Retail Sourcing and Procurement Market Analysis

Retail Sourcing and Procurement Market Dynamics

Drivers

Digitalization Drives Growth in the Retail Sourcing and Procurement Market

Increasing digitalization is expected to propel the growth of the retail sourcing and procurement market going forward. Digitalization is referred to as creating a digital representation of physical attributes. For instance, in November 2023, according to the European Central Bank, a Germany-based Central bank, in the second half of 2022, the total number of non-cash payments in the European region increased by 8.8% to 65.9 billion compared to the previous six months. Therefore, the increasing digitization is driving the global retail sourcing and procurement market growth.

Rise in Cloud-Based Platforms Propel Growth

The increasing use of cloud-based platforms in retail sourcing and procurement is expected to be a major driver of the market. Technology platforms now dominate the procurement industry. As a result, service providers have partnered with vendors of procurement technology, offering their knowledge and approaches in implementation and application management, as well as utilizing these external platforms in their offerings. Modern, cloud-based networks and platforms such as SAP Ariba, Tradeshift, SMART by GEP, and Coupa are gaining popularity in the market.

Restraints

Data Security and Compliance Risks

Retailers face increasing concerns over data security and regulatory compliance with the growing adoption of digital procurement solutions. Furthermore, retailers must comply with stringent regulations, such as the General Data Protection Regulation (GDPR) in Europe and other regional compliance laws, which require the strict data protection policies.

High Implementation Costs

Many retailers, especially small and medium-sized enterprises (SMEs), struggle with the initial investment and ongoing maintenance costs associated with cloud-based and AI-driven procurement systems. One of the key restraints in the retail sourcing and procurement market is the high cost of implementing advanced procurement solutions. Additionally, integrating these solutions with legacy enterprise resource planning (ERP) systems can be complex, requiring substantial IT infrastructure upgrades and skilled personnel, which further increases operational costs.

FAQs

Global Retail Sourcing and Procurement Market size was valued at USD 5.01 Billion in 2023 and is poised to grow from USD 5.82 Billion in 2024 to USD 19.35 Billion by 2032, growing at a CAGR of 16.2% in the forecast period (2025-2032).

The global retail sourcing and procurement industry is highly competitive, driven by the increasing need for cost optimization, supplier collaboration, and digital transformation in retail operations. Major players such as SAP SE, Oracle Corporation, IBM Corporation, GEP, and Jaggaer dominate the market with cloud-based procurement solutions, AI-driven analytics, and automated supplier management tools. These companies focus on enhancing the supply chain visibility, risk management, and sustainability compliance, catering to the evolving needs of global retailers. 'Epicor Software Corporation', 'GT Nexus, an Infor company', 'IBM Corporation', 'Ivalua Inc.', 'Jaggaer', 'JDA Software Group, Inc.', 'Oracle Corporation', 'Proactis Holdings Plc', 'SAP SE', 'Zycus Inc.', 'Oracle', 'Zycus', 'Tradogram', 'GEP'

Increasing digitalization is expected to propel the growth of the retail sourcing and procurement market going forward. Digitalization is referred to as creating a digital representation of physical attributes. For instance, in November 2023, according to the European Central Bank, a Germany-based Central bank, in the second half of 2022, the total number of non-cash payments in the European region increased by 8.8% to 65.9 billion compared to the previous six months. Therefore, the increasing digitization is driving the global retail sourcing and procurement market growth.

Artificial Intelligence-Driven Innovations Enhance Operational Efficiency in Retail Sourcing and Procurement: Payment automation refers to the use of technology to streamline and automate the process of making and receiving payments. Major companies operating in the retail sourcing and procurement market are focusing on developing innovation, such as the payments automation for the extraction of invoice data from scanned documents.

North America led the market with 35.1% of the global revenue share in 2024. The demand for retail sourcing and procurement solutions in this region has been influenced by various factors, including the rapidly evolving retail landscape, supply chain complexities, technological advancements, and changing consumer behaviors. Retailers in economies such as the U.S. and Canada are continuously seeking ways to streamline procurement processes and reduce operational costs, driving substantial demand for solutions that automate sourcing, procurement, and supplier management.