Retail Sourcing And Procurement Market Size, Share & Trends Analysis grow at a CAGR of 16.2% from 2025 to 2030
The global retail sourcing and procurement market size was valued at USD 5.82 billion in 2024 and is projected to grow at a CAGR of 16.2% from 2025 to 2030. Globally increasing adoption of the solutions by various retail businesses is anticipated to be the growth factor of the industry over the forecast period. Moreover, the emergence of the Internet of Things (IoT), cloud technology, and big data is the key factor in boosting the implementation of the solutions within businesses. Effective sourcing and procurement solutions help retailers identify cost-saving opportunities, such as bulk purchasing, supplier negotiations, and optimized inventory management.
The continued digital transformation in the retail sector has compelled retailers to demand solutions that automate manual processes, reduce errors, and enhance operational efficiency. Automation allows procurement teams to focus on strategic decision-making rather than routine tasks. The shift towards cloud technology in this industry has brought businesses flexibility, scalability, and cost savings. Cloud-based procurement solutions enable retailers to access data and tools from anywhere, improving collaboration and decision-making.
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The role of artificial intelligence (AI) and machine learning technologies is also expected to define market expansion in the coming years. By leveraging AI capabilities, retailers can enhance their decision-making processes, improve efficiency, and respond more effectively to market dynamics. AI can analyze large datasets to evaluate suppliers based on criteria such as price, quality, delivery performance, and compliance with sustainability standards, enabling more efficient supplier assessment
The retail inventory management issue can also be addressed using AI-enabled solutions, as it can analyze inventory data to determine optimal stock levels, reducing excess inventory and associated carrying costs while ensuring adequate supply to meet demand. Such competitive advantages have compelled retailers to avail themselves of sourcing and procurement solutions that integrate AI. In May 2024, GEP announced the launch of an AI-based orchestration solution that automates procurement processes to improve collaboration, decision-making, and outcomes for businesses. Similar initiatives by other companies are expected to increase market competition and present more options for customers to select from. The increasing demand for sustainability has led retailers to demand solutions that enable them to source and track sustainability metrics responsibly. Stricter regulations related to sustainability and ethical sourcing are prompting retailers to invest in solutions that help ensure compliance and transparency in their supply chains. This is another important aspect that is expected to shape market growth during the forecast period.
Solution Insights
Based on components, the market has been categorized into solutions and services. The strategic sourcing sub-segment of solutions accounted for the largest revenue share of 25.8% in 2024. The rising demand for sourcing and procurement solutions in the retail industry and the increasing pace of technological advancements due to the extensive use of AI and machine learning are anticipated to maintain substantial demand for this segment. Strategic sourcing helps consolidate the purchasing power of the retail industry to ensure the best attainable value in the marketplace. These solutions help organizations analyze their procurement requirements and optimize their purchasing strategies to improve efficiency, reduce costs, and enhance supplier relationships. Unlike traditional sourcing methods that focus on transactional relationships and short-term price reductions, strategic sourcing involves a deeper analysis of an organization’s needs, supplier capabilities, market conditions, and overall supply chain dynamics, driving the demand for this solution.
The contract management segment is anticipated to witness the fastest growth during the forecast period. Contract management in retail sourcing is a critical component that focuses on effectively managing contracts related to procuring goods and services in the retail industry. The unique challenges in the retail sector, such as fluctuating demand, supplier variability, and stringent compliance requirements, have necessitated the presence of effective solutions that can help retailers optimize their sourcing strategies and ensure that they achieve the best possible outcomes. Furthermore, contract management tools ensure streamlined processes and the establishment of clear guidelines that lead to faster contract approvals and execution.
In terms of service, the implementation segment accounted for a leading revenue share in 2024. The growing need for advanced solutions in the retail industry that can result in better cost management and improved supplier and risk management while also addressing regulatory requirements drives the implementation of retail sourcing and procurement tools. This service involves several vital steps that can ensure that the deployed systems can meet the evolving demands of an organization, such as needs assessment and goal setting, stakeholder engagement, integration with existing systems, and customization & configuration. Growing competition in the industry has compelled service providers to offer efficient implementation services at competitive pricing, driving market growth through this segment.
The training and support service segment is expected to grow fastest from 2025 to 2030. Training and support are critical components of successfully implementing and maintaining retail sourcing and procurement solutions. Effective training ensures that all users are well-equipped to utilize the tools and processes effectively, while robust support helps address challenges that may arise post-implementation. Furthermore, continued upgrades in technology and the integration of innovative features in these solutions have necessitated continued upskilling of the involved stakeholders, leading to the steadily growing contribution of this segment.
Consulting services are expected to grow rapidly in the coming years. Retail purchasing is quickly evolving in response to advancements and changes in technology, hiring, and personnel requirements, business practices, and consumer demands and concerns. Big data will become a larger part of procurement and will assist in simplifying procurement decisions, form processes, and select suitable procurement solutions. Moreover, artificial intelligence and big data together will revolutionize the overall efficiency and speed of sourcing and procurement processes.
