better customer experience, retailers are adopting analytics software. The growing investment from retailers is expected to enhance the operational efficiency of the supply chain that would aid the market growth. Additionally, the delivery issues are caused due to the lack of an integrated end-to-end logistics platform, thus retailers uses retail analytics to eliminate delivery issues. The challenges around third-party logistics interactions and reverse logistics management are the barriers to retail growth. Further, the continuous expansion of the product portfolio and planned discount sales have been creating difficulties. Retail analytics software helps retailers to control the on-ground fleet management and logistics through route and network optimization. Henceforth, the supply chain management segment is expected to drive the major market growth.

To generate higher revenue throughout the product life cycle, an appropriate strategy and planning is required. Analytical platforms offer meaningful insights and interactive dashboards which help to plan the next step strategy, which will be beneficial. Pricing analytics, profit leakage analytics, product analytics, and promotion analytics are delivering an entire view of the product life cycle and addressing how to manage it. Besides, the advanced artificial intelligence has made the retail analytical platforms smarter about driving the proper planning or strategy to generate better revenue and reduce loss. Hence, AI is expected to empower the adoption of analytics for strategy and planning purposes.

Customer management, in-store operations, and the growing merchandising are also expecting to drive the future market growth. The changing customer' demand is the key factor to drive better sales and revenue. Therefore, the majority of the retail chains are focusing on the customer's satisfaction, which, in turn, is leading them to adopt the platform. Merchandising helps to stock the right product at the right time and the right place. It enables the retailers to line up their merchandising decisions as per the customer expectations. The significant areas of merchandising analytics are product adjacency, space allocation, and assortment planning.

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 market is segmented across five major regions, namely, North America, Europe, Asia Pacific, the Middle East & Africa, and Latin America. They are further categorized into countries.

North America dominates the market as the region has been adopting an advanced solution for the retail sector for decades. Most of the large hypermarkets, supermarkets, and retail chains are showcasing their presence across the North American countries. The large retail market giants such as Walmart, Kroger, and the others have majorly adopted retail analytical solutions to compete with the other retail chains. The growing customer's approach towards customized and personalized shopping experience would lead the retailers to adopt analytics platforms, further enhancing their customer base. The ongoing online shopping trends also contribute to the market growth across North America. Further, the rapid deployment of e-commerce is expected to help the region continue its dominance in the coming years.

Europe is showcasing the presence of a large number of top retailers. The retailers from the largest markets in Europe including Germany, France, Italy, and Spain are the major contributors to the growth of the retail solutions. The European Union’s General Data Protection Regulation (GDPR) significantly helps to bring analytics-driven insights to the market much faster than the other regions. Major retailers across the region are adopting retail analytics platforms for understanding the customer’s product views, which would help to improve their loyalty. The adoption of cloud-based and affordable retail platforms in Italy and France is driving the market growth across Europe.

The presence of the top retailers such as Walmart across the highly populated countries is maturing the market across Brazil, Argentina, and Mexico. Technological advancements across the retail industry of Latin America demonstrating sufficient market growth.

Asia Pacific (APAC) is expected to showcase good growth in the near future. Growing penetration of broadband internet services and smartphones would drive the market growth. The presence of the developing economies in this region would attract major retailers to invest in expanding the business across the region. Although, to stay ahead in the competition, China, Australia, Japan, and many more Asian countries have adopted retail analytical platforms. Therefore, the developing countries from Asia are exhibiting opportunities to drive this market growth in the coming years.

Further, the modernization and technological developments in recent years would lead the Middle East and Africa (MEA) to adopt advanced retail platforms. Besides, the digital transformation of retail chains is expected to drive future market growth across the MEA.

KEY INDUSTRY PLAYERS

Oracle Corporation Focusing on Strengthening their Position by Providing Advanced Analytics Solutions to the Retailers

Oracle Corporation is one of the major players delivering advanced retail solutions to the retailers. The company is focusing on the development of its retail solutions platform by introducing technologies such as cloud, predictive analytics, artificial intelligence (AI), and many more. The company is strengthening its retail solution platform by combining multiple retail solutions and services on the Oracle Retail Solution Suite.  The company is offering customized standalone services apart from the suite. Real-time engagement and merchandising facilities have made the Oracle retail solution platform favorable across the world. The company would expand its business portfolio by offering technologically advanced, customized, on-demand, as well as cloud-based retail analytical solutions and services.

• May 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 availability for customers. The solution is expected to provide full visibility about the inventory availability across all channels, which would help to decrease the transfer costs and increase stock rotation.


• March 2020 - De Beers Jewellers based in London, the U.K. adopted a combination of Oracle retail solutions to enhance the customer experience. The company has implemented Oracle Retail Xstore Office Cloud Service and Oracle Retail Xstore Point of Service to augment the customer’s experience, as well as to achieve operational efficiency.


• October 2018 – Oracle Corporation enhanced its Oracle Retail Insights Cloud Service Suite by combining three new services into the cloud. The enhancement will provide a spectrum of analytics that would support key performance indicators for the retail industry. The advanced cloud service suite offers advantageous features such as a better understanding of the customer context, revealing merchandising intelligence, leveraging artificial intelligence and machine learning, speed to value, and augmented user relevance and experience.

Key Players are Enhancing Product Portfolio to Strengthen Market Position

Several key players are focusing on the continuous enhancement of their retail analytical solution by leveraging advanced cloud computing, artificial intelligence (AI), internet of things (IoT), and machine learning. The cloud-based, real-time analytical models of retail analytics would effectively upsurge the customer experience. Further, the customized retail insights solution offerings would strengthen the market position of these key players. Strategic partnerships, acquisitions, and collaborations are expanding their business geographically and would, therefore aid in the financial performance of the market players.

• October 2018: Information Resources, Inc. launched the advanced version of its online sales measurement and insights solution named E-Market Insights 3.0. The latest E-Market Insights platform will be added in the E-Commerce solution suite and will offer the largest E-shopper database, greater product accuracy, expanded coverage of the merchants, unmatched granularity, and many more advanced features. 


• May 2018: Intelligence Retail collaborated with IBM Corporation to enhance its real-time analytics solution. The enhanced solution will allow the customers to pursue the key store audit indicators in real-time. 

List of Key Companies Profiled:

• ALTEN Calsoft Labs Private Limited


• FLIR Systems, Inc.


• Fractal Analytics Inc


• HCL Technologies Limited


• IBM Corporation


• Microsoft Corporation


• Oracle Corporation


• QlikTech International A.B.


• Salesforce.com, Inc.


• SAP SE


• Tableau Software, LLC


• Wipro Limited

KEY INDUSTRY DEVELOPMENTS:

• December 2019: Symphony RetailAI and SPINS, LLC. collaborated to integrate the SPINS product intelligence into the company’s CINDE sales and customer insights platform. The integration is expected to help retailers to understand the consumers’ purchasing behaviors.


• October 2019: SAP SE extended its partnership with GK Software SE to strengthen its retail industry offerings using innovative technologies, such as artificial intelligence, cloud computing, mobile applications, and many more.   

REPORT COVERAGE

An Infographic Representation of Retail Analytics Market

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The retail analytics market report offers qualitative and quantitative insights on the industry and the detailed analysis of market size & growth rate for all possible segments.  Along with this, the market research report provides an elaborative analysis of the market dynamics, emerging trends, and competitive landscape.

Key insights provided in the report are the adoption trends by individual segments, recent industry developments such as mergers & acquisitions, consolidated SWOT analysis of key players, partnerships, Porter’s five forces analysis, and business strategies of leading market players, key industry trends, macro, and micro-economic indicators.

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