Smart Retail Market Analysis Report By Application (Smart Label, Visual Marketing, Smart Payment System, Intelligent System), By Solution (Software, Hardware), And Segment Forecasts, 2018 - 2025

Industry Insights

The global smart retail market size was estimated at USD 10.74 billion in 2017. It is expected to register a CAGR of 23.9% from 2018 to 2025. Growing incorporation of technologies such as augmented reality, virtual reality, artificial intelligence, and IoT to improve store operations, facilitate accurate inventory management, and enhance consumer’s shopping experience is one of the key trends escalating market growth. These advanced retail technologies enable brick-and-mortar retailers to compete against online retailers, to recapture lost market share, attract more consumers into the store, and improve customer retention.

Major retailers such as Alibaba, Walmart, and Amazon are increasingly embracing smart retail technology to improve business operations and serve their customers better. Physical retailers are collecting customer data and analyzing customer behavior to personalize their shopping experience. Retailers are utilizing mPOS, beacons, and NFC technologies to greet customers by their name as well as to provide them with appropriate information.

With incorporation of smart retail technology, physical retailers are poised to be able to attract, occupy, and convert prospect visitors into shoppers. The technology allows them to display targeted promotional messages and pop-ups on screens in retail stores specific to customer preferences. For instance, PepsiCo utilized Bluetooth Low Energy beacons to send mobile vouchers to customers at just the right time to turn foot traffic into potential sales.

In recent years, a large number of innovative technologies have been developed and introduced in the retail space. IoT is one such revolutionary technology that has led to significant transformation in operations of the retail sector. Several retailers are investing in the technology to capitalize the potential of the industry. For instance, Amazon introduced Amazon Go, a smart grocery store that utilizes IoT technology to provide customers with experience of shopping with no checkout lines or cashiers.

IoT technology is slated to stay in the retail sector for a long time. However, data security with this technology may be at stake for retailers as well as customers. Rising number of cyber security attacks is raising concerns among retailers. The retail industry is prime target for hackers as retail environment provides them potential access to customer payment information by exploiting connected devices such as point of sale system. Therefore, before deploying IoT technology, retailers need to understand risk involved as well as measures to be taken to prevent this attack. High investment involved in data security related to IoT devices is projected hinder the growth of the market.

Application Insights

The visual marketing segment accounted for approximately 30.0% of the overall global revenue in 2017. There is a high demand for digital signage as an effective way to communicate with customers as well as to provide digital experience in brick-and-mortar stores. Digital signage is used in store display videos, ads, or messages, which need to be conveyed to customers for improving engagement. As a result, visual marketing is anticipated to dominate the market throughout the forecast period.

The others segment, which includes analytics & robotics, is likely to post the highest CAGR of 25.3% during the forecast period. Increasing adoption of analytical solutions by retailers to understand their customers, improve business operations, augment profitability, and have a competitive edge over their competitors in both physical and e-commerce retail is contributing to the growth of the segment.

Furthermore, potential use of robots for providing in-store customer service is estimated to boost the growth of the overall smart retail market. For instance, Pepper, developed by Softbank, is driven by Artificial Intelligence (AI) technology. It can chat and interact with customers, answer their questions, and give directions, which can help in improving in-store customer engagement and experience.

Solution Insights

On the basis of solution, the market has been bifurcated into hardware and software. The hardware segment dominated the market in 2017, accounting for over 68.0% of the overall market. Growing deployment of RFID, Bluetooth beacon, POS systems, and AR & VR devices to provide seamless in-store shopping experience to customers is supplementing the growth of the segment.

The software segment is estimated to expand at a noteworthy CAGR during the forecast period. Burgeoning adoption of analytics software by retailers to understand specific customer needs and behavior to improve customer engagement and shopping experience is one of the key factors stimulating the growth of the segment.

Regional Insights

The market in North America was valued at USD 3.93 billion in 2017. The region is expected to be the leading revenue contributor in the market throughout the forecast period. Strong presence of smart retail solution providers and heightened adoption of advanced ICT technology in the retail sector are poised to augur well for the growth of the regional market.

On the other hand, Asia Pacific is projected to emerge as the fastest growing region in the market during the same period. Increasing deployment of smart retail solutions such as shopping guide robots, reception robots, intelligent dressing mirrors, and big data analytics in countries such as China and Japan is anticipated to stoke the growth of the regional market. For instance, Alibaba Group, an e-commerce giant in China, introduced its new retail concept by opening Hema Supermarket, which is a fine integration of online and offline shopping. In Hema stores, similar to the cashier less stores, Amazon Go, shoppers use their Alipay phone application to make payment for food.

Smart Retail Market Share Insights

There is an intense competition in the market owing to presence of a significant number market players. Some of the prominent companies operating in the market are Intel Corporation; IBM; Samsung Electronics; Amazon; Google, Inc.; Microsoft Corporation; Softbank Robotics Holdings; Ingenico S.A.; Verifone Systems; NCR Corporation. Currently, players in the market are pursuing both inorganic and organic growth strategies to increase their market share.

For instance, NCR Corporation announced Horizon, a data-driven self-checkout consultancy and web-based analytics system for the retail sector. This consultancy analyzes data generated at self-checkout to provide actionable insights to retailers to improve store operation and checkout experience for customers.

Report Scope

Segments Covered in the Report

This report forecasts revenue growth at global, regional & country levels and provides an analysis of industry trends in each of the sub-segments from 2015 to 2025. For the purpose of this study, Grand View Research has segmented the global smart retail market report on the basis of solution, application, and region:

• Solution Outlook (Revenue, USD Million, 2015 - 2025)

  • Hardware

  • Software

• Application Outlook (Revenue, USD Million, 2015 - 2025)

  • Visual Marketing

    • Digital signage

  • Smart Label 

    • Smart beacon

    • Smart shelf

  • Smart Payment System

    • e - payment system

    • Mobile Payment application

    • POS system

  • Intelligent System 

    • Augment reality

    • Virtual reality

    • Smart carts

    • Interactive kiosk

    • Others

  • Others (Robotics, analytics)

• Regional Outlook (Revenue, USD Million, 2015 - 2025)

  • North America

    • U.S.

    • Canada

  • Europe

    • Germany

    • U.K.

  • Asia Pacific

    • China

    • India

    • Japan

  • Latin America

    • Brazil

    • Mexico

  • MEA