Retail Analytics Market Size, Share & Trends Analysis Report By Components (Software , Services), By Applications (Merchandising Analysis , Customer Analysis, Performance Analysis, Inventory Analysis, Others), By Organizations (Large Enterprises , Small and Medium Enterprises), By Business Functions (Finance, Sales and Marketing, Supply Chain, Store Operations, Others) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2024-2032

Market Overview

The global retail analytics market size was valued at USD 7.68 billion in 2023. It is estimated to reach USD 41.75 billion by 2032, growing at a CAGR of 20.7% during the forecast period (2024–2032). In light of the growing competition in the retail industry, it is crucial to optimize corporate procedures while satisfying customer expectations. Data analytics is used throughout the retail process; it helps keep tabs on all items in development, predict sales, and estimate demand. This is expected to drive market growth. Moreover, based on their previous purchases, it is possible to quickly and efficiently identify customers interested in specific products using analytics. This supports the creation of customized marketing campaigns by retailers.

Retail analytics gathers analytical data on sales, customer demand, supply chain movements, inventory levels, and other variables. Two applications of this data are maintaining procurement levels and making significant marketing decisions. Retailers can drive personalized product recommendations, improve pricing strategy, improve promotional campaigns, optimize store layout and design, and create detailed customer personas by using these insights to improve their operations.

Firms can obtain useful customer data from retail analytics data, which enables retailers to better understand and fulfill the needs of their customers. Retail business analytics tools aid in forecasting future demand and sales. Competition is expected to increase as business intelligence (BI) and analytics become more important and cutting-edge technologies are adopted for retail analytics solutions. Global leaders in retail analytics are developing state-of-the-art technology and utilizing retail business intelligence to capitalize on profitable revenue opportunities.

Highlights

• Solution dominates the component segment
• Inventory analysis dominates the application segment
• Large enterprises dominate the organization segment.
• North America is the highest shareholder in the global market

Market Dynamics

Global Retail Analytics Market Drivers

Retail Industry's Growing Data Landscape

The retail industry is becoming more data-rich as businesses go digital, establishing many more data-capture opportunities. According to Google's Zero Moment Of Truth (ZMOT) research, 70% of consumers research online before purchasing in-store. Retail analytics provides information about the organization's operations and business practices in addition to specific customer insights with room for growth.

In order to produce useful insights that can be put to use right away, this field filters datasets using methods like data mining and data discovery, going beyond simple data analysis. Moreover, businesses utilize retail analytics to produce more accurate target market profiles. By harnessing data from retail analytics, companies can identify the ideal customers from a diverse range by age, gender, buying pattern, preference, and location. Such factors drive market growth.

Growing Social Media

Other prime factors positively impacting the retail analytics market include the utilization of social media, an increase in online shopping, and the rising use of smartphones. Social media allows retailers to better understand consumer preferences by tracking consumer behavior and predicting and anticipating future behavior. As per data from the e-commerce vendor Custora, 90% of consumers try to reach out to brands on social media. Therefore, the prolific use of social media is a key driving factor for the retail analytics market. Moreover, the most recent development in the retail analytics space is the personalization of the customer experience through the use of retail analytics to forecast demand and foot traffic.

Global Retail Analytics Market Restraint

Budgetary Constraints

Large retail companies use technology for routine tasks like supply chain management, tracking inventory, avoiding shrinkage, and billing and payments. CRM tools improve customer relationship management, ERP solutions ease other operations, and retail analytics solutions provide insights into sales, inventory, customers, and other crucial aspects of the decision-making process. The unorganized retail sector faces challenges related to the limited accessibility, viability, and adoption of these technologies, while large corporations reap the benefits.

Even though unorganized retailers want to use technology to grow, they are often limited by financial limitations. They face competition from well-funded offline trade outlets and the e-commerce trend. Funds for innovation and digital transformation may be severely limited if hidden costs linked with maintaining antiquated, outdated systems rapidly become unaffordable. Moreover, the expansion and improvement of retail companies have been severely impeded by the high cost of capital and the problem of obtaining capital funding, particularly in remote and rural areas. Such factors hinder market growth.

Global Retail Analytics Market Opportunities

Digital Transformation in Retail Industry

The global retail and consumer products industry is evolving more quickly than anyone could have imagined as digital acceleration gains traction. Companies and customers are beginning to understand that they need to approach every part of their operations with a data-driven mindset to remain competitive in the digital age. For example, a retailer undergoing digital transformation might offer the best deals in real time when customers visit physical locations or optimize inventory to improve the in-store and online experience.

Digital transformation in retail may boost customer satisfaction and loyalty by giving customers the services and goods they need. Moreover, the term "industry 4.0" refers to the new technologies that are redefining the boundaries between the digital and physical realms. Businesses' performance is revolutionized by data access combined with powerful analytics tools like scenario analysis, predictive learning algorithms, and visualization.

Businesses may now gather vast amounts of real-time data from their physical assets and facilities, carry out sophisticated analytics to generate novel insights and make better decisions. Product development, delivery to customers, and design are all being transformed by the digital revolution. It impacts the retail supply chain in a significant way. For instance, retail analytics uses pre-existing data to boost conversion, optimizes the supply chain, and uses predictive modeling and micro-targeting/pricing to personalize shopping experiences. Thus, technological developments in retail analytics, such as AI and ML, are anticipated to support the market's growth.

Regional Analysis

North America Dominates the Global Market

Based on region, the global retail analytics market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa. 

North America is the most significant global retail analytics market shareholder and is expected to expand substantially during the forecast period. North America is projected to hold the largest market share in the retail analytics market during the forecast period due to the high implementation rate of retail analytics in the region. Retail analytics solution deployment is high in North America for sophisticated systems, and there is a high availability of working capital at the disposal of several retailers in the region. The United States is one of the most powerful marketplaces because it has adopted technology early, with large corporations investing extensively in various technologies to remain competitive. For instance, generative artificial intelligence (AI) saw a much greater user increase in year two compared to year one among the recent major technologies in the United States. Within a year of its creation, nearly ten times as many people had used generative AI as there were tablet users and hardly twice as many as smartphone users.

Furthermore, numerous major corporations are expanding their investments in creating innovative smart stores, which are also anticipated to stimulate market growth in this region. For example, Amazon has begun developing Amazon Go convenience and food stores throughout the United States. Similarly, in May 2021, NielsenIQ, the foremost authority on consumer intelligence, launched Byzzer. Small and new Consumer Packaged Goods (CPG) enterprises, such as those in the cosmetic, alcoholic beverage, food, cannabis, and pet industries, can get vital information through this innovative platform. NielsenIQ developed Byzzer to suit the requirements of new CPG brands, specifically actionable retail data that accelerates development without requiring an army of analysts. Such factors propel regional market growth.

The Asia-Pacific market accounted for the second-largest revenue share in 2023 due to the region's concentration of developed and developing economies. Due to rising levels of digitalization and e-commerce penetration in rapidly developing nations like China and India, there are significant opportunities for both technological advancement and retail shop expansion. Retailers in Asia-Pacific are also tailoring their measures to offer the best products to their customers by increasing the use of Wi-Fi products that offer real-time customer activity analytics.

In order to support data-driven business decisions and improve retail operations, China, India, and Japan are concentrating on data management. For instance, China released data management guidelines, as per the official Xinhua news agency, in an effort to leverage the nation's massive data reserves and advance the digital economy. According to Xinhua, the guidelines state that China will reduce the bar for market entities to obtain access to data. As long as personal data, company secrets, and national data security are protected, it will encourage the effective use and exchange of data.

Moreover, revenue growth in the retail analytics market is also fueled by major companies' growing implementation of smart shops in this area. For instance, Ikea, a Swedish furniture and home goods manufacturer, intends to open a few large four to five small-format stores in each of India's top cities to reach more customers in densely populated areas. Such factors propel regional market growth.

Segmental Analysis

The global retail analytics market is bifurcated into components, applications, organizations, and business functions.

Based on components, the global retail analytics market is segmented into software and services.

The solution segment dominates the global market. Retail analytics integrates advanced data analysis techniques to optimize different aspects of retail operations, providing a diverse solution segment. This includes customer segmentation, demand forecasting, inventory management, pricing strategies, and personalized marketing campaigns. A retail analytics solution aims to give retailers information about sales, inventory, clients, and other important factors they need to consider when making decisions. The discipline creates a comprehensive picture of a retailer's sales, development, and reinforcing potential by integrating multiple granular categories. The increasing need for retail analytics, which enables companies to make better decisions, run their operations more effectively, and provide greater customer service, is fueling this segment's revenue growth.

Based on application, the global retail analytics market is segmented into merchandising analysis, customer analysis, performance analysis, inventory analysis, and others.

The inventory analysis segment owns the highest market share. In retail analytics, inventory analysis is the process of using data to minimize excess inventory, optimize stock levels, and prevent stockouts. Retailers can plan their inventory replenishment, allocation, and assortment by examining demand forecasts, market trends, and historical sales data. Numerous outside factors affect people's decisions to buy certain items. The intense TV advertising campaign could result in a massive demand for HDMI cables. In a winter storm, customers might stock up on necessities for the home. Moreover, businesses can plan promotions to take advantage of outside events and optimize their supplies ahead of time with the aid of predictive retail analytics. Therefore, retail analytics are growing in popularity.

Based on organization, the global retail analytics market is bifurcated into large enterprises and small and medium enterprises.

The large enterprises segment is the largest contributor to the global market. Large retail enterprises have complex needs, which are met by the retail analytics large enterprise segment. The process entails implementing resilient data analytics programs designed to manage enormous volumes of data produced through various channels and locations.

Due to their heightened focus on improving customer contact through retail analytics, large enterprises held the largest revenue share in 2022. Large companies may invest in state-of-the-art technology, like retail analytics, because of their strong financial standing. Moreover, big businesses adopted retail analytics to reduce losses and increase revenues due to the COVID-19 pandemic, intense competition, and unstable market conditions. This contributed to the revenue growth in this category.

Based on business functions, the global retail analytics market is bifurcated into finance, sales and marketing, supply chain, store operations, and others.

The store operation segment owns the highest market share. Given the rise in the number of businesses operating in the retail industry, the store operation segment is predicted to maintain a sizable market share. The retail analytics store operation segment aims to improve performance and operational efficiency at the store level. Enhancing customer experiences and streamlining operations entails evaluating sales, staffing, inventory management, and store traffic data. Retailers can increase sales and maximize profitability by using this segment's insights to inform decisions about product placement, staffing levels, store layouts, and promotional tactics.

Recent Developments

• August 2023 - The business plans for 2023 and 2024 were presented by Vsblty, a company whose goal is to introduce biometrics into the retail sector. With real-time facial recognition, the Vancouver-based company intends to extend the use of its retail analytics technology for security and theft prevention. In order to provide real-time targeted advertising, Vsblty integrates cameras into digital displays to detect and classify faces.
• March 2022 - Snowflake released Retail Data Cloud, which combines the company's data platform, Snowflake, partner-delivered solutions, and industry-specific datasets. The retail data cloud enables retailers, manufacturers, distributors, and industry technology providers to leverage their own data, access new data, and collaborate throughout the retail sector.