According to the Market Statsville Group (MSG), the global retail system integrator market size is expected to grow from USD 28.3 Billion in 2022 to USD 128.1 Billion by 2033, growing at a CAGR of 14.7% from 2023 to 2033. Increasing utilization and growing use of the internet of things (IoT) in industrial computerization, safety and security issues grow the need for automation systems, the need for low-cost, energy-effective production procedures, development in the cloud computing technology, system integrators help solution benefactors to enlarge around the globe, retail system integrators provide hustled products are expected to further cushion the growth of the retail system integrator market in the forecast period. Factors such as growing demand for privacy and data security and increasing SMEs across the emerging economies will pave the way for the market’s growth. However, the high investment required for the installation and operation of the system coupled with the dearth of professionals managing retail systems, will hamper the market’s growth. The integration of advancing technology will create immense opportunities for the market’s growth.
A retail systems integrator is a person or company that creates retail systems or computing systems for customers in the retail industry by mixing hardware, software, networking, and storage components from various suppliers. Retail system integrator services include the configuration, integration, implementation, and update of retail operational applications such as merchandising, supply chain management, shops, and unified commerce and fulfilment. Retail system integrators may also provide additional services like strategic consulting, IT, and business process outsourcing (BPO).
Retail System is a comprehensive and technologically integrated software application with advanced functionalities, which addresses any specialized, managerial, and mission-critical operational needs of (chains) of shops that sell goods & services, irrespective of their size and business sector. Major operating giants in the market include IBM, Accenture, Capgemini, Deloitte, and others, offering services of retail system integration.
COVID-19 has a significant impact on the overall market’s growth during the pandemic. As, the COVID-19 started rapidly increasing to restrain its growth the government of various economies-imposed lockdowns, trade restrictions, and others, which in turn led to the closure of the businesses till the end of the lockdown.
However, online retail propelled its growth during the pandemic, as the dearth of labor and workers pushed the offline retailers to adopt the online platform and to manage all the operations from bookings products by the customer to the delivery of the product retail system integrator plays a vital role. Thus, its adoption increased during the pandemic across the globe.
Further, the economies which have partial lockdown or no-lockdown, in such nations retail business seek this as an opportunity for reaching out to the mass customer and enhance their customer base, while witnessing ease in operations. Such factors contributed to the positive market growth amid the pandemic. Moreover, supply chain disruptions and halted manufacturing plants also forced retail businesses to adopt the platform as it offers a wide range of options to opt for in case of trade uncertainty coupled with the assistance in business management.
The retail system integrators manage the whole operations of the online retail stores and assist businesses to manage their inventory efficiently as per the market trend. Retail system integrators help businesses owner in coordinating, planning, scheduling, and in decision making. It also leverages the technology power and enhances the work efficiency and improved connections with the business’s partners and customers.
The increasing online retailing will fuel the market’s growth. As online retailers are required to manage their online presence, digital shelves coupled with deep rooted connections with suppliers, distributors, delivery partners. It also assists in establishing effective communication, operations management, and related factors. Such factors are driving the market’s growth.
The high initial investment is an important factor that restricts the growth of process automation in retail stores. High investments are required for the installation of supervisory solutions, along with devices such as process analyzers, smart sensors, and communication networks. Devices such as process analyzers, smart sensors, and actuators require high installation and maintenance costs, increasing the cost for customers. Although automation offers benefits in the long run, the high initial investments prevent companies from availing of complete automation. This restricts the market for retail system integrators.
The high cost also affects its adoption by the SMEs as they are the potential customers who require such solutions to manage their operations. The SMEs, in order to reduce their costs, offer remote employment and gain more customers, offer a wide range of offers and deliveries. To manage such things, data from online platforms of SMEs, and other factors can be effectively managed by the retail system integrators. However, the high cost of the retail system integrators retrains their adoption by the SMEs, affecting the market’s growth.
The integration of technology with retail system integrator will create immense opportunity for the market’s growth. The adoption of advancing technologies such as AI, ML, and IoT, among others, will assist service providers to develop and adopt different strategies to streamline business, improve profits margins, and deliver customized services to the customers.
The growing digitalization of retail stores is also expanding its area in emerging economies, and in order to manage retail operations through automation the retail system integrators have a huge role to play in this scenario. It offers timely data analysis, study customer behaviour, assist in managing stores regular operations, customer tracking, and others. Such factors will pave the way for the market’s growth. Further, the retail 4.0 and surging adoption of advancing technologies by retailer will augment the market’s growth. The integration of technologies will assist business owners to enhance their productivity and strategies to improve customer base and expansion of business.
The study categorizes the retail system integrator market based on type and application area at the regional and global levels.
Based on the type, the market is divided into cloud-based and on-premises. The cloud-based segment is expected to dominate the market share in 2022 in the global retail system integrator market. The cloud-based segment currently dominates the market share in the retail system integrator market. Increased investments and the expanding trend of the internet of things in the retail sector are driving market expansion. Cloud-based deployment has several advantages, including lower IT expenses, increased collaboration efficiency, scalability, and work freedom. Furthermore, cloud providers are offering strong native optimization capabilities to help organizations choose the most cost-effective architecture capable of delivering the required performance, which contributes considerably to the growth of the system integration sector.
Furthermore, numerous industry participants are purchasing minor cloud providers in order to increase cloud usage. For instance, in June 2020, IBM Corporation reached a formal deal to purchase Spanugo, a cloud cybersecurity posture management solutions provider located in the United States. IBM implemented Spanugo software into its public cloud to suit the security standards of its clients in highly regulated sectors.
Based on the regions, the global retail system integrator market has been segmented across Europe, North America, the Middle East & Africa, Asia-Pacific, and South America. North America is projected to account for the highest market share in 2022. Growing investments and favorable government assistance for the adoption of new retail solutions are driving market expansion in North America. Key suppliers involved in building retail system integrators, such as IBM, Retail Process Engineering (RPE), and Cognizant, are supporting industry expansion. The presence of major retail giants such as Amazon, Walmart, The Kroger Co, and Costco, among others, contributes to the region's demand for retail system integrators.
The retail system integrator market is a significant competitor, and extremely cutthroat in the sector are using strategies including product launches, partnerships, acquisitions, agreements, and growth to enhance their market positions. Most sector businesses focus on increasing their operations worldwide and cultivating long-lasting partnerships.
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