May 25, 2024
Retail Digital Transformation Market

Retail Digital Transformation Market is expected to be Flourished by Adoption of Omnichannel Strategy

Over the past decade, the retail landscape has undergone a tremendous transformation with evolving consumer preferences and the rapid adoption of digital technologies across various touchpoints of the shopping journey. Digital technologies have disrupted traditional shopping methods and enabled retailers to connect with customers through various digital channels. The retail digital transformation involves implementing technologies to enhance customer experiences, optimize operations, drive sales, and gain real-time customer insights.

Technologies such as mobile point-of-sale (mPOS), digital signage, customer relationship management (CRM) systems, inventory management systems, and other sales optimization solutions help retailers to improve workforce productivity, inventory management, enhance customer experiences, and transition to an omnichannel selling model.

The global retail digital transformation market is estimated to be valued at US$ 8329.62 Mn in 2024 and is expected to exhibit a CAGR of 6.7% over the forecast period 2024 to 2031, as highlighted in a new report published by Coherent Market Insights.

Market Dynamics:

The growing adoption of omnichannel retailing strategies is expected to drive the growth of the retail digital transformation market over the forecast period. Omnichannel retailing strategies allow customers to conduct seamless transactions across various touchpoints such as online platforms, physical stores, mobile apps, social media, and other digital channels. It offers a consistent and unified shopping experience to customers enabling them to research products online, check inventory & store details, and complete purchases through various channels. However, high initial investment and execution challenges related to integrating legacy systems with modern technologies pose major challenges for the growth of the market.

In addition, emerging technologies such as blockchain, artificial intelligence, and IoT presents immense growth opportunities for retailers to utilize these innovations to further enhance operational efficiencies and customer experiences. For instance, IoT-enabled solutions enable real-time monitoring of inventories, energy consumption, and predictive maintenance of equipment in physical stores. AI and machine learning algorithms help retailers to gain valuable insights on customer behavior and demand patterns for targeted marketing and demand forecasting.

Segment Analysis

The retail digital transformation market is dominated by the large enterprise segment, holding around 60% share globally. Large enterprises are actively investing in digital technologies to enhance customer experience and maximize revenue. Advanced technologies like AI, IoT, analytics enable large retailers to gain real-time insights into customer behavior and optimally manage their inventory, supply chain and sales. The small and medium enterprise segment is also growing steadily as emerging technologies become more affordable and accessible. However, their technology adoption is still at a relatively nascent stage compared to large retailers due to lack of funds and technical expertise.

PEST Analysis

Political: Governments around the world are strongly promoting digitalization of the retail sector through initiatives aimed at funding startups, building digital infrastructure and skills. This is expected to accelerate technology adoption across retail stores.
Economic: The post-pandemic economic recovery is fueling consumer spending, benefiting the retail industry. However, inflationary pressures may dampen overall retail sales growth in the coming years.
Social: Younger consumers are highly digital-savvy and demand seamless omnichannel experience. Their strong influence is propelling retailers to revamp their business models using technologies like AR/VR and social selling platforms.
Technological: Emerging technologies like Web 3.0, blockchain, AI-powered predictive analytics, robotics and automation are disrupting traditional retail operations. Retailers are aggressively experimenting with new technologies to personalize offerings and streamline operations.

Key Takeaways

The global retail digital transformation market is expected to witness high growth supported by increasing digitalization of retail operations. Global Retail Digital Transformation Market Size is estimated to be valued at US$ 8329.62 Mn in 2024 and is expected to exhibit a CAGR of 6.7% over the forecast period 2024 to 2031.

Regional analysis: North America dominated the retail digital transformation market in 2021 owing to high internet penetration and strong consumer preference for digital shopping experiences in the region. Asia Pacific is anticipated to be the fastest growing regional market between 2024-2031 led by China, India and other Southeast Asian countries. Rapid expansion of e-commerce, malls and convenience stores will drive technology investments in the retail sector.

Key players: Key players operating in the retail digital transformation market are Bio Bidet, Kohler Co., Inc., HomeTECH, Toshiba, LIXIL Corporation, Coway Co., Ltd, Roca Sanitario SA, Panasonic Corporation of America, RinseWorks, Inc, Brondell Inc., and TOTO USA, Inc. These firms are focused on developing advanced digital solutions including AR/VR, IoT, cloud and analytics to help retailers personalize offerings, enhance operational efficiencies and build stronger customer relationships.

*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it