|Status : Published||Published On : Jun, 2021||Report Code : VRSME9039||Industry : Semiconductor & Electronics||Available Format :||Page : 220|
The global smart retail market size is anticipated to grow from USD 20.4 billion in 2020 to USD 63.5 billion by 2027, growing at a CAGR of 24.7%. One of the key trends in increasing market growth is the integration of technologies such as augmented reality, virtual reality, artificial intelligence, and IoT to enhance store operations, promote precise inventory management, and boost customers' shopping experience.
These sophisticated retail technologies allow brick-and-mortar retailers to compete against online retailers, reclaim lost market share, bring more customers to the store, and increase customer retention. Major retailers such as Alibaba, Walmart, and Amazon are increasingly introducing smart retail technologies to improve business processes and support their customers. Physical distributors gather client data and analyze customer behaviour to personalize their shopping experience. Retailers are using mPOS, beacons, and NFC technologies to greet customers by their name as well as to provide them with relevant information.
• Foot-traffic Monitoring
• Inventory Management
• Loyalty Management and Payment
• Predictive Equipment Maintenance
• Brand Protection
• Smart Fitting Rooms
In 2019, the foot-traffic control segment accounted for the largest share of the smart retail market by use. The market for advanced smart retail solutions for foot-traffic monitoring applications is rising in response to rapid urbanization. Furthermore, increased foot traffic in the retail industry, especially in brick-and-mortar stores, unlocks the potential for increased sales as well as retailer profit margins.
By Retail Offering
• Apparel and Accessories
• Fast-moving Consumer Goods
• Hardlines and Leisure Goods
In 2019, the fast-moving consumer goods segment accounted for the largest share of the smart retail industry in terms of retail offerings. The growth of this market segment is expected to be aided by the continuous rise in the global population.
• North America
In the near future, APAC is expected to show tremendous growth, owing to the rise in penetration of broadband internet services, and the presence of major expanding economies in this area. This will draw global retail chains to invest in these markets and will drive the demand in this region. Although many countries in this region such as China, Australia, and Japan have already adopted retail analytical platforms, therefore developing countries from Asia are expected to drive the smart retail market in the coming future.
The majority of key players are offering key solutions with the cloud as well as the edge computing model, which builds intelligence to make better decisions. Analyzing and accumulating data in the cloud is the ultimate means for merchandising analytics, predictive analytics, and other types of customer analytics. Strategies developed through these analyses can help retailers understand long-term trends and make predictions. For instance, retailers can feed data into cloud-based predictive analytics software to achieve precise demand planning, and understand the revolution between store-to-store performance and customer preferences. These types of cloud models use analytics to notify targeted and localized marketing campaigns.
Advanced technologies offer the potential to attain a variety of business goals, including supplier management, customer value, and optimized revenue generation. AI and ML can offer retailers intelligent insights that can enhance sales along with the customer experience. The features offered by AI, big data analytics, and machine learning are anticipated to drive market growth. The ability to track data from customer contracts with online channels will enhance e-commerce strategies.
Further AI optimizes the supply chain, improves product development, and corrects inventory distortion. Therefore an intelligent AI-based retail platform is expected to drive this market growth in the coming years. Retailers can use machine learning and data analytics to analyze the data, and draw insights about quantity, sales, and price to reach the target customers, thus the analytics help retailers to effectively manage the transportation and supply chain components.
The General Data Security Regulation of the European Union makes a major contribution to introducing data analytics-driven business insights even faster than other regions. The retailers from Europe's largest market, including Germany, France, Italy, and Spain, are the key contributors to the growth of retail solutions. Further, embracing cloud-based, and accessible retail platforms in Italy and France is driving the growth of this market across Europe. This also provides a good opportunity for future growth prospects.
Modernization and technological developments in recent years would lead the Middle East and African region to adopt advanced retail platforms. Besides this, the digitization of retail chains is expected to drive the future of this market.
Stringent Data Regulation Laws-General Data Protection Regulation (GDPR) would impact retail solutions that use big data technology without resolving the data privacy break, no retailer will be able to take effective advantage even after integrating big data services into their business module. It is becoming challenging for retailers to attain desirable goals despite the security of multinational companies, and international retailers are conducting their businesses many of the retail sectors need to adapt their operations as per the requirement of these regulations reduces reliability that indirectly affects the adoption of retail platforms.
Penetration of Technology- In very large/ developing markets like India, Indonesia, etc. technology is yet to penetrate in remote areas which constitutes the majority of the retail market for example 65% of the Indian population still lives in villages therefore penetration of technologies such as machine learning or artificial intelligence will take some more time which in turn poses a big challenge for the smart retail market.
Impact of COVID-19 on Smart Retail Market
At present, the omnichannel commerce company is increasingly reducing its presence in the physical store, and concentrating through e-commerce or mobile applications on the virtual presence. The e-commerce sector driven by online grocery shopping has been upsurged by the COVID-19 pandemic. The rising trend of online grocery shopping has increased customer-led analytics demand. The global pandemic has significantly forced retailers to concentrate on the government's supply chain management enforced lockdowns, and social distance initiatives have further increased online shopping and put severe stress on supply chains due to the steps taken by suppliers and logistics providers across the supply chain to implement artificial intelligence and smart analytics to control the operations and business processes.
The retail industry has undergone a digital transformation during this COVID-19 pandemic. Many of the market players have started offering solutions for efficient product supply, intelligent in-store supply, financial forecasting, and customer demand forecasting, therefore the global market is estimated to showcase an average growth rate during the pandemic.
Some of the key players in the smart retail market are INTEL CORPORATION, IBM, Samsung Electronics, AMAZON, Google, Inc, MICROSOFT CORPORATION, SOFTBANK ROBOTICS HOLDINGS, Ingenico S.A., Verifone Systems, NCR Corporation, Cisco Systems, Inc., NXP Semiconductors N.V., Huawei Investment & Holding Co., Ltd, NVIDIA Corporation, Samsung Electronics, PTC, Inc., Trigo, Standard Cognition, Caper Inc., Zippin, Walmart Inc., Alibaba Group Holding Limited, and Albert Heijn BV (Ahold Delhaize).
• Intel Corporation partnered with ARENA15 (Las Vegas), an experiential shopping and entertainment center, in January 2020. AREA15 hopes to enhance consumer shopping experiences by leveraging Intel's technologies and solutions.
• Walmart Inc. announced a collaboration with Bossa Nova Robotics, a Bay Area-based company, in January 2020 to offer shelf-scanning inventory robots to 1,000 Walmart stores throughout the United States.
• Standard Cognition and Mars Wrigley, a company that makes chocolates, chewing gums, mints, and fruity confections, announced a collaboration in November 2019 to assist Mars Wrigley with autonomous checkout solutions.
Source: VynZ Research