The retail analytics market is expected to grow from USD 5.84 billion in 2021 to USD 18.33 billion in 2028, at a CAGR of 17.7% in that period. This is due to the growth of e-commerce, digitisation of retail stores, and the need to improve consumer experience to earn and maintain customer loyalty.
The retail sector has already started a data culture where c-suite management teams are seeing the value in collecting data across omnichannel. Modern AI technology can track consumers’ shopping behaviour and spending habits online and offline in real time, with high accuracy. With this data, retailers are able to improve personalisation, store layout, merchandising, predictive analysis, strategic decisions and more.
For example, predictive analysis is essentially tracking buying patterns, sales, and emerging trends using historic data and real-time data. Such insights help retailers understand shopper preferences which they can use to create a good shopping experience for consumers, leading to more loyal customers as well as increased revenue.
Privacy regulations such as the General Data Protection Regulation (GDPR) may hinder the growth of the retail analytics market. It is already becoming increasingly difficult for retailers to gain access to consumers’ personal data as consumers become more concerned with privacy and limit access.
One solution is the concept of decentralised identity (DI) which will give consumers ownership over their personal data. DI will make it much easier for consumers to choose the information they share with retailers and they can also monetise it by selling information to advertisers and retailers. This could act as an incentive for the growth of DI in the future.
There is potential for retail technology growth in the coming years but there are also hindrances. Retailers need to be ready for digitisation by focusing on the key building blocks of data culture, including proper data governance, data literacy programmes, and encouraging a data-driven mindset within businesses. Similarly, technology providers must build responsible, privacy-preserving, and secure technologies in order to remain relevant in the mid-long term.