Smart retail is the use of the Internet and Internet of Things technologies to perceive consumption habits, predict consumption trends, guide manufacturing, and provide consumers with diversified and personalized products and services. The development of smart retail lies in three major aspects. One is to embrace the technology of the times, innovate the retail format and change the distribution channels; the second is to shift from B2C to C2B to realize big data traction retail; the third is to use socialized customer service to achieve personalized service and precision marketing. With the development of artificial intelligence, big data, cloud computing, the Internet of Things, and other technologies, the retail industry is staged a revolution that focuses on smart retail.
The global smart retail market generated size was estimated at USD 14.08 billion in 2019 and anticipated to generate USD 79.84 billion by 2027, registering a CAGR of 19.99% during the forecast period. The rising adoption of robotics and automation in the retail and changing customer experience will foster the growth of the smart retail market. Furthermore, the growth and the integration of technologies such as augmented virtual reality, IoT, and artificial intelligence will positively impact the global smart retail market share. Additionally, the growing demand for advanced retail technologies to recapture lost market share, attract more consumers into the store, and improve customer retention are projected to propel the growth of the smart retail industry. The technological advancement in the retail industry, such as RFID tags and data analytics to improve inventory management, and sensor to monitor goods on the move will stimulate the market share.
Further, the upsurge in demand for predictive equipment maintenance in the smart retail market to help in predicting the equipment’s condition and accordingly schedule next maintenance services will boom the market growth in the future periods. The rising adoption of IoT and AI, smart retail industries for streamlining the operations, and better customer experience are anticipated to enhance the smart retail demand. IoT based smart retail led to a significant transformation in operations of the retail sector, such as provide customers with the experience of shopping with no checkout lines or cashiers.
Artificial intelligence bridges the gap between virtual and physical sales for merchants. In the retail industry, major brands are gradually applying artificial intelligence to reduce costs, increase efficiency, achieve operational flexibility, and increase decision-making speed. The artificial intelligence algorithm can predict the products that should be added to the retailer’s inventory by analyzing the product categories of competitive brands and comparing these products with customer demographics and shopping history.
Additionally, artificial intelligence software that simplifies the sales channel and sets up an automated sales assistant to increase service revenue through business. Due to artificial intelligence, there are digital mirrors, which can scan the code on the clothes in the fitting room, and directly contact the floor staff for help.
The retail industry is in a unique opportunity to benefit from the intersection of artificial intelligence, machine learning, and big data. In this industry, it is necessary to manage and track a large number of products in various categories, track consumer shopping habits, and, most importantly, operate a brand that continues to attract repeat customers. They will enable consumers to repurchase more goods and help retailers anticipate demand and make supply decisions in advance.
Machine learning algorithms can more accurately describe the causes of errors, identify abnormalities such as missing data or communication errors, and find the precise location of each error in the supply chain. Location intelligence is reshaping the way retailers plan distribution routes. Because real-time data must be collected and adjusted and decided based on current conditions, route planning is another key area that can benefit from data analysis.
Based on the system, the global Smart Retail market classified into smart payment systems, digital signage solutions, intelligent vending machines, smart labels, augmented reality solutions, virtual reality solutions, POS solutions, smart carts, robotics and analytics. The robotics segment captured the largest market share in 2019 and will witness significant growth in the forecast period. It is primarily attributed to the surge in usages of robotics in supermarkets, hypermarkets, and other retail stores to make the shopping experience easy for consumers.
Smart payment systems will be the fastest-growing segment in the projected period due to the growing adoption of the smart payment system by retailers to offer their customers with smooth and easy checkout.
By the application, the global smart retail market segregated into foot-traffic monitoring, inventory management, predictive equipment maintenance, smart fitting rooms, brand protection, and loyalty management and payments. The foot-traffic monitoring segment accounted for lucrative market share in 2019 and likely to dominate the global smart retail market by 2027. It is due to the foot-traffic monitoring helping the retailers about the different aspects of stores, such as the effect of marketing efforts and helps them plan growth strategies based on the purchase history of customers.
The smart fitting rooms will capture a momentous CAGR in the forecast period. It is owing to smart-fitting rooms adopted by apparel and accessories retailers to reduce the shopping time and the displeasure of customers.
Based on retail offerings, the global smart retail market categorized into fast-moving consumer goods, apparel and accessories, and hardlines & leisure goods. The fast-moving consumer goods segment estimated to lead the market by 2027 due to the growing population, and the surge in disposable income has led to the rise in demand for these goods.
By geography, the global smart retail market segmented into North America, Europe, Asia Pacific, South America, and Middle East & Africa. North America estimated to be expected to be the leading revenue contributor in the market throughout the forecast period. It is owing to the presence of a large number of supermarkets, hypermarkets, departmental stores, and other types of retail stores in these regions, which have implemented the smart retail solution such as POS solutions, automatic storage and retrieval systems, smart cards, electronic shelf labels, etc.
The Asia Pacific will be the fastest-growing segment in the global smart retail market by 2027. It is the presence of numerous small and mid-scale retailers in the region and growing deployment of smart retail solutions, including shopping guide robots, reception robots, intelligent dressing mirrors, and big data analytics in the region.
Companies such IBM, Intel Corporation, Cisco Systems, Inc., NXP Semiconductors NV, Microsoft, Huawei Investment & Holding Co., Ltd, NVIDIA Corporation, Samsung Electronics, Google Inc., PTC, Inc., Trigo, Standard Cognition, Caper Inc., Zippin, Walmart Inc., Alibaba Group Holding Limited, Amazon.com, Inc., and Albert Heijn BV (Ahold Delhaize) are the key players in the global smart retail market.
By Retail Offering