Retail Cloud Market Size, Share & Segmentation, By Component (Solution, Services), By Service Model Type (SaaS, PaaS, IaaS), By Deployment (Public Cloud, Private Cloud, Hybrid Cloud), By Organization Size (Large Enterprises, Small & Medium Size Enterprises), by region, and Global Forecast for 2024-2031

Retail Cloud Market Report Scope & Overview:

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Retail Cloud Market size was valued at USD 53.37 billion in 2023 and is expected to grow to USD 247.7 billion by 2032 and grow at a CAGR of 18.6% over the forecast period of 2024-2032.

The growing adoption of cloud computing among retailers, which provides them with cost effective and efficient solutions to their operations is the main reason for this growth. In addition, the demand for scale and flexibility in the retail sector, which can be provided by cloud technology,  Software as a Service (SaaS), Supply Chain Management (SCM), is growing, enabling businesses to adapt quickly to changing market conditions. The retail sector is beginning to adopt advanced solutions, thanks to the introduction of modern technology.

Market Dynamics

Key Drivers:  

• Increasing the adoption of Multicloud Architecture

As businesses seek to take advantage of the advantages offered by using a number of clouds services providers, more and more retailers are adopting this approach. In order to support both online and offline brick and mortar operations, the retail sector has specific requirements, such as the need for scalable, flexible and secure IT infrastructure. Multicloud environments enable retailers to configure their IT infrastructure according to their specific needs, while also reducing the risk of down time, data loss and security breach.

Restraints:

• Integration of cloud-based systems into legacy systems

One of the main obstacles to adoption of cloud or private cloud, computing systems in retail is that they must be integrated with legacy systems. Over the years, many retailers have been investing in legacy systems and these are often used for important functions like inventory management, order processing or payment processing.

Opportunities:

• Increase focus on Omnichannel experience

The Omnichannel retailing model describes a way of connecting customers to different sales and advertising channels. Omnichannel is designed to create a coherent user experience by connecting all communications channels between the enterprise and its customers. In the salesforce study, 73% of consumers choose multiple channels during their shopping journey. This is why retailers are focused on improving Omnichannel experiences.

• The adoption of new retail technologies

Challenges:

• Complexity and data security concerns

• Consumer Preferences Are Constantly Changing

Impact of Economic Slowdown:

Soaring inflation, a 40-year high, presents a complex decision-making environment for retail executives. Initial pandemic stimulus programs, ongoing supply chain issues, and the war in Ukraine, all of which have rapidly driven up energy and commodity prices. India's massive retail sector, a 10% contributor to GDP and employer to 8% of the workforce, is characterized by a stark contrast. 80% of its 15 million outlets are small, family-run stores, representing the traditional retail landscape. However, modern retailers are making a bold move, aiming to increase their market share from 4% to 15-20% within the next four years, backed by significant investments exceeding $25 billion. A global recession looms, casting a shadow over India's retail sector. Consumer confidence has plunged to a five-year low, mirroring rising inflation and a slowdown in spending, the lifeblood of the economy. This translates to shrinking profits and declining sales for retailers. The negative impacts extend beyond retail. Manufacturing is also taking a hard hit, and tourism experiences a 10.3% drop in bookings, highlighting the interconnectedness of the economy.

Impact of Russia Ukraine war:

In Ukraine, the technology sector has been one of the fastest growing markets in the world and accounts for more than 4% of GDP prior to the Second World War. In 2021, the Ukrainian IT development sector exports $6.8 billion in information technology services. With an increase of 36% compared to the previous year.

drawn in by the country’s lenient and supportive governance model, favourable tax policies, and the growing technology sector.

The crisis is likely to be a boost for tech talent. One of the preferred destinations of global technology companies was migration as Ukraine, before the invasion. A skilled workforce and relatively low operating costs are key to the success of Ukraine's IT and offshore sectors. As a result, leading technology companies have set up subsidiaries and offshore service centres.

The initial shock has led to a surge in energy prices, and the sudden shortage of raw materials and staple crops is pushing up consumer costs around the world, which have been compounded by inflationary effects caused by the global supply chain crisis.

Russia's invasion of Ukraine sent shockwaves through the global economy, with energy prices surging by insert a specific percentage based on a reliable source, e.g., 30%. This compounded existing inflation, already at a year high (insert the number of years, e.g., 10-year high), fueled by supply chain disruptions.  Global recession Retail confidence fell to its lowest level in five years, a sign that the key sector may be entering an economic downturn. Profit margins were squeezed and sales were expected to fall as a result of rising inflation and slower consumer spending, the main driver of economic growth. The retail industry's going down. A severe blow has been dealt to the manufacturing sector. This has also affected the tourism sector. Hotels have already reported 20-25 % cancellation from international tourists.

Market Segmentation:

By Component

• Solution

• Customer Management

• Supply Chain Management

• Workforce Management

• Data Security

• Others

• Services

• Professional Services

• Managed Services

In 2023, the solution segment accounted for 64.8% of global sales. The increasing demand for customer management, supply chain management, workforce management and data security solutions can be blamed for this high proportion. By offering personalised experiences and tracking data, customer management solutions increase loyalty, satisfaction and retention.

By Service Model Type

• SaaS

• PaaS

• IaaS

The largest market revenue share of 62.8% in 2023 was held by the Software as a Service (SaaS)Segment. The application of subscription models, reductions in hardware, software licenses and IT infrastructure costs provides cost effectiveness for SaaS solutions. Without major investments, retailers can scale up their operations with Software as a Service and add or remove features and users where necessary.

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By Deployment

• Public Cloud

• Private Cloud

• Hybrid Cloud

By Organization Size

• Large Enterprises

• Small & Medium Size Enterprises

In 2023, the largest market revenue share of 50.2% was accounted for by large enterprises. Their high share can be attributed to their substantial resources and infrastructure, which enable them to effectively adopt and use retail cloud Market. Scalable and flexible cloud computing provides large enterprises with the opportunity to enhance customer experience, streamline operations.

REGIONAL ANALYSIS:

In 2023, North America accounted for a 39.8% share of the market. The United States and Canada are emerging as promising growth centres in the region. The dominance of the region can be attributed to increasing cloud adoption, an increased use of omnichannel shopping practices and growing demand for data analysis and insight in this sector.

Significant growth is expected in the Asia Pacific market. In the Asia Pacific, this growth is driven by a growing demand for cloud-based services from SMEs. Small and medium sized businesses recognise the benefits of cloud computing solutions, which are driving market growth by adopting them to improve their efficiency and competitiveness. Strong economic growth, rapidly increasing internet penetration and adoption of mobile phones are also occurring in countries such as China, India or Japan. In turn, the demand for effective retail cloud solutions to support the booming e commerce sector is driven by this. The demand for retail cloud solutions is further supported by the significant investments made by governments and business in cloud infrastructure.

REGIONAL COVERAGE:

North America

• US

• Canada

• Mexico

Europe

• Eastern Europe

  • Poland

  • Romania

  • Hungary

  • Turkey

  • Rest of Eastern Europe

• Western Europe

  • Germany

  • France

  • UK

  • Italy

  • Spain

  • Netherlands

  • Switzerland

  • Austria

  • Rest of Western Europe

Asia Pacific

• China

• India

• Japan

• South Korea

• Vietnam

• Singapore

• Australia

• Rest of Asia Pacific

Middle East & Africa

• Middle East

  • UAE

  • Egypt

  • Saudi Arabia

  • Qatar

  • Rest of Middle East

• Africa

  • Nigeria

  • South Africa

  • Rest of Africa

Latin America

• Brazil

• Argentina

• Colombia

• Rest of Latin America

KEY PLAYERS:

The major key players are Syntel, Oracle Corporation, Microsoft Corporation, SAP SE, IBM Corporation, Cisco Systems, Google Inc, Accenture, Fujitsu Global, Infor Inc & Other Players

Recent Developments:

• Flipkart Internet Private Limited launched the 'Flipkart Commerce Cloud' platform, which offers retail technology solutions specifically designed for global retailers, markets and e commerce platforms, during October of 2023. In order to help global retailers expand their businesses through the implementation of smart and AIdriven solutions, the main objective is to support them in tackling different business problems.

• The EY Retail Intelligence solution, based on Microsoft Cloud and cloud for retail services, was introduced in January 2023 by Ernst & Young Global Limited. The solution, showcased at the National Retail Federation's "Big Show" event, is designed to offer consumers a seamless and user-friendly shopping experience.

• At the NADA Expo in Dallas, Texas during January 2023, Eccentric presented its latest innovation, a Virtual Retail Cloud for Distributors, an experience platform specialising in Digital Auto Sales. This is the first time that this product has been introduced to North America from Indonesia, Japan, South Africa and Oman in recent years.