The predictive and prescriptive analytics market was valued at USD 10.01 million in 2020 and is expected to reach USD 29.97 million by 2026 and grow at a CAGR of 20.7% over the forecast period (2021 - 2026). The emergence of COVID-19 has decelerated the market growth; however, due to uplifting lockdowns, the market is slowly gaining traction. The report offers a deep topographical analysis for key regions and country markets. An increasing emphasis has been placed on the need for predictive analytics, with skills to manipulate data and develop custom algorithms in a quest to unlock hidden value. Prescriptive analytics has been moving beyond its core community of operations, research, and management science professionals and becoming increasingly embedded in business applications.
- Predictive analytics offers companies actionable insights based on data. It delivers estimates about the likelihood of a future outcome. Companies are using these statistics to get a forecast of future developments. Moreover, the foundation of predictive analytics is based on probabilities.
- Prescriptive analytics uses techniques and tools such as business rules, algorithms, machine learning (ML), and computational modeling procedures. This technique is applied against input from many different data sets, including historical and transactional data, real-time data feeds, and Big Data. The businesses and enterprises that are already using some sort of descriptive analytics tools and solutions are better positioned for predictive and /or prescriptive analytics solutions adoption. The presence of historical data to forecast from and run algorithms make them use these solutions more effectively.
- Advanced analytics solution offers a set of techniques that help deal with these challenges through statistical and technical methods, ultimately supporting strategic and fact-based decisions. Owing to this, analytics have become significant for Business Intelligence (BI) across various end-user industries.
- In recent years, the demand for BI has been on the rise, with enterprises and organizations yearning to enhance productivity and increase sales by adopting automated solutions. BI tools have witnessed a tremendous surge in their adoption across various industries around the world, with the global market for BI and advanced analytics estimated to reach approximately USD 25 billion by the end of 2020.
- Data privacy and security issues have been raised. Due to the details generated about the behavioral aspects, users feel vulnerable about the confidentiality of data getting generated.
Key Market Trends
Retail is Expected to Hold a Major Market Share
Owing to the rising demand for consumer goods and growth in e-commerce, the retail sector is witnessing significant growth in its sales. This has given rise to the data generated in the industry, with the implementation of big data solutions. Further, increasing competition in the industry has encouraged players to ensure efficient working across various stages in the delivery.
Following are the applications in the retail industry, which generate a significant amount of data and require advanced predictive and prescriptive analytics to excel.
- Customer Identification and Retention: With the help of analysis, it is possible to identify valued customers and retain them, as well as identify potential customers and attract them with valued offers. Customers are less likely to churn if they are similar to your primary target customers. If you have access to data about both your customers and a list of potential customers, this is an excellent opportunity to focus on only those who are less likely to churn. For instance, Walmart, the world's biggest retailer with over 20,000 stores in 28 countries, is in the process of building the world’ biggest private cloud, to process 2.5 petabytes of data every hour.
- Inventory Planning and Risk Mitigation: Predictive analytics leverages big data and empowers retailers to design their stock, renew administration, and promote methodologies, along with minimizing risk and uncertainty. It is not only essential to predict the pattern on a large scale, but also to look at the minute details. Product inventory and shelf space have always been a retailer's most valuable resources. Now analytics can be used to determine which products provide the highest level of sales and profits. It helps retailers to plan a variety of assortment mixes and create balanced merchandise planning strategies, with unique market-based, customer-based, fashion-based, and price-based assortments.
- Personalized Customer Service: With a tremendous amount of data, it is easy to start evaluating consumers on a more granular level. Rather than making an enormous campaign that costs thousands and has restricted effect, predictive analytics can customize the showcasing procedure.
- Accurate Insights in Real-time: Big data not only provides oversight, but it also gives insights about an individual. With predictive and prescriptive analytics, one can take a look at every person and assess their purchases continuously, to precisely foresee what they may purchase given their particular purchasing propensities.
North America is Expected to Hold Major Market Share
- The United States leads the North American market for predictive and prescriptive analytics, owing to early and heavy usage of advanced analytics across the majority of its industries. The retail sector in the country is flourishing rapidly. According to the NRF (National Retail Federation), for each company closing a store, 2.7 companies were opening stores. This places increased importance on in-store analytics.
- According to the National Academy of Medicine, the US healthcare system spends USD 750 billion on unnecessary services. Predictive analytics can reduce the wastage of money and save up to 15% of its budget by analyzing the likelihood of the particular patient being subjected to a specific disease.
- Royal Philip announced to collaborate with Humana Inc., a managed care company in the United States, to enhance the outcomes for select high-risk Medicare Advantage members. In this collaborative service, Humana is identifying members at risk with the help of Philips Lifeline medical alert service, including AutoAlert, which is supported by Philips CareSage predictive analytics. Early identification and referral of patients with chronic diseases at high-risk help in timely care and intervention.
- Canada is a global leader in cloud adoption, making it a high potential market for the emergence of a globally big data cloud services market among the early adopters. The Canadian analytics market also generates more than USD 1 billion per year itself, without counting indirect operational benefits.
- Zebra Technologies signed an agreement to acquire prescriptive analytics firm, Profitech. Profitech’s platform analyzes data across the value chain for customers in the retail and consumer packaged goods (CPG) industry. Zebra Technologies has planned to leverage Profitech’s platform to widen its relevance in retail operations with the acquisition.
The predictive and prescriptive analytics market is moderately competitive and consists of a few players. In terms of market share, few of the major players currently dominate the market. The manufacturers are focused on product differentiation to gain a competitive advantage. One way of achieving this is to focus on continuous innovation. For instance, Oracle’s Autonomous Data Science Cloud Service was recognized as a leader in notebook-based predictive analytics and machine learning by Forrester Research, earning the highest average current offering score, as well as the highest possible score for its solution roadmap.
- June 2021- Salesforce unit announced the release of Tableau 2021.2 with a variety of new capabilities designed to help people make smarter and faster decisions based on available data. According to Tableau, the Ask Data feature offers an intuitive and guided way to build the queries without complex obstacles. The system uses autocorrect and synonym recognition to help you shape the right type of questions.
- March 2021- Hewlett Packard Enterprise announced advancements to the HPE Ezmeral software portfolio, with new products and partnerships designed to help organizations unify access to data, from edge to cloud, to fuel their digital transformation initiatives. HPE Ezmeral portfolio provides customers with an end-to-end hybrid cloud analytics platform that improves quality, repeatability, throughput, and time to value for their AI/ML, analytics, and data-intensive workloads.
- The market estimate (ME) sheet in Excel format
- 3 months of analyst support
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1.2 Scope of the Study
4.2 Industry Attractiveness - Porter's Five Forces Analysis
4.2.1 Threat of New Entrants
4.2.2 Bargaining Power of Buyers
4.2.3 Bargaining Power of Suppliers
4.2.4 Threat of Substitutes
4.2.5 Intensity of Competitive Rivalry
4.3 Assessment of the Impact of COVID-19 on the Market
5.1.1 Growing Importance of Big Data with Large Volumes of Data Generated, both in Structured and Unstructured Form
5.1.2 Increasing Adoption of Business Analytics and Business Intelligence
5.2 Market Restraints
5.2.1 Data Privacy and Security Concerns
6.1.4 IT and Telecom
6.1.5 Industrial (Manufacturing, Automotive, and Energy and Mining)
6.1.6 Government and Defense
6.1.7 Other End-user Industries
6.2 By Geography
6.2.1 North America
6.2.3 Asia Pacific
6.2.4 Latin America
6.2.5 Middle East and Africa
7.2 SAP SE
7.3 IBM Corporation
7.4 Microsoft Corporation
7.5 SAS Institute Inc.
7.6 River Logic Inc.
7.7 Infor Inc.
7.8 Teradata Corporation
7.9 Altair Engineering Inc.
A selection of companies mentioned in this report includes:
- Oracle Corporation
- SAP SE
- IBM Corporation
- Microsoft Corporation
- SAS Institute Inc.
- River Logic Inc.
- Infor Inc.
- Teradata Corporation
- Altair Engineering Inc.