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The global retail analytics market size was valued at USD 3,494.6 Million in 2018 is projected to reach USD 13,299.6 Million by 2026, exhibiting a CAGR of 19.2% during the forecast period (2019 – 2026)
Today, Analytics is a driving force behind every successful business. Retail analytics is a process that focuses on providing analytical and actionable insights related to sales, supply chain management, customer demands, inventories, and other critical aspects of retail which are pivotal for organizations to make profitable marketing and procurement decisions. Retail analytics are used to make efficient business decisions and deliver enhanced customer service analytics.
In the current global market scenario, there is a need to optimize traditional retail practices with effective strategy and planning, optimized store operations, marketing, enhanced supply chain management, and merchandising. Each benefit could be achieved by implementing retail analytics. Retail analytics offer a retailer the ability to create and collect data, analysis, and decision-making process to significantly increase productivity and efficiency.
Retail analytics are integrated with the advanced technologies like data mining and big data analytics to analyze the vast dataset and conclude meaningful business insights which can be implemented by the organizations to strengthen their market position. Retail analytics has boosted the e-commerce business such as enormous customer database, more searched items, items added to cart, the number of purchased items are easily accessible.
Retail analytics help the businesses to draw effective strategy for their activities based on the customer behavior pattern. Analytics allow retailers to know exactly what the customer wants and offer similar services and sales at affordable prices. Retail analytics enable enhanced store optimization, including space optimization, stock management, supply chain, etc. Additionally, retail analytics help to gain customer satisfaction, which is an essential factor for the organization to maintain long-lasting customer relationship.
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The current retail analytics market trends are assortment optimization and space allocation. In short, to determine which products should be offered in what quantities using analytics. Similarly, customer-driven marketing, which means to use the customer data to segment and target personal offerings, fraud detection and prevention, and integrated forecasting that is using statistical forecast data to drive multiple functions and others.
"The Emergence of Machine Learning for Data Analysis likely to propel the global market"
Technologies have the potential to be applied to a wide variety of retailer business goals, including optimized revenue generation, supplier management, customer value, etc. The developments in advanced technologies such as big data analytics and machine learning have dramatically influenced the retail analytics market growth.
Integration of advanced technologies such as big data analytics, machine learning, and artificial intelligence, with retail analytics, would lower the number of people required to identify trends, developments, and make recommendations. Big data would help retailers to identify and create client profiles, prize optimization, and generating customer loyalty programs based on data and Inventory management.
For instance, retailers can use Machine learning and data analytics to analyze the data and draw insights regarding the quantity, price, and sales to reach the target customer. Based on the analysis, the retailers would predict future conditions and can take steps to effectively manage transportation and other supply chain management factors.
"The increasing need for In-Store analytics to drive the global retail analytics market"
The increasing need for in-store analytics, cost-effective media, and data-driven decision-making process are some of the key factors to drive the global market revenue. In-store analytics is the process of finding actionable and meaningful insights from customer data. Retailers use Wi-Fi networks to detect the number of customers visiting the store. This data could also provide demographic information such as gender and group. Based on this data, in-store analytics would establish a relationship between a retailer and the customer.
To provide novelty services to the customers and compete with online stores, retailers must have adequate information about their customers. In-store analytics would help the retailers to gain detailed insights about the store displays, employee activities, seasonal sales, and other important factors that could swing the customers shopping experience in the specific store.
Nowadays, media providers offer marketers to purchase media services wherever and whenever they need. This mass availability of media would provide various opportunities to the marketers to hyper-target customers, for example, location-specific advertising, newspaper advertising, and others with relevant and cost-effective media.
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"The Software segment would ensure to generate the highest revenue during the forecast period."
As with the help of advanced technologies, it is now possible to extract relevant information from the vast dataset, but at the same time, there is a need for organizations to use this data efficiently to implement effective actions based on the data and simultaneously make sure that the implemented measures are positively impacting the organizational progress. Here comes the need for automation in the Retail industry.
Retail Analytics software enables the organization to tailor the customers’ data to avoid excessive information, to have a limited informative database and security purpose as well. Software solutions for retail analytics would provide a well- connected, dynamic planning, and forecasting platform for the organizations.
Retail analytics software would provide ad-hoc functions, visualization, and other mobility advantages. These functionalities would help the organization to gain a deeper understanding of the current global market trends and experience a certain level of enhanced performance.
Software segment would ensure to hold the highest retail analytics market share in terms of revenue generation owing to the advantages including faster collection and visualization of heterogeneous business data, access to high- level and cross-channel sales analytics, ability to analyze the effects of merchandising strategy and receive real-time alerts and notification of undesired actions.
"Cloud-based deployment of retail analytics software is anticipated to exhibit a significant CAGR during the forecast period."
New and enhanced capabilities such as Blockchain and high- localized data points namely weather forecasting support increased operational efficiency in the retail industry to offer products and services to the customers. The proliferation of the smartphone has given rise to the social engagement of customers. This allows the organization to maintain contextual and relevant connectivity with the customers, employees, and suppliers.
Cloud-based retail analytics software help organizations to gain an in-depth understanding regarding the preferences, trends, and developments in the global market to apply effective and efficient marketing, merchandise, supply chain decisions by leveraging advanced technologies such as big data and analytics. Cloud-based retail analytics software offer benefits such as on-demand self-service, broad network access, flexible and dynamic resources, and rapid elasticity.
One more important feature in retail analytics software is the analytics dashboard. The retail dashboard is a tool to visualize and report all important aspects in one centralized interface and draw actionable insights from this data. The retail analytics dashboard empowers retailers to identify customer behavior and enhance profitability and productivity.
"Large enterprises to hold a leading position in the Retail analytics market in terms of revenue generation in the forecast period."
Large Enterprises are expected to generate the highest revenue in the market during the forecast period. For the large enterprises, successful retail analytics depends upon four primary factors information and data, communication technology, and implementation. Large enterprises have several outlets and warehouses retail analytics would offer the organizations active marketing strategy ability through multi-channel customer interaction and real-time recommendations.
"In global market by function, customer management segment would hold the highest share."
Customers are an integral part of the retail industry and would continue to boost the omnichannel retailing, which includes buying across multiple channels, including mobile platforms. Retail analytics tools would help the retailers to measure the number of customers in the store, wait times, and identify queue lengths, which would help the retailer to take decisions accordingly.
With the help of real-time information, dynamic allocation of resources could be achieved, which would help improve labor hours’ productivity and customer satisfaction. By offering location-based analytics services to the customers, the retailers would send a notification to the customers regarding the offers and services if the customers are near the store or mall. By directly sending personalized notification about the discount offers or sales to the customers on their smartphones, customers would be motivated to visit the store.
Followed by Customer management, Merchandising is anticipated to hold the highest global retail analytics market share. Merchandising is the core function of every retail sector. Today, many companies possess heaps of data of their customers, stores, and the market competitors, but they often lack the capabilities to put it and use it in an effective manner.
Merchandising analytics enable retailers to draw actionable insight, which would help in improving overall operating efficiency and merchandising effectiveness. It also provides a smart way of working to the retailers by taking decisions in time based on analyzed data. Analytics would eventually automate the core responsibilities of merchandising, including assortment, pricing and promotion, sourcing, space planning, and negotiation.Similarly, In-store operations segment is also expected to boost the retail analytics market sales in the forecast period.
North America generated a revenue of USD 1280.6 Mn in 2018 and is anticipated to emerge dominant in the global market during the forecast period. The rapid adoption of e-commerce services by many organizations across the region would drive the market growth in the region. Besides, adoption of omnichannel business models, increasing demand for price optimization, and a growing number of retail chains are expected to fuel the retail analytics market growth in North America during the forecast period.
Likewise, Asia Pacific generated a revenue of USD 735.1 Mn in 2018 and is expected to witness growth in market value across the region. Broad deployment of Internet services and increasing use of mobile phones is a key driver for the market in the region. Retailers from India, China, Japan, and the rest of Asia Pacific are taking an interest in implementing retail analytics to with-stand the market competition and provide novelty services to the customers. This would drive market growth across the region.
North America Retail Analytics Market, 2018
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On the other hand, Europe is projected to witness significant growth in the retail analytics market. The high growth countries, including Germany, Spain, and the Netherlands would contribute to the growth of the market in the region. France and Italy are on the upsurge of cost-effective cloud deployment model, which would be a key driver for the market in the region. However, the lack of skilled labor force and unemployment may hamper the market growth in the region.
The Middle East and Africa would have high growth in the market value compared to the technological developments in recent years. The region is significantly heading towards the modernization and technological developments. The Middle East and Africa could be a center of attraction for retailers as the major economies in the region are based on the consumption-driven market.
"Market Players like Fractal analytics,Salesforce.com, Inc., and IBM would ensure to strengthen the market position with respect to providing retail analytics solutions to the retailers"
Fractal Analytics is actively developing customers’ apps powered with the augmented reality, which would enhance the customers shopping experience across the retail industry. Automated algorithmic decision making is another innovative technology which would drive the business growth of the organization.
IBM has been actively working on developing a retail analytics solution based on the IBM Watson cloud- platform. IBM has developed Lift Insights, which offers the retailer an interface to know about the purchases and sales of the product concerning different buyers and merchants. This helps the retailers to make effective merchandising decisions. Similarly, IBM has developed IBM’s AI-infused business-intelligence solution, Cognos Analytics, which enables the retailers to pose questions and receive intelligent responses.
"A growing trend observed in the penetration of the retail analytics market across the industries."
The report provides qualitative and quantitative insights on the global market and detailed analysis of global market size & growth rate for all possible segments in the market. The global market is segmented by type, deployment, organization size, function, and geography. Based on the type, the global market is classified into software and services. By services, the global market is bifurcated into professional services and managed services. Professional services are further divided into Implementation and Consulting Services, and Training and Support.
Based on the deployment, the market is segmented into the cloud and on-premise. By organization size, the global market is divided into SME’S and large enterprises. By function, the global market is classified as customer management, supply chain, merchandising, in-store operations, and strategy & planning.
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By end-user, the global market is segmented into oil and gas, manufacturing, building automation, energy and utilities, automotive, pharmaceutical, and others. Geographically, the global market has been analyzed across five major regions, which are North America, Europe, Asia Pacific, the Middle East & Africa, and Latin America this region are further categorized into countries.
Along with this, the report provides an elaborative analysis of the global retail analytics market dynamics and competitive landscape. Various key insights presented in the report are the price trend analysis, recent industry developments in the global market, such as mergers & acquisitions, the regulatory scenario in crucial countries, macro, and microeconomic factors, SWOT analysis, and key retail industry trends, competitive landscape and company profiles.
o Professional Services
§ Implementation and Consulting Services
§ Training and Support
o Managed Services
By Organization Size
As per our (Fortune Business Insights) study, the global Retail Analytics Market is predicted to reach USD 13.3 Bn by 2026 with a CAGR of 19.2% (2019 -2026).
As per our study, business owners are leveraging Retail Analytics solutions to gain actionable business insights and implement effective market strategies. Currently (in 2019), the global Retail Analytics Market value at USD 3.8 Bn, and it is anticipated to reach USD 13.3 Bn by 2026 at a CAGR of 19.2% during the forecast period (2019 -2026).
Globally, spending on Retail Analytics is inflating each year. Some of the regions, such as in Europe, generated a revenue of USD 836.2 Mn in 2018 and is expected to generate a remarkable revenue share by 2026. The emergence of analytics and big data technology has enabled remarkable investments of businesses in deploying Retail Analytics solutions.
In the Retail Analytics Market, cloud-based Retail Analytics solutions and Functions are the leading segments. Many companies exclusively provide retail analytics solutions suite, including the cloud-based and on-premise solutions. Retail analytics functions include product recognition system, shelf availability monitoring, inventory tracking, human tracking in the retail store, and others.
Some of the driving factors for the Retail Analytics Market are the emergence of machine learning and data analytics likely to propel the global retail analytics market, and the increasing need for In-Store analytics would drive the global retail analytics market.
In the Retail Analytics Market, some of the key players are FLIR Systems, Inc., HCL Technologies Limited, IBM, Oracle, SAS Institute Inc., and Qlik. These market players are focusing on agreements, acquisitions, and developments in the Retail Analytics Market.
North America is expected to hold the highest market share in the Retail Analytics Market. The region is expected to witness a remarkable growth as it houses to the major key players in the Retail analytics market. Presence of large market chain stores and strong retailers fuel the market growth across the region.
Assortment optimization and shelf space allocation, customer-driven marketing, integrated forecasting, pricing optimization and fraud detection and prevention are some of the hyper- market trends of retail analytics.