A global outlook
According to Marketwatch, by 2031, the size of the global market for digital transformation in retail is estimated to surpass $1 billion USD, growing at an unexpected CAGR from 2023 to 2031.
Wealthandfinance highlights the main driver of eCommerce market development is the digital revolution of retail, which improves the consumer experience. Global retail sales in 2022 were $27.34 trillion, with online retail sales accounting for $5.76 trillion of the total.
Analyzing specifically retail digital transformation, Mordorintelligence also founds these key main insights:
- The digital transformation market in retail is anticipated to increase at a CAGR of 19.30% by 2028
- The retail sector has expanded dramatically in industrialized nations including China, the US, the UK, Japan, and Germany.
- The rise of the beauty and personal care segment is facilitated by the ongoing buying habits of people between the ages of 18 and 50.
- SAP SE, IBM, Alphabet Inc., Oracle Corporation, and Alibaba Group Holding Ltd. are a few of the prominent companies active in the field.
Asia at the forefront
According to Globenewswire’s recent report, with a rapidly rising market for digital technology and services, APAC is the area with the quickest rate of growth for digital transformation. Major regional growth markets in China and India are driving demand for digital products and services.
Numerous opportunities are now available to its population, particularly the younger generations, thanks to South and Southeast Asia’s digital development. In several digitization-related fields, many Asian nations are even leading the world. According to the World Economic Forum, with annual growth rates of 25% and 23%, the Philippines and Malaysia were the top two nations for eCommerce retail growth in 2022. This digital explosion is altering practically every element of business and social life in this area, from online retail to ride-sharing services to exporting online labor.
Forecasting the future of retail in the Asia Pacific, Bain&Company clusters APAC countries into four categories, each with its own trajectory. Among all the countries, India, Vietnam, and Indonesia are highlighted as fast modernizers. Despite their modest levels of disruption and maturity now, they are ready for a disproportionate digital acceleration.
Fear of a skills gap in the workforce
According to Technavio’s report, the shortage of trained labor is a major obstacle to the retail sector’s adoption of digital transformation. Employing IT professionals is challenging since leading technology organizations are increasingly competing with one another for the finest personnel. During the forecast period, it is anticipated that the growing skill gap would impede the expansion of the worldwide market for digital transformation in the retail sector.
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Digital transformation in action
Around the world, many retailers are catching up with the trend. Using new customer insights and data technologies, retailers are rethinking their decision-making processes and fostering a culture of innovation. By enhancing organizations’ interactions with consumers, this adaption increases the value of their company.
IKEA has utilized augmented reality (AR) technology, allowing customers to view the furniture virtually in their own living space via an app. They only need to hover their smartphone over their preferred location for the furniture to be placed there. Additionally, this has assisted in lowering the rate of product returns.
Nike has developed a smartphone app that uses a leg scan to recommend the ideal kind of shoe. Based on 13 data points, the program scans the feet and builds a map of them. Additionally, the firm receives crucial data from the program that will help it develop future footwear initiatives that will be even better.
Amazon has completely changed the way people purchase online, but the company now wants to enter the real retail market with its Go locations. The payment and checkout processes are automated using a mix of sensor fusion, deep learning, and computer vision. Customers may enter the shop, choose their things, and leave without having to wait in line or complete a transaction because payment is handled automatically by the Amazon Go app.
Digital transformation has emerged as a pivotal force reshaping the retail industry’s landscape. With the rapid advancement of technology and changing consumer behaviors, retailers have realized the urgent need to embrace digital strategies to stay competitive and relevant. By embracing the digital revolution and leveraging technology’s full potential, retailers can pave the way for a vibrant, customer-centric, and thriving future in the retail industry.
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