Retail Sourcing and Procurement Market Size - By Component (Solution {Strategic Sourcing, Supplier Management, Contract Management, Spend Analysis}, Service), By Deployment Model (On-premises, Cloud) By Organization Size & Forecast, 2024 – 2032

Retail Sourcing and Procurement Market Size

Retail Sourcing and Procurement Market size was valued at USD 4.1 billion in 2023 and is estimated to register a CAGR of over 10% between 2024 and 2032. The growth of the market is driven by factors such as digital transformation and globalization of supply chain. This leads to the increased demand for comprehensive sourcing and procurement solutions that can handle multi-country operations. Technologies such as AI, machine learning, and blockchain are being utilized to optimize sourcing and procurement operations.
 

Major players in the retail sourcing and procurement market are continuously innovating to provide more efficient and intelligent solutions. For instance, in February 2024, Coupa Software announced the launch of its new AI-powered procurement platform, which aims to enhance procurement efficiency through automation. This platform helps retailers reduce costs and improve decision-making processes.
 

Additionally, there is a growing emphasis on sustainability and ethical sourcing. Retailers are emphasizing on the importance of environmentally friendly supply chain, which is creating a demand for advanced procurement solutions capable of tracking and verifying compliance with sustainability standards. Leading companies in the procurement sector are leveraging artificial intelligence to enhance their offerings and provide more value to their clients.
 

For instance, in October 2023, SAP unveils new generative AI innovations that boost productivity and effectiveness in procurement. It will help procurement professionals build comprehensive and effective category strategies faster. Which will help in cost saving, increasing efficiency, and managing relationships efficiently.
 

The retail sourcing and procurement market faces numerous challenges such as supply chain disruption and supplier relationship management. These disruptions can stem from various sources, including natural disasters, geopolitical tensions, global health crises, and sudden changes in consumer demand. Additionally, there is a challenge of aligning supplier capabilities with rapidly changing consumer preferences and market trends. Failure to manage these relationships effectively can lead to quality issues, delivery delays, increased costs, and potential reputational damage, thus hindering market growth.
 

Retail Sourcing and Procurement Market Trends

The growing emphasis on supply chain resilience and risk management is reshaping the retail landscape. Retailers are increasingly diversifying their supply chains to address risks posed by geopolitical tensions and disruptions. They are adopting advanced risk assessment tools that enable them to identify vulnerabilities and proactively mitigate potential disruptions. This strategic approach not only strengthens supply chain stability but also ensures continuity of operations amid unforeseen challenges.
 

Furthermore, retail analytics is a key driver in the evolving landscape of the retail market, providing businesses with actionable insights to optimize their operations and enhance customer experiences. By harnessing advanced data analytics, retailers can gain a deeper understanding of consumer behavior, preferences, and purchasing patterns. This intelligence enables them to make informed decisions regarding inventory management, pricing strategies, and targeted marketing efforts. As competition intensifies and consumer expectations rise, the ability to leverage retail analytics for real-time decision-making and strategic planning becomes increasingly crucial.
 

Retail Sourcing and Procurement Market Analysis

Based on component, the market is divided into solution and service. In 2023, the solution segment was valued at over USD 2.5 billion. Retailers are constantly seeking ways to streamline their procurement processes, reduce costs, and improve operational efficiency. The integration of AI and machine learning into procurement solutions is enhancing the functionality and effectiveness of these tools. These technologies provide real-time insights, predictive analytics which are highly valued by retailers. Tech giants are incorporating AI and machine learning into their procurement solutions to stay competitive and meet evolving market demands.
 

For instance, in May 2024, Oracle introduced new AI-driven features in its procurement cloud solutions, aimed at enhancing procurement efficiency and decision-making. These features include predictive analytics and automated supplier performance management, helping retailers streamline their operations and reduce costs.
 

Based on organization size, the retail sourcing and procurement market is categorized into SMEs and large enterprises. The large enterprises segment is anticipated to register a CAGR of over 8.5% from 2024 to 2032. Large enterprises are subject to stringent regulatory requirements and need robust procurement solutions to ensure compliance. These solutions also help in managing risks associated with supplier performance, fraud, and geopolitical factors. They have extensive and complex supply chains that require scalable and sophisticated procurement solutions driving the demand for the same. They typically have larger budgets allocated for technology investments.
 

This allows them to adopt advanced procurement solutions that incorporate the latest technologies such as AI, machine learning to enhance their procurement processes. Large e-commerce players are also investing in advanced procurement technologies to manage their complex supply chains more effectively. For instance, in December 2023, Amazon expanded its procurement technology capabilities by integrating advanced data analytics tools to optimize supplier selection and inventory management. This integration helps Amazon manage its vast and complex supply chain more effectively.
 

North America dominated the global retail sourcing and procurement market with a major share of over 35% in 2023. The region hosts numerous large enterprises with complex supply chains that require advanced procurement solutions. Strict regulatory frameworks and standards necessitate the use of these high-tech procurement platforms to ensure compliance. This drives demand for technologies that can manage and track regulatory compliance efficiently.
 

Moreover, the stable economic environment in U.S., coupled with significant investments in technology and infrastructure, supports the growth of the retail sourcing and procurement market. The adoption of AI-driven procurement solutions is not limited to tech companies but is spreading across various industries, including manufacturing. For instance, in December 2023, Outdoor furniture manufacturer grosfillex leverages Infor AI and automation to boost revenues, sales productivity and increase customer satisfaction in the region. This highlights the adoption of procurement solutions in the region.
 

The market in Europe is undergoing significant transformation driven by evolving consumer preferences, technological advancements, and the need for sustainable practices. As retailers face increasing pressure to deliver personalized experiences while managing costs and supply chain complexities, the adoption of advanced procurement solutions is on the rise. As the market evolves, the continued emphasis on digital transformation along with AI and data analytics is like to drive market growth in region.
 

The Asia Pacific region's robust economic growth, coupled with the increasing adoption of technology and the region's role as a manufacturing powerhouse is propelling the growth of its retail sourcing and procurement industry. As the market expands, the development of more advanced procurement solutions is likely to emerge, with a growing emphasis on achieving a balance between cost-efficiency and sustainable, ethical sourcing practices.
 

Retail Sourcing and Procurement Market Share

SAP SE, Oracle Corporation, and Coupa Software Inc. hold a significant market share of over 13% in retail sourcing and procurement industry. These major players are leveraging artificial intelligence and machine learning to enhance their platforms, offering predictive analytics for demand forecasting and intelligent supplier selection. These firms are also investing heavily in cloud-based solutions, allowing for greater scalability and real-time data access. Companies such as Coupa Software and Jaggaer are emphasizing user experience and integration capabilities, developing intuitive interfaces and robust APIs to connect with other enterprise systems seamlessly.
 

Additionally, there is also a trend towards sustainability and ethical sourcing among top players. Companies such as GEP Smart and Ivalua are incorporating features that help retailers track and improve their environmental impact and ensure compliance with labor standards throughout the supply chain.
 

Retail Sourcing and Procurement Market Companies

Major players operating in the retail sourcing and procurement industry are:

• Coupa Software Inc.
• Epicor Software Corporation
• GEP Smart
• IBM Corporation
• Infor Inc.
• Ivalua Inc.
• Jaggaer (formerly SciQuest)
• Oracle Corporation
• SAP SE
• Zycus Inc.
   

Retail Sourcing and Procurement Industry News

• In May 2024, IBM and SAP announced to expand collaboration to help clients become next-generation enterprises with generative AI to help them leverage their procurement and spend analysis. This collaboration aims to enhance decision-making through advanced data analytics, empowering businesses to adapt quickly to changing market dynamics.
   
• In August 2024, Blue Yonder acquired one network enterprises to unlock an agile, interconnected supply chain ecosystem to cater the increasing demand. The combined capabilities will provide customers with increased visibility, collaboration, and responsiveness across their supply chain operations, helping them to navigate complexities, mitigate risks, and seize new opportunities in an increasingly interconnected global market.
   

The retail sourcing and procurement market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue ($Bn) from 2021 to 2032, for the following segments:

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Market, By Component

• Solution
  • Strategic sourcing
  • Supplier management
  • Contract management
  • Spend analysis
  • Others 
• Service
  • Implementation
  • Consulting
  • Support and maintenance

Market, By Deployment Model

• On-premises
• Cloud

Market, By Organization Size

• SMEs
• Large enterprises

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
  • Nordics
  • Rest of Europe
• Asia Pacific
  • China
  • India
  • Japan
  • Australia
  • South Korea
  • Southeast Asia
  • Rest of Asia Pacific 
• Latin America
  • Brazil
  • Mexico
  • Argentina
  • Rest of Latin America 
• MEA
  • UAE
  • Saudi Arabia
  • South Africa
  • Rest of MEA