The customer analytics market was valued at USD 3.74 billion in 2019 and is expected to reach USD 10.2 billion by 2025, at a CAGR of 18.2% over the forecast period 2020 - 2025. Cloud will continue its reign with more and more companies moving towards it as a result of the proliferation of cloud-based tools available on the market. Moreover, firms will learn how to embrace the power of cloud analytics, where most of the elements like customer data sources, data models, processing applications, computing power, analytic models and data storage will be located in the cloud, which will help in integrating intelligence into existing workflows and improves decision-making across operations.
- Due to the rising demand for improved customer satisfaction, the market is growing faster. Customer analytics is highly used in the retail industry in the development of personalized communications, offers, and marketing programs. This will help to enhance customer experience and loyalty, by knowing precisely which buyers are buying which products, and personalizing marketing based on shopper data. According to Accenture, delivering a good shopping experience enhanced customer satisfaction, repeat purchases, customer loyalty, customer referrals, revenues, and customer engagement.
- Growth in social media concern is a key driver for the market. Social media analytics combines monitoring, measurement, and analysis tools to uncover user sentiments and businesses engage with customers through social media platforms by associating their product list with e-commerce sites helps in monitoring people and fostering relationships. Prominent retailers, such as Amazon and Walmart, have successfully managed to harness the benefits offered by different social media platforms, such as Facebook and Twitter.
- However, data security and privacy concern is a major restraint to the market. Big data architecture in customer analytics will both become more critical to secure, and more frequently attacked, which can be threat to the loss of information.
Scope of the Report
Customer analytics market is gaining momentum, as many organizations are seeking to improve their business growth, by shifting from on-premise to cloud-based services. Insurance companies, banks, and pension funds are making use of customer analytics in order to understand customer lifetime value, increasing cross-sales, etc. Verticals such as e-commerce and retail, focus significantly on customer buying behavior, while telecommunications focuses on reducing the churn probability.
Key Market Trends
Growing Retail Sector to drive the Market Growth
- In today’s retail market, consumers not only appreciate, but also expect, a personalized omnichannel experience. This is the reason many retailers are leveraging technologies, such as customer analytics, to gain a more in-depth understanding of a consumer’s wants and needs.
- As the growth of the retail sale is increasing, customer analytics is highly used in the retail industry in the development of personalized communications, offers, and marketing programs. It also help to enhance customer experience and loyalty, by knowing precisely which buyers are buying which products, and personalizing marketing based on shopper data.
- Predictive analytics is trending in the business intelligence solutions market, helping enterprises to draw accurate predictions about the future consumer buying preferences. Various models used in the predictive analysis are primarily designed to serve existing customers better, prevent attrition, and build stronger relationships.
- When retailers can monitor customer traffic, including flows, timing, and even the stops they make, they can draw extremely valuable conclusions. Motionlogic, a T-Systems solution, captures and analyzes movements, helping bricks-and-mortar retail to better understand the routes people take, and why. These traffic patterns can be correlated with specific triggers to identify particularly attractive positions and destinations, which will help the retailers to know the real time data of the customer.
North America Accounts for Major Share
- North America is expected to have the highest market share as the region has a strong foothold of customer analytics solution providers. There is a change in enterprises perception of data usage, collection, and analysis, as there is an increase in demand for big data projects to improve the customer experience in this region.
- In addition to this, companies in the United States are likely to maintain or increase their marketing budgets, which is expected to result in a moderate growth rate for the overall region compared to others. Further, the increasing investments on AI and machine learning in the United States are proving integral to the customer analytics products of future.
- In the United States, US Bank deployed an analytics solution that integrates data from online and offline channels to provide a unified view of the customer. By supplying the call center with more relevant leads and providing recommendations, the bank improved its lead conversion rate by more than 100% and delivered better and personalized experiences.
The customer analytics market is highly fragmented with strong competition among the well-established and new emerging players. These players aim to gain an edge over the other players through innovative product development by investing high in R&D along with player acquisitions. Key players in the market are Adobe Systems Inc., IBM Corporation, Oracle Corporation, etc. Recent developments in the market are -
- Feb 2019 - IBM announced that BUCKiTDREAM, a new loyalty rewards commerce platform that better connects consumers with brands, is using Watson Marketing to offer enhanced personalized brand engagement experiences. BUCKiTDREAM's vision is to utilize future intention data analysis to redefine the consumer loyalty rewards industry, which struggles with low engagement rates, inactive accounts, and high liabilities from unredeemed loyalty points.
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