Retail Cloud Market Size, Share & Trends Analysis Report By Component (Customer Management), By Service Model Type (SaaS, IaaS, PaaS), By Deployment, By Organization Size, By Region, And Segment Forecasts, 2024 - 2030

Retail Cloud Market Size & Trends

The global retail cloud market size was estimated at USD 50.09 billion in 2023 and is projected to grow at a compound annual growth rate (CAGR) of 18.7% from 2024 to 2030. This expansion is primarily driven by the increasing adoption of cloud computing among retailers, as it offers cost-effective and efficient solutions for their operations. Moreover, there is a growing demand for scalability and flexibility in retail, which cloud technology can provide, allowing businesses to quickly adapt to changing market conditions. For instance, in May 2023, WHSmith North America (WHSNA) announced its adoption of cutting-edge retail cloud solutions from Oracle, including Oracle Retail Merchandise Financial Planning Cloud Service and Oracle Retail AI Foundation Cloud Service. This strategic move aims to enhance inventory planning and placement across WHSNA's stores in the U.S. and Canada. By embracing these advanced cloud services, WHSNA is actively pursuing its digital transformation strategy to leverage technology to elevate the customer experience and drive sales growth, further solidifying its position as a forward-looking and customer-centric business.

Cloud computing is revolutionizing the retail market in several ways. It enables retailers to effectively manage peak demand by providing scalability and elasticity to adjust resources. The technology facilitates predicting future demand through data analysis and optimizing inventory and staffing levels. Additionally, cloud-based self-service business intelligence empowers retailers to make informed decisions without IT support. Cloud computing also aids in financial management, tracking income, expenses, and preparing financial reports. Moreover, it enhances security, compliance, and disaster recovery, ultimately boosting efficiency, profitability, and customer satisfaction in the retail industry. Thus, retail industry cloud adoption is growing rapidly, driven by cost savings, flexibility, scalability, security, and innovation benefits, and is being utilized in customer relationship management, inventory and pricing management, marketing automation, and fraud detection.

The shopping landscape is undergoing rapid transformation, with a significant shift towards online shopping, accelerated even further by the pandemic. Thus, retailers must prioritize enhancing their online experiences to meet customer expectations. Speed is crucial in this endeavor, as today's consumers demand fast and seamless interactions when browsing websites and using apps for shopping. Meeting these expectations is essential for retailers to stay competitive and maintain customer satisfaction in the digital era. For instance, in Jan 2022, Akamai Technologies, a content delivery network service provider, stated that online retail sales increased by 32% in 2020 and even faster in 2021, and a 100-millisecond delay in site loading time can decrease conversion rates by 7%.

The market experienced significant growth during the pandemic due to several key factors. The shift to online operations compelled retailers to seek cloud-based solutions, driving demand for such services. Additionally, changing consumer behavior emphasized the need for seamless online shopping experiences, prompting retailers to invest in cloud technologies. Moreover, the pandemic accelerated the adoption of cloud computing, with businesses recognizing its cost efficiency and agility. Cloud-based solutions were favored in the retail sector for their scalability, flexibility, and security advantages.

Market Concentration & Characteristics

The market growth stage is high, and the pace of the market growth is accelerating. Retailers focus on improving customer experience and engagement, and cloud-based systems enable seamless interactions and personalized services. Moreover, the rising importance of data analytics in the retail sector is propelling the adoption of cloud platforms, empowering retailers to gain valuable insights and make data-driven decisions for enhanced performance.

The retail cloud market is also characterized by a high level of merger and acquisition (M&A) activity by the leading players. Large cloud service providers and technology companies often engage in M&A to strengthen their market position, expand their service offerings, and enhance their capabilities in delivering innovative cloud services.

The regulatory landscape exerts a profound impact on the market. Governments worldwide are increasingly implementing stringent regulations to safeguard consumer data privacy and ensure cybersecurity in retail operations. Compliance with these regulations has become paramount for retailers adopting cloud solutions.

As businesses seek efficient and flexible digital infrastructures, substitutes like edge computing, on-premises solutions, and hybrid cloud models present compelling alternatives to traditional Retail Cloud services. Edge computing, with its proximity to end-users, offers lower latency, while on-premises solutions provide enhanced control and security. Hybrid models seamlessly integrate on-site and cloud functionalities.

Component Insights

The solution segment led the market and accounted for 64.6% of the global revenue in 2023. The high share can be attributed to the rising demand for customer management, supply chain management, workforce management, and data security solutions. Customer management solutions enhance engagement, satisfaction, and retention through personalized experiences and data tracking. For improved efficiency, supply chain management solutions optimize inventory, orders, and supplier coordination. Workforce management solutions effectively track attendance, shifts, and benefits. Data security solutions safeguard against unauthorized access and threats through encryption and monitoring. As organizations become more complex, the demand for these solutions is expected to grow, becoming increasingly crucial for effective operations in the coming years.

The services segment is projected to grow significantly over the forecast period. This growth is driven by several factors, including the increasing complexity of retail operations, leading to a higher demand for professional services. Additionally, the growing adoption of cloud-based retail solutions has created opportunities for service providers as retailers seek to outsource their IT operations. Moreover, the rising demand for omnichannel retail necessitates integrated services combining cloud-based solutions and professional services to deliver a seamless shopping experience across multiple channels.

Service Model Type Insights

The SaaS segment accounted for the largest market revenue share of 62.7% in 2023. SaaS solutions provide cost-efficiency by offering subscription-based models, reducing hardware, software licenses, and IT infrastructure expenses. Retailers can easily scale their operations with SaaS, adding or removing features and users as needed without significant investments. The accessibility of SaaS allows retailers to access data and applications from anywhere globally, which is ideal for businesses with international reach. Moreover, the user-friendly nature of SaaS makes it simple for even technically limited retailers to adopt and benefit from these solutions quickly.

The IaaS segment is predicted to foresee significant growth in the forecast years. IaaS offers retailers the advantage of renting computing, storage, and networking resources on a flexible pay-as-you-go basis, eliminating the need for costly hardware investments. Retailers can swiftly deploy new applications and services with enhanced agility and flexibility. As the retail industry evolves, the rising demand for IaaS solutions is driven by its potential to reduce costs, enhance agility, and foster innovation.

Deployment Insights

The public cloud segment accounted for the largest market revenue share of 50.1% in 2023. This is attributed to the numerous advantages it offers retailers, including scalability, flexibility, and cost-effectiveness. Public clouds grant access to services such as data storage, computing power, and analytics, making them highly appealing to the retail industry. Key players such as Amazon Web Services, Inc, Microsoft, and Google Cloud Platform are prominent providers offering services that cater to various retail needs, ranging from data storage and analytics to e-commerce platforms, CRM, supply chain management, inventory management, and fraud detection. The public cloud's dominance is expected to continue as retailers seek to leverage its benefits to enhance their operations and stay competitive.

The hybrid cloud segment is expected to showcase significant growth over the forecast period. The growth is attributed to the rising adoption of cloud-based retail solutions such as supply chain management systems, e-commerce platforms, and customer relationship management (CRM) systems, which have gained popularity among retailers. The hybrid cloud approach allows them to deploy these solutions more efficiently and cost-effectively. By leveraging the hybrid cloud model, retailers can seamlessly integrate their existing infrastructure with cloud services, optimizing performance and scalability while maintaining data security and control.

Enterprise Size Insights

The large enterprises segment accounted for the largest market revenue share 50.1% in 2023. The high share can be attributed to their ample resources and infrastructure, enabling them to effectively adopt and utilize retail cloud solutions. Large enterprises benefit from the scalability and flexibility of cloud computing, enhancing customer experiences and streamlining operations. Key factors driving their adoption of retail cloud solutions include cost savings, improved security, and increased agility. Cloud computing allows them to save on IT infrastructure costs, access robust security measures, and swiftly deploy new applications and services. As the market continues to expand, more large enterprises are expected to embrace these solutions as the advantages of cloud computing become increasingly evident to businesses of all sizes.

The small & medium size enterprises segment will witness significant growth in the coming years. Cloud computing offers SMEs numerous advantages, such as rapid adaptability to changing business needs and potential cost savings. As SMEs recognize the benefits of cloud technology in reducing costs and enhancing operational efficiency, their uptake of retail cloud solutions is expected to surge in the coming years, further propelling their growth in the market. For instance, in April 2021, IBM Corporation, a technology-based company, stated that 75% of SMEs plan to implement cloud computing projects and improve IT infrastructure.

Regional Insights

North America dominated the market and accounted for a 39.6% share in 2023. The U.S. and Canada emerge as promising growth hubs in the region. The region's dominance can be attributed to the high penetration of cloud computing, the rising adoption of omnichannel retail practices, and the growing demand for data analytics and insights in the retail sector. Additionally, numerous leading retailers further bolster North America's market position. The U.S. and Canada stand out as key contributors to this growth due to their robust and mature retail industries and a strong emphasis on innovation and technology, which fuels the adoption of cloud computing solutions in the retail sector.

Asia Pacific is anticipated to witness significant growth in the market. This growth is driven by a growing demand for cloud-based services from small and medium-sized enterprises (SMEs) in Asia Pacific. Recognizing the advantages of cloud solutions, SMBs are fueling the market's expansion by embracing these technologies to enhance their operations and competitiveness. Countries like China, India, and Japan are experiencing robust economic growth and rapidly increasing internet penetration and smartphone adoption. This, in turn, drives the demand for efficient retail cloud solutions to support the thriving e-commerce industry. Additionally, the government's and businesses' significant investments in cloud infrastructure further fuel the demand for retail cloud solutions.

Key Companies & Market Share Insights

Some of the key players operating in the market include Accenture; Amazon Web Services, Inc.; and Google LLC

• Accenture is a global professional services company that provides a broad range of services in consulting, strategy, digital, technology, and operations. The company is actively involved in helping retail organizations leverage cloud technologies to enhance their customer experiences, operations, and overall efficiency.

• Amazon Web Services, Inc. (AWS) is a subsidiary of Amazon.com and is a foremost provider of cloud computing services. AWS emphasizes innovation, staying at the forefront of emerging technologies such as artificial intelligence and serverless computing.

• Mirakl SAS. and and Rithum Holdings, Inc. are some of the emerging market participants in the retail cloud market.

• Mirakl SAS provides a cloud-based platform that enables retailers to create and manage their online marketplaces. The platform facilitates the connection between retailers and third-party sellers, allowing for the expansion of product offerings without the need for retailers to maintain extensive inventory.

• Rithum Holdings, Inc. focuses on helping retailers and brands optimize their online operations by providing a comprehensive platform for managing product assortment, inventory, and order fulfillment.

Recent Developments

• In October 2023, Flipkart Internet Private Limited introduced 'Flipkart Commerce Cloud,' a platform delivering retail technology solutions tailored for international retailers, marketplaces, and e-commerce platforms. The primary objective is to assist global retailers in expanding their businesses by addressing diverse business challenges through the implementation of intelligent and AI-driven solutions.

• In January 2023, Ernst & Young Global Limited unveiled the EY Retail Intelligence solution, leveraging the capabilities of Microsoft Cloud and Cloud for Retail. The solution, showcased at the National Retail Federation's "Big Show" event, is designed to offer consumers a seamless and user-friendly shopping experience.

• In January 2023, Eccentric, a company specializing in digital auto retail experience platforms, introduced its latest innovation, the Virtual Retail Cloud for dealers, at the NADA 2023 exhibition in Dallas, Texas. This marks the North America debut of the product, which had been recently launched in Indonesia, Japan, South Africa, and Oman.

Retail Cloud Market Report Scope

Global Retail Cloud Market Report Segmentation

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the global retail cloud market report based on component, service model type, deployment, organization size, and region.

• Component Outlook (Revenue, USD Billion, 2017 - 2030)

  • Solution

    • Customer Management

    • Supply Chain Management

    • Workforce Management

    • Data Security

    • Others

  •  Services

    • Professional Services

    • Managed Services

• Service Model Type Outlook (Revenue, USD Billion, 2017 - 2030)

  • SaaS

  • PaaS

  • IaaS

• Deployment Outlook (Revenue, USD Billion, 2017 - 2030)

  • Public Cloud

  • Private Cloud

  • Hybrid Cloud

• Organization Size Outlook (Revenue, USD Billion, 2017 - 2030)

  • Large Enterprises

  • Small & Medium Size Enterprises

• Regional Outlook (Revenue, USD Billion, 2017 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

    • France

  • Asia Pacific

    • China

    • Japan

    • India

    • South Korea

    • Australia

  • Latin America

    • Brazil

    • Mexico

  • MEA

    • Kingdom of Saudi Arabia

    • UAE

    • South Africa