SMART RETAIL MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)

Smart Retail Market Size and Forecast – 2024-2031

The global smart retail market is estimated to be valued at USD 31.22 Bn in 2024. The market is expected to reach USD 155.25 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 25.7% from 2024 to 2031.

Key Takeaways of the Smart Retail Market:

• The hardware segment is expected to account for 50.3% of the market share in 2024
• The IoT solutions segment is expected to capture a significant 43.5% share of the smart retail market in 2024
• The inventory management segment is expected to accounts for 38.6% of the market share in 2024
• North America is projected to lead the global market with a 35.5% share in 2024, followed by the Asia Pacific region, which is expected to hold a 30.8% share

Market Overview:

The introduction of advanced technologies such as artificial intelligence, Internet of Things (IoT), and predictive analytics has boosted the growth of this market. The market is witnessing increased adoption of digital solutions across the retail supply chain. Technologies like AI and IoT enable automated product recommendations, digital payment options, and personalized customer experiences in physical stores. Many retailers are investing in digitization to stay competitive in the evolving retail landscape and attract more customers with an omnichannel experience.

Segmental Insights

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Solution Insights - Efficiency and cost-effectiveness drive the dominance of hardware in solutions

In terms of solution, the hardware segment is expected to contributes 50.3% share of the market in 2024, owing to its effectiveness in optimizing inventory management and supply chain operations. Hardware solutions such as Radio Frequency Identification (RFID) tags, beacons, and electronic shelf labels help retailers precisely track stock levels and automate replenishment processes. This enables real-time visibility of inventory across physical stores and warehouses. Out-of-stock incidents are minimized, filling rates are maximized, and overstocking is avoided.

Technology Insights - Key technologies driving operational efficiency and real-time inventory management in smart retail

In terms of technology, the IoT solutions segment is expected to hold a commanding 43.5% share of the market in 2024, driven by the demand for enhanced operational efficiency and real-time inventory management. Key technologies, including RFID, electronic shelf labels (ESLs), and automated conveyor systems, seamlessly connect physical inventory to digital platforms. These innovations enable retailers to track stock levels across multiple channels, predict demand trends, optimize replenishment, and reduce wastage.

Application Insights - Enhanced customer experience through inventory management applications

In terms of application, the inventory management segment is expected to contribute 38.6% share of the market in 2024, as it forms the core for elevating the overall customer experience. Technology-enabled inventory applications help achieve critical front-end objectives. Real-time visibility prevents out-of-stocks and enables stores to have demanded variants at all times. This positively impacts the purchase journey. Pick-to-light systems automate order fulfillment accurately reducing errors. Automated replenishment supports just-in-time inventory management bringing faster restocking. Personalized promotional strategies can be designed based on historical purchase patterns.

Regional Insights

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North America Smart Retail Market Trends

North America is projected to dominate the market with a 35.5% share in 2024. This leadership can be attributed to supportive government initiatives encouraging the digital transformation of conventional retail outlets. The widespread adoption of IoT-enabled technologies by major retailers in the region has significantly improved customer experiences and streamlined operational efficiency.

Asia Pacific Smart Retail Market Trends

Asia Pacific region is expected to capture a 30.8% market share in 2024, marking the fastest growth rate globally. Driven by countries such as China, India, and Japan, the region's rapid expansion is fueled by growing internet and mobile connectivity. Local companies such as Zebra Technologies Corporation are developing tailored solutions to meet the unique needs of the region's diverse market landscape.

Smart Retail Market Outlook for Key Countries

U.S. Smart Retail Market Trends

The U.S. is a leader in the smart retail market, driven by the rapid adoption of advanced technologies like AI and IoT. In May 2022, Amazon launched Smart Commerce in India, enabling offline retailers to create digital storefronts, showcasing the trend of integrating online and offline retail experiences. This initiative reflects the growing demand for seamless shopping experiences in the U.S. smart retail market.

China Smart Retail Market Trends

China is leveraging big data analytics and intelligent systems to enhance customer engagement. In March 2023, Alibaba introduced a new AI-driven retail solution aimed at improving inventory management and customer experience, highlighting the trend of technology integration in retail.

Germany Smart Retail Market Trends

Germany is witnessing significant growth in smart retail, primarily due to increasing consumer demand for personalized shopping experiences. In June 2023, SAP announced a partnership with various retailers to implement smart retail solutions that utilize real-time data analytics, enhancing operational efficiency and customer satisfaction. This collaboration underscores the trend of leveraging data for improved retail strategies.

India Smart Retail Market Trends

India smart retail market is on the rise, driven by the increasing penetration of smartphones and digital payment solutions. In January 2023, Reliance Retail launched a new platform integrating AR and VR technologies to enhance the shopping experience, reflecting the growing trend of immersive retail solutions. This initiative aims to attract tech-savvy consumers in the Indian market.

Japan Smart Retail Market Trends

Japan is rapidly adopting smart retail technologies, with a focus on enhancing customer experiences through automation and AI. In April 2023, Panasonic unveiled a smart retail solution that incorporates AI for inventory management and customer analytics, showcasing the trend of automation in retail operations. This development is expected to significantly improve efficiency in Japanese retail stores.

Market Players, Key Devlopment, and Competitive Intelligence

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Key Developments:

• In May 2024, Wipro Limited, a leading global information technology, consulting, and business process services company, announced significant upgrades to its Wipro VisionEDGE+ solution. Designed to enhance its capabilities in the retail sector, the improved platform focuses on driving retail transformation and maximizing the potential of retail media networks. Developed in collaboration with Cisco and AT&T and powered by Amazon Web Services (AWS), VisionEDGE+ highlights Wipro's commitment to enabling cutting-edge solutions for the evolving retail landscape.
• In April 2024, Fiserv, Inc., a global leader in payments and financial technology, introduced advancements to its Pix hub technology, tailored to businesses in Brazil. The updated solution facilitates seamless adoption of electronic person-to-business payments through an agnostic platform that empowers retailers to select their preferred Payment Service Providers (PSPs). Key updates include centralized management, high availability, and advanced security measures like fraud prevention and monitoring to reduce business risks. Additionally, Fiserv provides merchants with the flexibility to process Pix payments either through its own services or their selected PSPs, showcasing its innovative approach to streamlining digital payments.

Top Strategies Followed by Global Smart Retail Market Players

• Established Players: Large companies focus extensively on research and development to introduce innovative products.
• For example, Amazon invests heavily in developing autonomous stores with advanced computer vision and sensor technology. Companies also form strategic partnerships to strengthen their position. Amazon collaborated with Startup Anthropic to incorporate AI safely in its systems. Other major players like Walmart have expanded globally through acquisitions and partnerships to reach more customers internationally.
• Mid-Level Players: Mid-sized companies strive to provide cost-effective solutions for price-sensitive consumers. For example, Trigo Vision works with retailers to install its cashier-less checkout systems at an affordable cost. Companies also collaborate to augment their capabilities. Taiwan-based startup, PChome, partners with logistics firms and cloud providers to offer one-stop online shopping.
• Small-Scale Players: Emerging players focus on specialized market niches. For instance, AiFi sells its small autonomous stores suitable for small retailers. Some adopt cutting-edge technologies like computer vision from Scala and DeepBlue to offer advanced computer vision solutions. Local partners help gain traction. Einova works with Korean partners to deploy smart fitting rooms in the country.

Emerging Startups - Global Smart Retail Industry Ecosystem

• Innovative Technologies: Startups develop innovative technologies. Anthropic develops self-supervised learning to ensure AI safety. AiFi utilizes shelf-scanning cameras and product recognition for cashier-less stores.
• Sustainable Solutions: Startups focus on sustainability. TRASHin works with retailers to utilize smart containers monitoring trash levels. Package-free shops like Zero Market sell organic products in refillable packaging to reduce plastic waste. This contributes to reducing the industry's environmental impact.
• Market Contribution: Startups satisfy unique needs. Takeoff Technologies partners with retailers to develop automated order picking solutions to boost warehouse productivity. Collaborations also help drive innovation.

Market Report Scope

Market Dynamics

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Smart Retail Market Growth Factors

Increasing adoption of IoT and AI technologies in retail operations

The retail sector has seen a gradual rise in the use of emerging technologies such as Internet of Things (IoT) and Artificial Intelligence (AI) in their day-to-day operations over the past few years. IoT enables retailers to gather real-time data from various store assets like shelves, refrigerators, CCTV cameras, etc. This data helps retailers gain insights into customer shopping habits, plan their inventory better, optimize store layout, and improve customer experiences inside the store. Many large retailers have deployed IoT-enabled sensors across their stores which not only monitor stock levels but also track ambient conditions like temperature and queue lengths. This helps them ensure optimal inventory levels as well as address congestion issues inside shops.

Smart Retail Market Challenge - High implementation costs associated with smart retail technologies

One of the major challenges currently facing the market is the high implementation costs associated with emerging smart retail technologies. Integrating advanced technologies such as IoT, AI, cloud computing, big data analytics, and mobile interfaces into existing retail infrastructure requires significant capital investment. Upgrading legacy systems, networks and processes to support new smart capabilities can be an expensive undertaking, especially for smaller retailers. There are also ongoing operating costs associated with tasks like system maintenance, software/hardware upgrades, data storage, and employee training on new technologies.

Smart Retail Market Opportunity - Expansion of e-commerce and omnichannel retail strategies

One of the major opportunities for growth in the market is the continued expansion of e-commerce and omnichannel retail strategies. Consumers are increasingly comfortable shopping online and using digital devices throughout the buying process. They expect a seamless shopping experience both in-store and online, with centralization of products, pricing and customer data. To meet evolving consumer demands, retailers are investing heavily in technologies that facilitate omnichannel integration and personalized engagements across all touchpoints. This helps optimize inventory, enable buy-online-pickup-in-store, allow in-store product searches, and enable associate access to customer profiles.

Analyst Opinion (Expert Opinion)

• Rapid adoption of automation technologies across the retail sector is a major driver for this market. Retailers are increasingly automating their stores and supply chains to improve operational efficiencies and enhance customer experience. The growing demand for personalized shopping is also propelling retailers to invest in smart technologies like digital signage, beacons, and IoT.
• North America currently dominates the smart retail market due to high technology adoption. However, Asia Pacific is expected to be the fastest growing region owing to rapidly expanding retail industries in countries like India and China.
• Retailers need to ensure customer data collected through various digital touchpoints is kept private and secure. Lack of common IoT standards is another restraint as it limits interoperability of devices and platforms from different vendors. However, partnerships between retailers and technology providers present opportunities to overcome such restraints. Collaboration between industry players will help define IoT protocols and drive innovation.

Market Segmentation

• By Solution Insights (Revenue, USD Bn, 2019 - 2031)
• • Hardware
  • Software
• By Technology Insights (Revenue, USD Bn, 2019 - 2031)
• • IoT Solutions
  • Artificial Intelligence
  • Augmented Reality/Virtual Reality
  • Blockchain
  • Others
• By Application Insights (Revenue, USD Bn, 2019 - 2031)
• • Inventory Management
  • Visual Marketing
  • Smart Label
  • Smart Payment System
  • Others (Robotics, Analytics)
• Regional Insights (Revenue, USD Bn, 2019 - 2031)
• • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East
    • GCC Countries
    • Israel
    • Rest of Middle East
  • Africa
    • South Africa
    • North Africa
    • Central Africa
• Key Players Insights
• • Amazon.com, Inc.
  • Alibaba Group Holding Limited
  • IBM Corporation
  • Microsoft Corporation
  • SAP SE
  • Oracle Corporation
  • Intel Corporation
  • Cisco Systems, Inc.
  • Zebra Technologies Corporation
  • Toshiba Corporation
  • Siemens AG
  • Honeywell International Inc.
  • NCR Corporation
  • Samsung Electronics Co., Ltd.
  • Google LLC