Retail Analytics Market Size, Share & COVID-19 Impact Analysis, By Deployment (On-Premise, and Cloud), By Retail Store Type (Hypermarkets and Supermarkets, and Retail Chains), By Function (Customer Management, Supply Chain, Merchandising, Strategy and Planning, and In-store Operations), and Regional Forecast, 2023-2030

The global retail analytics market size was valued at USD 6.59 billion in 2022 and is projected to grow from USD 7.56 billion in 2023 to USD 23.53 billion by 2030, exhibiting a CAGR of 17.6% during the forecast period.

Retail analytics covers advanced technologies, such as big data and data mining to gain meaningful business insights and evaluate massive datasets. It aids businesses in drawing effective strategies for their activities based on customer behavior patterns. The need for improving sales performance and revenue generation and identifying customer preferences and trends will likely propel the market growth. Retail solutions integrated with Artificial Intelligence (AI) deliver intelligent insights to fuel sales and enhance customer experience. For instance,

• In May 2021, Walmart employed the RetailAI solution to lower operational costs and enhance the self-service shopping experience.

COVID IMPACT

Rising Online Shopping Amid COVID-19 Pandemic Fueled Retail Analytics Solutions Demand

Due to the coronavirus outbreak, physical retail stores rapidly shifted to virtual stores by using e-commerce and mobile apps. The pandemic boosted the growth of e-commerce businesses due to online grocery shopping. The rising online shopping trend augmented the demand for customer-level analytics. Also, due to limited logistics services and a 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 implemented social distancing protocols, further increasing the popularity of online shopping. This scenario drastically boosted the demand for retail analytics solutions. For instance:

• In May 2021, Walmart deployed an analytical solution on its store consumer data to enhance its e-commerce business. This factor resulted in a 97% hike in the organization’s yearly growth in Q2 2021.

Adopting smart retail tools in its stores' database helped Walmart outpace many leading e-retailers. Similarly, during the pandemic, many market players started offering solutions for efficient product supply, intelligent in-store management, and financial & customer demand forecasting. Therefore, the global market showcased a significant growth rate during the pandemic.

LATEST TRENDS

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

Product inventory management and shelf space allocation are a retailer’s key resources. Retail analytics refers to using analytics to provide products at the right place in the right quantity to the right customers. This trend has continued to gain strength in the retail industry to improve micro-level analysis and assortment planning. The demand for efficient shelf space management is growing to cater to the specific preference of customers visiting retail stores and reduce the financial impact of several assortments. For instance,

• In January 2023, EY launched EY Retail Intelligence, a solution that enhanced customer shopping experience using Microsoft Cloud and Cloud for Retail. This solution offered omnichannel, personalized shopping, product sustainability information, and step-change improvements in decision-making.

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

DRIVING FACTORS

Increasing Integration of Advanced Technologies to Drive Market Growth

Retail is assumed to be one of the largest sectors to implement advanced technologies, such as blockchain, artificial intelligence, machine learning, and others. AI offers improved data management, personalized experience, predictive analysis abilities, and real-time assistance. Other applications of AI, such as chatbots, virtual assistants, and more are supporting retailers to stay connected with their customers. This feature streamlines the business workflow by handling several requests automatically and improves companies’ profitability by informing customers about promotions and sales. AI has enabled businesses to offer personalized customer experiences by collecting and analyzing data from purchase history to help retailers improve the shopping experience of their customers. For instance,

• In January 2023, Microsoft partnered with AiFi to launch a Smart Store Analytics cloud service to provide retailers with shopper and operational analytics by using AiFi’s autonomous shopping technology. Smart Store Analytics pulls data from AiFi’s database to deliver insights on store layouts, customer behavior, and inventory management.

Similarly, blockchain is reliable, efficient, and faster than traditional practices and enhances the retail life cycle. It helps retailers with cloud storage, strengthens supply chain management, and enables businesses to run a loyalty program. Thus, these advanced technologies will further fuel the market growth.

RESTRAINING FACTORS

Stringent Data Privacy Regulations May Restrain Market Growth

The implementation of the General Data Protection Regulation (GDPR) is affecting retail solutions that use big data technology. It has become challenging for retailers to gain access to customers’ data owing to stringent data privacy regulations. Growing awareness regarding consumer privacy in the retail sector is hampering the profit margins of many multinational companies and international retailers. Furthermore, these regulations prevent retailers from offering more personalized experiences as they restrict their access to sufficient data. Thus, the complexity of adapting tools as per these regulations reduces reliability, indirectly affecting the adoption of retail platforms.

SEGMENTATION

By Deployment Analysis

Cloud-based Retail Analytics to be Widely Used to Gain Real-time Assistance

By deployment, the market is bifurcated into on-premise and cloud. The cloud segment is expected to dominate the retail analytics market share and record a strong CAGR. The real-time assistance and insights offered by cloud-based retail analytics can boost customers’ satisfaction while shopping. Further, it offers a competitive edge to market players who use the analytical data for attaining greater business intelligence with user-friendliness, security, and safety compliance.

On the other hand, the traditional on-premise retail analytics model may also showcase an average adoption rate due to its security assurance. The growing cyberattacks on the cloud platform might compel retailers to deploy on-premise retail software.

By Retail Store Type Analysis

Complex Inventory Management to Drive Demand for Analytics in Retail Chains

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

The retail chain segment is expected to dominate the market share. International retail giants, such as Walmart, Kroger, and others are strengthening their customer base by enhancing their customer experience. The retail analytics solutions are helping these chains maintain their inventory, supply chain, in-store operations, and strategies to augment their business growth.

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

By Function Analysis

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Retail Analytics to be Widely Deployed in Customer Management Function to Boost Customer Satisfaction

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

The customer management segment is expected to capture maximum market share during the forecast period. The changing customer demand is key to driving better sales and revenue. Therefore, most retail chains implement analytical tools to understand customers’ preferences and overall market trends. Similarly, the demand for the solution is growing to improve the merchandising process. It enables retailers to align their merchandising decisions with the customers’ expectations.

The strategy & planning segment is expected to witness rapid growth in the market for retail analytics during the forecast period. Analytical platforms offer meaningful insights and interactive dashboards, which can help retailers plan their next strategy. 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 record steady growth.

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

REGIONAL INSIGHTS

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

During the forecast period, North America is anticipated to hold the maximum market share. The rapid adoption of e-commerce services by many organizations across the region will likely drive market growth. Furthermore, retailers in the U.S. and Canada are adopting advanced technologies to provide advanced customer experience, improve operational decision-making efficiency, and identify trends in the market.

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

Europe is expected to gain significant growth in the market during the forecast period. 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 regions are set to showcase steady growth owing to increasing investments in the technologically advanced retail industry. With the digital data explosion and development of big data solutions, companies, such as Microsoft Corporation and Reliance Industries are increasing their investments in the retail industry. Similarly, the growing digital transformation in Latin America’s retail industry will boost the market’s growth opportunities.

KEY INDUSTRY PLAYERS

Continuous Product Development is a Key Strategy for Companies to Strengthen Market Positions

The major companies in the market are integrating advanced technologies, such as blockchain, machine learning, cloud computing, artificial intelligence, and more with retail analytics solutions. Through these developments, the retailers are focusing on offering dedicated analytics solutions to enhance the customer experience.

List of the Key Companies Profiled:

• Microsoft Corporation (U.S.)


• HCL Technologies Limited (India)


• FLIR Systems, Inc. (U.S.)


• IBM Corporation (U.S.)


• Oracle Corporation (U.S.)


• SAP SE (Germany)


• QlikTech International A.B. (U.S.)


• Fractal Analytics Inc. (U.S.)


• Wipro Limited (India)


• Nielsen Consumer LLC (U.S.)


• EY (U.K.)

KEY INDUSTRY DEVELOPMENTS:

• April 2023: Infosys partnered with Walmart Commerce Technologies to implement Store Assist, a cloud-based solution that offers omnichannel experiences, such as pickup, shipping from stores, and delivery for staff and consumers, improving consumer and employee experiences.


• March 2023: Adobe announced Adobe Product Analytics, a new application in Adobe Experience Cloud that unifies customer journey insights across products and marketing to benefit teams focused on customer experiences.


• March 2023: Accenture acquired Flutura, a Bengaluru-based industrial AI startup that provides industrial AI analytics. This acquisition will strengthen Accenture’s industrial AI platform by providing new offerings to its clients.


• January 2023: Microsoft and Salesforce launched new systems for next-generation retail store technology including smart stores, digital advertising, and customer & employee experience, demonstrating the continued importance of physical retail stores despite the growth of e-commerce, which accounts for about a quarter of retail sales globally.


• September 2022: Coresight Research acquired Alternative Data Analytics, a data insights & strategy firm, to increase its data capabilities and expertise in data-driven research. The acquisition will further enhance Coresight Research’s ability to provide high-quality retail analytics to its clients in the consumer-facing retail technology and real estate sectors, allowing them to make informed business decisions based on data-driven insights.

REPORT COVERAGE

An Infographic Representation of Retail Analytics Market

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The market reports leading regions across the world to understand the market better. Furthermore, it offers insights into the latest market trends and evaluates technologies used at a large scale globally. It further highlights a few growth-stimulating factors and restraints, thereby helping the reader gain in-depth knowledge about the market.

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