Retail Sourcing and Procurement Market Analysis

Retail Sourcing and Procurement Market Analysis

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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 SME 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.