Global Smart Retail Market to Reach $39.6 Billion by 2024

Smart retail is a novel retail concept that strives to combine the conventional shopping methods with modern smart technologies. Leveraging the Internet of Things (IoT), data is gathered by way of communication between computers and implanted devices, which in a way results in consumers enjoying a more personalized, quicker, and smarter experience. Full-fledged implementation of smart retail-related processes holds immense potential to alter the dynamics in the retail industry. In fact, many conventional retailers and industry leaders have already acknowledged Retail 4.0, (the Industry 4.0 version of retail sector), smart retail, and their core features to be the reliable solution to various issues endemic to retail business operations. For instance, factors such as transparency, decentralization, and optimization, all play vital roles in a modern Smart Retail platform.

Smart Retail ecosystem, comprising visual marketing technologies, smart labels, smart payment systems, and intelligent systems, strives to empower brick-and-mortar retailers to attract more number of consumers into the store, improve customer retention, and effectively compete with online retailers and focus on recapturing lost market share. By incorporating smart retail technology, physical retailers can seamlessly attract, engage, and convert prospective visitors into shoppers. Smart retail technology enables physical retailers to display pop-ups and targeted promotional messages on in-store screens specific to preferences of shoppers and visitors, while creating awareness and enhancing in-store engagement. Implementation of end-to-end Smart Retail solution typically aids retailers to gain from quality, output sustainability, and overall efficiency benefits. Smart retail platform will typically have its impact on supply chain adaptation, workforce skill alteration, and IT security, among others.

Amid the COVID-19 crisis, the global market for Smart Retail is projected to reach US$39.6 Billion by 2024, registering a compounded annual growth rate (CAGR) of 22.4% over the analysis period. Europe represents the largest regional market for Smart Retail, accounting for an estimated 34.6% share of the global total. The market is projected to reach US$15.9 Billion by the close of the analysis period. The United States is forecast to emerge as the fastest growing regional market with a CAGR of 26.1% over the analysis period.

Growing investments on digital technologies by retailers across the world, and rising incorporation of technologies such as augmented reality (AR), virtual reality (VR), artificial intelligence (AI), and IoT into retail environments to improve store operations, simplify accurate inventory management, and augment shopping experience of consumers, will have a major bearing on growth and progress of the Smart Retail Market. IoT is one such novel technology that laid strong foundation to ongoing transformation in sector operations and rise of Smart Retail concept. A growing number of retailers are actively investing in IoT solution to capitalize the potential of the retail industry. For example, Amazon rolled out Amazon Go, a smart grocery store that leverages IoT technology to offer customers with superior shopping experience while invalidating the need for checkout lines or physical cashiers. IoT technology is poised to escalate in the retail sector on the back of stupendous advantage offered, despite concerns over data security. While IoT is likely to solidify its role in Smart Retail ecosystem, other novel technologies such as AR, VR, and AI are likely to proliferate more aggressively in the coming years. Surging investment in the retail sector, growing use of smartphones, growing retailer focus on connecting directly with customers, and rising focus on offering improved shopping experience and customer services are some of the major factors poised to drive growth in the market.

With major retailers increasingly adopting the Smart Retail technology to cater to their customers in a better way and seamlessly improve their business operations, and small- to mid-sized retailers following the suite, opportunities galore for Smart Retail solutions market. Brick-and-mortar retailers are proactively collecting customer data and are assessing the customer behavior to personalize shopping experience patterns. Simultaneously, retailers are also adopting technologies such as NFC payments, mPOS, and beacons to greet customers by their name and also to provide them with relevant in-store information. Progressive improvements to new generation and next generation IT solutions that aid in real-time messaging, communication and engagement in retail environments is also contributing to progressive growth in Smart Retail marketplace.

A key challenge to making customers to perform online purchases is that most of them prefer to touch, or try on the item they purchased. In this scenario, smart retail solutions such as AR and VR are helping to address this issue by enabling customers to experience the product, without actually holding it. Although several customers do not yet have access to AR or VR technology, the technology has significant potential, particularly for the customers who cannot go to physical stores to make purchases. In the last few years, retailer focus on customer services has surged, thus paving way for wider adoption of smart retail. Customer service has transitioned from answering customer queries to understanding the preferences and needs of customers. The growing need for sophisticated retail services is fueling the smart retail market in a significant manner. New and next generation retail concepts such as `Connected Retail`, `Retail Automation`, and `Retail 4.0`, all of which emphasize improving the customer service and ultimately the experiences and loyalty quotient are poised to accelerate the adoption of Smart Retail technologies.