Monday, April 15, 2024

Why Retail Analytics is a promising market despite varied projections

By N Jayalakshmi | April 01, 2024

The Retail Analytics Market is projected to be on the growth track, driven by many factors such as greater digitization of store operations, shifting consumer behaviour, adoption of real-time capabilities and sophisticated analytics for omnichannel integration for improved customer experiences, among others.  

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With data increasingly becoming a business enabler, the day is not far off when brick and mortar retail, like their ecommerce counterparts, can leverage data, to drive better decisions and store investments. This is one of the reasons that the Retail Analytics Market is on a growth trajectory, though different reports project different growth rates.  

According to a new report by MarketsandMarkets™, the Retail Analytics Market is projected to grow from USD 8.5 billion in 2024 to USD 25.0 billion by 2029, at a compound annual growth rate (CAGR) of 24.0% during the forecast period 

According to Fortune Business insights, the global retail analytics market size was valued at $7.56 billion in 2023 & is projected to grow from $8.75 billion in 2024 to $31.08 billion by 2032 , exhibiting a CAGR of 17.2 % during the forecast period of 2024- 2032.

However, according to a Mordor Intelligence Report, the Retail Analytics Market size is estimated at USD 6.33 billion in 2024, and is expected to reach USD 7.79 billion by 2029, growing at a CAGR of 4.23% during the forecast period (2024-2029).

A growing area despite varied projections 

But no matter what the different reports project, Analytics is a definitely a growing area in retail. Essentially Retail Analytics involves analyzing data from different sources to arrive at better business decisions. As Mordor Intelligence says, Retail Data Analytics follows analyzing historical data to enable smarter decisions, improve operations, and increase sales. Both end-user data and back-end processes, such as supply chain and inventory management, have been primary sources for data analytics, it adds.

The Mordor Intelligence Report also says that in-store-operation-based analytics has become an indispensable part of a brick-and-mortar retailer's operating strategy. “With benefits ranging from offering the right product to the right customer, further insight on loyal customers leads to the development of strategies to increase customer stickiness.” 

It cites the example of Amazon’s new Store Analytics service launched in June 2022. The e-commerce giant is now reportedly attempting to profit on its physical storefronts by providing marketers with data on what customers buy.

According to MarketsandMarkets™, adoption of real-time capabilities and sophisticated analytics, such as artificial intelligence, for omnichannel integration and improved customer experiences is what the Retail Analytics Market will look like in the future. 

Predictive Analytics and Managed service providers (MSPs) to grow

According to the Market and Markets report, predictive analytics segment is expected to register the largest market size during the forecast period. Predictive analytics software can help forecast sales volumes, identify demand fluctuations, and predict customer preferences, enabling retailers to optimize pricing strategies, allocate resources efficiently, and tailor marketing campaigns to target specific customer segments. It adds that the managed segment of the Retail Analytics Market is growing rapidly.  Managed service providers (MSPs) offer tailored solutions that cater to the unique needs and challenges of retailers, delivering insights that drive operational efficiency, enhance customer engagement, and drive revenue growth.

MSPs employ skilled professionals with expertise in data analysis, machine learning, and retail industry trends, enabling retailers to harness the full potential of their data assets. Additionally, managed services provide scalability and flexibility, allowing retailers to adapt to changing business requirements and market dynamics without the need for significant investments in infrastructure or personnel.

By region, the report adds that Asia Pacific accounted for the highest growth rate during the forecast period with regions like China and India leading the charge. 

The report also mentions some major players in the Retail Analytics Market including Microsoft (US), IBM (US), SAP (Germany), Oracle (US), Salesforce (US), MicroStrategy (US), SAS Institute (US), WNS (India) and HCL (India), among others. 

For retailers, strategic partnerships and investments in the area of analytics could thus drive big business benefits.  



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