The craze of online shopping has culminated in major brands opening e-stores to capitalize on the trend. Retail sourcing and procurement is a major step in the business model of retail chains to assess consumer demand and purchase required stocks. Technologies such as big data and cloud have allowed these chains to digitize the process in order to provide customers with an enhanced experience. Implementation of these technologies can manage to satiate consumer demand.
Development of mobile applications has managed to bring the store into consumer pockets. Consumers’ search patterns and likes provide insights to retailers regarding their future shopping preferences. Automation of sourcing and procurement processes has brought down labor costs of stores.
Streamlining the Supply Chain
Cloud, on-premise, and hybrid are various deployment solutions of retail sourcing and procurement. The on-premise segment accounted for over 41% market revenue share in 2016. On-premise solutions are a perfect fit for small and medium enterprises (SMEs) to automate their purchasing process and save on laborious paperwork. However, the segment may lose its share to other segments owing to high investment costs.
The cloud segment is projected to grow at a CAGR of 12.1% over the forecast period (from 2018 to 2025) due to its capacity to skimp on production expenses. Retail solutions, which provide source-to-pay options using social media and automation, are expected to augur segment growth in the near future. Scalability and low rental costs make it a prime investment for retail players.
The hybrid segment has the highest potential for growth on account of automated software allowing retailers to set up shared service centers while dealing with third parties. This is exemplified by procurement solutions offered by the alliance of SAP and Deloitte.
Market Outlook
The global retail sourcing and procurement market valuation is anticipated to reach USD 2.74 billion by 2025, according to a report by Grand View Research, Inc. It is expected to expand at a CAGR of 11.5% from 2018 to 2025 due to increasing centralization of procurement processes. Growing integration of technologies such as big data, cloud, and Internet-of-Things (IoT) is projected to facilitate implementation of processes in the retail industry. Moreover, rise of online shopping along with changing buying patterns of consumers can bolster the market growth over the next few years. Prominent market players include IBM Corporation; JAGGAER, Inc.; SAP SE; and Oracle Corporation.
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