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Retail Digital Transformation Market is Expected to Surpass US$ 555.21 Bn by 2031

Retail Digital Transformation Market is Expected to Surpass US$ 555.21 Bn by 2031 - Coherent Market Insights

Publish In: Jul 03, 2024

The Retail Digital Transformation Market is estimated to be valued at US$ 180.23 Mn in 2024 and with CAGR of 17.4% over the forecast period 2024-2031. Growing penetration of internet and rising preferences of consumers towards online shopping have positively impacted the growth of e-commerce sector. Furthermore, implementation of advanced technologies such as artificial intelligence, big data analytics, augmented and virtual reality by retailers is a key trend being observed in the market.

Market Dynamics:

The growth of the retail digital transformation market is driven by the rising e-commerce sales and growing adoption of advanced technologies by retailers. E-commerce sales have witnessed significant growth over the past few years owing to wide availability of products online and door-step delivery convenience provided by various online retailers. According to recent survey, global e-commerce sales are estimated to reach USD6.5 trillion by 2025. Growing preference of consumers towards online platforms for various products ranging from daily essentials to luxury items is promoting retailers to adopt digital solutions to enhance their online presence. In addition, implementation of technologies such as AI, big data analytics, augmented reality, and virtual reality by retailers helps in providing personalized shopping experience, predictive analysis, and improving operations efficiencies. These factors are expected to propel the demand for digital transformation solutions in the retail industry during the forecast period.

Market Drivers: Rising Need for Personalized Shopping Experiences

Customers today expect a personalized shopping experience that is tailored to their individual needs and preferences. With digital transformation, retailers can gain valuable customer data insights through technologies like AI and machine learning. This allows them to better understand customer behavior and personalize every step of the shopping journey from product recommendations to offers and promotions. By delivering highly customized and convenient experiences, retailers can increase customer retention, engagement and sales.

Market Driver: Growing Emphasis on Omnichannel Integration

Customers now freely move between online and in-store channels for different aspects of shopping like research, purchases and post-purchase services. To provide a seamless experience, retailers need to integrate these channels and present a unified face to customers. Digital transformation helps retailers break down data and operational silos to enable true omnichannel integration. Technologies like cloud computing facilitate data sharing across channels while technologies like mobile point-of-sale allow for a consistent interface. This omnichannel approach helps retailers offer consistency, choice and convenience to cater to evolving customer expectations.

Market Restraints: High Upfront Investment Requirements

A digital transformation initiative requires large upfront investments in technologies, infrastructure, training and expertise. Retailers need to invest in cloud platforms, mobility solutions, AI/ML tools, robust IT infrastructure and digital skills. The costs associated with undertaking major changes to existing systems and processes can also be substantial. For many small and medium retailers, allocating such a large capital expenditure poses significant challenges.

Market Restrains: Resistance to Organizational Change

Digital transformation not only changes technologies but often impacts organizational culture, structures, roles and way of working. This degree of change can meet resistance from employees who are hesitant to adapt to new working styles and processes. It is difficult for many established retailers laden with legacy systems, processes and mindsets to drive such deep-rooted change. Overcoming entrenched behaviors, attitudes and internal politics requires strong change management strategies and time.

Market Opportunities: Emerging Technologies Driving Innovation

Continuous evolution of technologies is opening up new opportunities for retailers. From predictive analytics and AI to IoT, AR/VR, blockchain - digital disruptors are enabling innovative business models and customer experiences. For instance, use of IoT allows real-time inventory tracking, predictive maintenance of infrastructure while AR/VR enables virtual product trials and gaming elements for engaging customer experiences. Early adoption of emerging technologies gives retailers a competitive edge.

Market Opportunities: Growing E-commerce Channel

The e-commerce channel has seen phenomenal growth worldwide driven by increasing internet and smartphone adoption. Modern customers heavily rely on online channels for information gathering and purchases. This virtual marketplace provides a massive opportunity for digital-first and omnichannel retailers to tap into new customers beyond geographical limitations. By optimizing the online storefront, payment options and fulfillment, retailers can gain a large slice of the e-commerce pie.

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Key Developments:

  • January 2022: Toshiba Global Commerce Systems showcased an extensive expansion of its ELERATM integrated commerce platform at the National Retail Federation Conference. This advancement represents a new era of retail technology characterized by flexibility, connectivity, and adaptability, accelerating the digital transformation journey for retailers.
  • In August 2022, Globant, a company specializing in digital solutions for businesses, launched its Retail Studio. This new offering is designed to help retailers stay ahead of industry trends by providing tools for complete transparency and automation in the supply chain. It also aims to redefine retail through phygital interactions, which combine physical and digital elements to enhance consumer engagement.
  • In February 2022, Inmar Intelligence, a technology company focused on industrial data, announced that Smart & Final, a grocery store retailer, is using Inmar Intelligence's promotional tools. These tools allow Smart & Final to offer targeted and trackable digital discounts and offsite media. Inmar Intelligence handles rewards, offsite marketing targeting, execution, and measurement for Smart & Final.

Key Players:

Cerner Corporation, IBM Corporation, UnitedHealth Group, Aetna, Inc., Allscripts Healthcare Solutions, Inc., Epic Systems Corporation, McKesson Corporation, Verisk Health, ZeOmega, Inc., eClinicalWorks, Inc., NextGen Healthcare, Athenahealth Inc., Constellation Software Inc., Optum, Inc, COTIVITI, INC, Verisk Analytics, Inc.fa

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