Big Data Analytics in Retail Market

Market Overview

The global big data analytics in retail market size was valued at USD 6.25 billion in 2021. It is projected to reach USD 40.88 billion by 2030, growing at a CAGR of 23.2% during the forecast period (2022–2030). Factors like the rising need to deliver personalized customer experience to increase sales and growth of the E-Commerce sector drive market growth.

Big data analytics in retail enables detecting consumer behavior, discovering shopping patterns and trends, improving the quality of customer service, and achieving better customer retention and satisfaction. Retailers can use it for market basket analysis, pricing analysis, cross-selling, supply chain management, customer segmentation, customer loyalty analysis, and finance and fixed asset management. Rising spending on big data analytics technologies, desire for individualized customer experiences to improve sales, and adoption of customer-centric initiatives are driving the expansion of big data analytics in retail.

Market Dynamics

Global Big Data Analytics in Retail Market Drivers

Rising Need to Deliver Personalized Customer Experience to Increase Sales

Retailers use big data analytics to unlock information and provide individualized customer offerings. Personalization can boost sales by up to 10% or more and produce a five to eight-fold Return on Investment (ROI) on marketing expenditures. For instance, Montblanc deployed video analytics in their offline retail locations in partnership with RetailNext, creating maps that reveal where customers spent most of their time in a store. Many businesses are also starting to equip their storefronts with sensors that can detect when a nearby customer has the store's app installed on their smart device. Retailers can use this information to provide timely offers to shoppers to persuade them to buy their goods or inform them about their new offerings.

Growth of the E-Commerce Sector

Robust data analytics software has become more popular among these e-commerce suppliers due to the abrupt increase in people's reliance on international e-commerce websites and online marketplaces. Retailers can enhance the performance of their online storefronts to boost sales with big data analytics in retail software. The likelihood of clickthroughs and sales is increased by personalized product recommendations and offers based on previous web browsing patterns of customers. Examining data points like product browsing activity by location, user comments, reviews, stored wishlists, or goods in abandoned shopping carts might help promote products. Companies are therefore using customer journey analytics to comprehend customers' purchasing decisions, accelerating the development of big data analytics in the retail sector.

Global Big Data Analytics In Retail Market Restraint

Complexities to Capture Customer Data

Customers are reluctant to give information due to security concerns, making it challenging for most shops to collect client data. Gaining customers' trust to manage their data is a challenge for merchants. While taking the required precautions to ensure data security is critical, it is equally crucial to fully gain consumer consent and reassure them that the data collected will be utilized safely and securely for their advantage. Processing includes gathering, planning, arranging, storing, altering, educating, using, integrating, restricting, eliminating, or erasing personal data. Due to such stringent data privacy rules, businesses are now highly concerned when assessing trends, harming the economy and potentially hampering market growth.

Global Big Data Analytics in Retail Market Opportunities

Integration of IoT, AI, and Machine Learning

The retail industry is adopting technology like artificial intelligence and machine learning to revolutionize the way products, services, and customer interactions are created. Machine learning algorithms are also crucial for spotting fraudulent behavior like phony profiles and unauthorized access. Fraud and cybersecurity applications earn over 26% of the initial investments raised for AI in the banking sector, more than any other use-case category, according to data conducted by Emerj Artificial Intelligence Research. There is a significant interest in the ability of artificial intelligence and machine learning to detect fraudulent activity. Additionally, it is anticipated to assist with consumer billing and charging, predict the business future and identify new options for businesses to increase revenue. Usage patterns, billing details, purchase histories, device choices, demographic information, location, customer journey, customer interactions, and service quality are all included in this data.

Regional Analysis

The global big data analytics in retail market is bifurcated into four regions, namely North America, Europe, Asia-Pacific, and LAMEA.

North America Dominates the Global Market

North America is the most significant shareholder in the global big data analytics in retail market and is expected to grow at a CAGR of 20.7% during the forecast period. The U.S. and Canada are included in the analysis of big data analytics in the retail market in North America. One of the biggest marketplaces for big data analytics in retail is the United States. It is a valuable center for market breakthroughs because it is home to some of the top leaders in big data analytics. Extensive data analytics implementation in the cloud for retail has experienced rapid growth and is predicted to maintain its dominance in North America. Due to excellent scalability and availability features, firms in the North American region are moving from on-premise to cloud-enabled big data analytics in retail, further fueling the market growth. The area boasts a sizable base of big data analytics providers, fostering market expansion, including IBM Corporation, SAS Institute Inc., Alteryx Inc., and Microstrategy Incorporate.

Asia-Pacific is expected to grow at a CAGR of 27.10%, generating USD 13,633.84 million during the forecast period. China, India, Japan, Australia, and the rest of Asia-Pacific are all included in the analysis of the Asia-Pacific big data analytics in the retail market. China has a sizeable portion of the analytics market due to shifting customer demands, a surge in online analytics investments by online businesses, a quick concentration on cutting-edge technology, and a more significant emphasis on increasing sales. Due to the rising popularity of fast internet connectivity, including 4G connections, smartphone penetration, the rise in popularity of e-commerce businesses, changes in consumer purchasing patterns, and fierce and growing competition among retail vendors, the adoption of cloud-enabled big data analytics in retail software is predicted to increase in the Asia-Pacific region.

The UK, Germany, France, Italy, Spain, and the rest of Europe are all included in the analysis of Europe's big data analytics in the retail market. At each sales cycle stage, big data analytics are employed in the sales sector to comprehend customer performance, forecast demand, and raise prices. Reducing system-wide costs, enhancing online and stored user information, data-driven shipping chains, and real-time analytics and targeting are all significant components of big data applications in sales. Although there is a sizable amount of on-premise big data analytics in retail deployment in Europe, penetration and availability of cloud for mass users are likely to create sizable chances for the market's expansion.

Big data analytics in the LAMEA retail market is projected to be driven by the region's growing retail sector and regulations supporting new technology use. Big data analytics is also utilized in retail software for market basket analysis, pricing analysis, customer relationship management, and direct marketing. Due to the software's benefits, businesses use these extremely innovative forecasting methodologies. It is predicted that high untapped market potential in nations like Colombia, Brazil, Argentina, Chile, and Peru will present profitable growth prospects for the industry.

Segmental Analysis

The global big data analytics in retail market is segmented by component, deployment, organization size, and application.

Based on Components, the global big data analytics in retail market is bifurcated into software and service.

The software segment is the highest contributor to the market and is expected to grow at a CAGR of 22.7% during the forecast period. The software sector consists of several big data analytics tools and platforms for organizing, storing, and analyzing critical data gathered from substantial data sets in retail businesses. These solutions assist businesses in getting the most value out of their data, which results in smarter decisions or higher income. Companies now have access to vast data, making it urgent to deploy analytics software to comprehend and utilize it more effectively. Companies undergoing digital transformation have made extensive data analytics software implementation a top priority since these technologies give a company's data greater visibility.

Professional and managed services are the two primary types of services for big data analytics in retail. Implementation, training and support, and consulting services are examples of professional services. Due to implementation services, big data analytics in retail are carefully planned, installed, and configured. A software package's components are included in these services, except for a unique application made to address a particular requirement. Through the provision of data, analysis, and recommendations, consulting services assist clients in making better decisions. The services include data analytics deployment and assistance in the retail business to help with decision-making, boost operational efficiency, and cut costs.

Based on Deployment, the global big data analytics in retail market is bifurcated into on-premise and cloud.

The on-premise segment owns the highest contributor to the market and is expected to grow at a CAGR of 22.5% during the forecast period. The on-premise deployment option for big data analytics in retail enables software installation. It authorizes applications to function on systems already existent on an organization's premises rather than putting them on server space or the cloud. These software programs have more advanced security capabilities, encouraging their use in large financial institutions and other data-sensitive businesses where security is a top concern. Big data analytics in retail typically entails security-sensitive applications that must handle growing data volumes. Numerous case studies show that an on-premises solution with an in-memory database is a tried-and-true method.

A vendor or service provider hosts applications and access programs and functionality as a service remotely, according to the cloud-based deployment of big data analytics in retail. This deployment approach reduces the amount of money anticipated to be spent and gives a greater capacity to focus on innovations and distinctiveness. IT teams have a more significant opportunity to help enterprises realize commercial value. Cloud analytics simplifies scalability because businesses may quickly increase the number of servers they use. Cloud computing is a choice for enterprises searching for a scale for the future and simplifies organizing, cleaning up, and analyzing data.

Based on Organization Size, the global big data analytics in retail market is bifurcated into large enterprises and SMEs.

The large enterprise segment is the highest contributor to the market and is expected to grow at a CAGR of 22.8% during the forecast period. Large enterprises typically employ more than 1,000 people and spend a lot of money deploying the equipment, networks, and other components of the retail analytics infrastructure. Large Enterprises also need more sophisticated and integrated software to manage consumer orders across numerous channels. Large retail organizations use big data analytics in retail software to enhance business operations and make wise judgments to boost income. Due to the utilization of legacy IT infrastructure, high investment costs, control over data, and safety issues, significant businesses typically prefer integrating big data analytics in retail applications via an on-premise deployment strategy.

Small to medium-sized businesses rely primarily on numerous vendors for software and hardware integrators and other technology software suppliers. Therefore, these businesses are constantly concerned with capital cost control. In the technologically advanced era, when things change so quickly, SMEs frequently struggle to survive in a hostile market. Small business expansion is crucial for emerging economies. Small retail businesses frequently struggle with storing and handling consumer orders; by incorporating big data analytics into their retail software, these businesses can hopefully overcome this challenge and boost revenue.

Based on application, the global big data analytics in retail market is bifurcated into sales and marketing analytics, supply chain operations management, merchandising analytics, customer analytics, and others.

The supply chain operations management segment owns the highest market share and is expected to grow at a CAGR of 20.7% during the forecast period. The application of methods collectively referred to as supply chain analysis allows for examining substantial volumes of data associated with acquiring, processing, and distributing goods. A key component of supply chain management is supply chain analysis (SCM). Retailers must make daily judgments about their inventory and frequently do not have time to consider how to balance supply and demand properly. Adopting an analytics-based approach to learn more about the state of the stock and help develop an inventory replenishment strategy is advantageous for the supply chain. It also aids in providing information on the effects of alternate tactics. Data and quantitative techniques are used in significant supply chain analytics to enhance decision-making for all supply chain activities.

Sales management may better understand where salespeople can improve by using sales analytics to detect, model, comprehend, and predict sales trends and results. Technologies and procedures used in marketing analytics allow businesses to assess the effectiveness of their marketing campaigns. This is done by evaluating performance (e.g., blogging versus social media versus channel communications). The discipline of measuring, managing, and analyzing marketing performance to boost effectiveness and maximize return on investment is known as sales and marketing analytics. It compiles data from all marketing channels into a joint marketing picture, which aids in extracting analytical results.

Recent Developments

• March 2022- MicroStrategy Incorporated announced Intelligent Cubes in Workstation.
• August 2022- Alteryx, Inc., an Analytics Automation Company announced Alteryx Server-FIPS, a version of its Server offering aligned with the Federal Information Processing Standards (FIPS) for data security and computer systems.