Category Management Software Market Size - By Component (Solution, Service), Deployment Model (On-premises, Cloud-based), Organization Size (SMEs, Large Enterprises), Application (Retail, Consumer Goods, Food & Beverage, Healthcare) & Forecast, 2023 – 2032

Category Management Software Market Size

Category Management Software Market size was valued at USD 1.7 billion in 2022 and is predicted to register at a CAGR of over 10.5% between 2023 and 2032, due to the growing demand for omnichannel retailing. Omnichannel retail requires seamless management of diverse product categories across online and offline channels. Category management software enables retailers to organize, analyze, and optimize their product assortments to deliver consistent and personalized experiences to customers across all touchpoints. As retailers embrace omnichannel strategies to meet evolving consumer expectations, the need for robust category management solutions has surged, thereby driving market growth.
 

The rising number of retail stores in the U.S. is accelerating the category management software market size. With the expansion of retail outlets, the complexity of managing product categories, inventory, and sales data has increased significantly. Category management software offers retailers advanced tools to efficiently organize and optimize their product offerings, enhancing inventory management and customer experiences. In addition, the adoption of inventory management software is a driving force in the market.
 

Businesses increasingly recognize the pivotal role inventory management plays in category optimization. By seamlessly integrating inventory management with category management, businesses can make data-driven decisions to ensure products are readily available to meet customer demand while minimizing carrying costs and improving overall category performance.
 

The high cost of implementation poses significant challenges in the category management software market. Businesses, particularly Small & Medium-sized Enterprises (SMEs), may find the upfront expenses associated with acquiring and deploying category management software prohibitive. These costs include software licenses, hardware infrastructure, training, and customization. To address this challenge, vendors and service providers can consider offering more flexible pricing models, cloud-based solutions, and cost-effective packages customized for the budget constraints of SMEs, making category management software more accessible and affordable.
 

COVID-19 Impact

The COVID-19 pandemic positively impacted the category management software market as businesses sought digital solutions to adapt to remote work and changing consumer demands. With supply chain disruptions, companies needed better inventory management tools. Additionally, the surge in e-commerce and the need for data-driven decision-making during the pandemic boosted the adoption of category management software. As a result, the market witnessed increased demand and accelerated digital transformation initiatives, benefiting from the changing business landscape imposed by the pandemic.
 

Category Management Software Market Trends

AI and ML integration is an emerging trend in the category management software industry, revolutionizing how businesses optimize their product categories. These technologies empower the software to analyze vast datasets, predict consumer preferences, and recommend personalized product assortments and pricing strategies. With AI and ML, businesses can make data-driven decisions, optimize inventory, and enhance the customer experience. This trend reflects the industry's shift toward more sophisticated and efficient category management solutions that adapt to changing market dynamics and customer behavior.
 

Cloud-based solutions are emerging as a prominent trend in the category management software market. They offer businesses greater flexibility, scalability, and cost-effectiveness compared to traditional on-premises systems. Cloud-based category management software enables real-time access to data, facilitating collaboration among teams regardless of location. It also reduces the burden of infrastructure maintenance and updates. As organizations seek agility and efficiency, the adoption of cloud-based solutions is on the rise in the market.
 

Category Management Software Market Analysis

The category management software market size from solution segment is expected to grow at a CAGR of over 9.5% through 2032. Solution segment is further bifurcated into assortment planning, pricing & promotion, inventory management, analytics & reporting, and supplier collaboration. This segment is experiencing growth by offering a comprehensive suite of tools designed for specific needs. For instance, in May 2023, Vanta launched a first-category unique vendor risk management solution, consolidating risk assessment, security reviews, and issue resolution on one platform. It also features AI-driven questionnaire automation for efficiency.
 

This development can enhance the security and risk management aspects of category management software, contributing to market demand. Assortment planning optimizes product offerings, pricing & promotion tools boost profitability, inventory management ensures efficient stock levels, analytics & reporting provide insights. This holistic approach empowers businesses to streamline their category management efforts, resulting in improved sales, customer satisfaction, and operational efficiency.
 

The category management software market from cloud segment dominated around USD 1.1 billion revenue in 2022. Cloud solutions provide real-time data access, scalability, and reduced infrastructure maintenance. Businesses can efficiently manage product categories, track sales, and collaborate seamlessly from anywhere. Cloud-based category management software fulfills companies’ requirement for flexible & remote-friendly solutions, driving its adoption. It aligns with the trend of digital transformation, making it an essential choice for businesses looking to enhance category management capabilities while staying competitive.
 

North America category management software market accounted for 32% of the revenue share in 2022, due to the increasing number of retail stores in the region. For instance, in August 2023, Juxta, a collaboration between Gilbarco Veeder Root and Vontier Corp., introduced Nomad, a self-contained, portable micro-retail store. Nomad allows retailers to extend their brand presence beyond conventional convenience store locations, offering greater flexibility in reaching customers.
 

The expansion of retail outlets necessitates more advanced category management tools to efficiently organize product assortments and optimize sales. Additionally, North America has a highly competitive retail landscape, prompting businesses to adopt innovative category management solutions to stay ahead. This trend, coupled with a strong emphasis on data-driven decision-making, is augmenting market growth in the region.
 

Category Management Software Market Share

The major companies operating in the category management software market are

• IBM Corporation
• Oracle Corporation
• SAP SE
• Mi9 Retail
• Softvision (Cognizant)

These companies are focused on strategic partnerships, new product launches, and commercialization efforts for market expansion. They are also heavily investing in research ideas to introduce innovative products and garner the maximum market revenue.
 

Category Management Software Industry News

• In June 2023, Unicommerce, an e-commerce enablement Software-as-a-Service (SaaS) platform, launched an advanced inventory management solution, allowing for the automated rerouting of unfulfilled orders based on real-time inventory availability across various stores and warehouses. This enhancement enables more efficient order allocation and fulfillment processes, enhancing the overall inventory management capabilities of businesses using Unicommerce's platform.
   

The category management software market research report includes in-depth coverage of the industry, with estimates & forecast in terms of revenue (USD million) from 2018 to 2032, for the following segments:

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Market, By Component

• Solution
  • Assortment planning
  • Pricing & promotion
  • Inventory management
  • Analytics & reporting
  • Supplier collaboration
• Service
  • Managed service
  • Professional service

Market, By Deployment

• On-premises
• Cloud-based

Market, By Organization Size

• SMEs
• Large enterprises

Market, By Application

• Retail
• Consumer goods
• Food & beverage
• Healthcare
• Others

The above information has been provided for the following regions and countries:

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