Digital Transformation Market In Retail - Growth, Trends, COVID-19 Impact, And Forecasts (2021 - 2026)

The Global Digital Transformation Market in Retail was valued at USD 143.55 billion in 2020 and expected to reach USD 388.51 billion by 2026 and grow at a CAGR of 18.2% over the forecast period (2021 - 2026). The advent of digital technologies for collection, storage, analysis and distribution of information has created new dynamics in the digital transformation of the retail market. These digital technologies also raised numerous new opportunities for vendors serving the market as an organization requires an efficient and easy work process owing to the increase in the worldwide liberal trade policies and end-users.

- The rapidly increasing internet penetration is a key factor contributing to the growth of the market over the forecast period.
- Increase in the use of smart gadgets and incremental technological advancements will pave the way for growth in this market by making this technology more accessible to the small/medium-scale retail organizations.
- The developing economies of Asia-Pacific, Middle East, and Latin America have been instrumental in driving the market growth, particularly with growing purchasing powers of the consumers in China, India, and Saudi Arabia, among others.

Key Market Trends

Beauty and Personal Care to Hold Significant Share

- The retail industry has witnessed a tremendous growth in developed countries, such as China, the United States, the United Kingdom, Japan, and Germany (followed by others), who are capturing the lion’s share. People in the age group of 18-50 years are continuously engaged in shopping, thus contributing to the growth of the beauty and personal care segment. All these trends together offer a platform for growth for the beauty and personal care market.
- As the standards of living have been improving, consumers are being able to pay more attention to their health, personal hygiene and grooming. This makes the beauty and personal care products market one of the hottest places in their shopping activity. This also provides a better opportunity for the beauty and personal care manufacturers to expand and seize the growing market opportunities.
- Owing to the increase of penetration of technology among various age groups across the countries, the retail domain has become an integral part of cosmetic products. Free returns and wide delivery options are focused on by retailers, adding value to the segment. Retail outlets continue to expand their product line (ranging from Haircare, Body care, Face care, Alcoholic perfumery and hygiene products) with specifications and effective price comparison provided to the consumers.

North America Expected to have Highest Market Share

- North America is expected to cater major share due to rapid increase in the number of small and medium-sized enterprises and the continuous expansion of the service industry.
- The retail market in the region is growing at a fast pace with retail trade accounting for more than 10% of the GDP in both the United States and Canada. The retail market in North America is one of the biggest with Wal-Mart, Costco, Kroger, The Home Depot and Target having their origins from this region.
- The retail industry is going through a significant change with the internet being accessible on various devices like smartphones, tablets, and laptops. According to Internet World Stats, there are around 320 million internet users in the region. In 2017, nearly 75% of internet users in the United States had purchased products online due to the personalized experience provided to them.
- Online shopping is growing in the region with more and more retailers coming onto the internet to sell their products. To sustain the intense competition in the industry many of the retailers are seeking to provide a personalized experience for which they are employing retail analytics.

Competitive Landscape

The digital transformation in retail market is highly competitive. The companies in the market are strategically investing in the development of digital transformation tools to provide innovative solutions thereby maintaining a competitive edge.

- March 2019: SAP SE launched Leonardo Internet of Things (IoT) capabilities and announced the extension of its association with Microsoft on IoT interoperability. The new technology creates and drives digital transformation for Industry 4.0 or Industrial IoT (IIoT).

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