Category management software Market– Global Industry Size, Share, Trends, Opportunity, and Forecast, 2018-2028 Segmented By Solution (Planogram Software, Floor Planning Software), By Service (Managed Services, Professional Services), By Deployment (On-premises, Cloud-based), By Enterprise Size (Large Enterprises, Small & Medium Enterprises), By Application (Retail, Distribution), By Region, and By Competition

Market Overview

Global Category management software Market was valued at USD 1.7 Billion in 2022 and growing at a rate of 12.4% during the forecast period. The global category management software market has experienced substantial growth in recent years, driven by the evolving landscape of procurement and supply chain management. This software plays a pivotal role in helping businesses streamline their purchasing processes, optimize supplier relationships, and enhance cost efficiency. As organizations strive for greater operational agility and cost control, the demand for category management software has surged. One of the key factors fueling this growth is the increasing complexity of supply chains on a global scale. As businesses expand their reach and source materials and products from diverse geographies, the need for robust software solutions to manage these intricate networks has become paramount. Category management software offers tools for data analytics, supplier performance tracking, and strategic sourcing, empowering organizations to make informed decisions and drive competitive advantages. Furthermore, the COVID-19 pandemic underscored the importance of digital transformation in procurement and supply chain management. Many businesses accelerated their adoption of category management software to mitigate disruptions and adapt to rapidly changing market conditions. As a result, the global category management software market is expected to continue its upward trajectory, offering opportunities for vendors to innovate and meet the evolving needs of businesses worldwide.

Key Market Drivers

Increasing Demand for Streamlined Category Management Processes

The global category management software market is experiencing significant growth due to the increasing demand for streamlined category management processes. Category management involves the strategic management of product categories to optimize sales, improve customer satisfaction, and drive profitability. Traditionally, category management has been a manual and time-consuming process, requiring extensive data analysis and collaboration between various stakeholders. However, with the advent of category management software, organizations can automate and streamline these processes, leading to improved efficiency and effectiveness. Category management software offers features such as data analytics, market insights, assortment planning, and promotional optimization, enabling organizations to make data-driven decisions and effectively manage their product categories. By leveraging category management software, businesses can gain a competitive edge by identifying market trends, optimizing product assortments, and tailoring promotions to meet customer demands. As a result, the demand for category management software is rapidly increasing, driving the growth of the global market.

Growing Emphasis on Data-driven Decision Making

The growing emphasis on data-driven decision making is another key driver fueling the expansion of the global category management software market. In today's digital age, organizations have access to vast amounts of data from various sources, including sales data, customer data, market data, and social media data. However, making sense of this data and extracting actionable insights can be a complex and time-consuming task. Category management software addresses this challenge by providing advanced analytics capabilities that enable organizations to analyze large volumes of data and derive meaningful insights. By leveraging data-driven insights, businesses can make informed decisions regarding product assortment, pricing, promotions, and inventory management. This data-driven approach allows organizations to optimize their category strategies, improve customer satisfaction, and drive revenue growth. As organizations increasingly recognize the value of data-driven decision making, the demand for category management software is expected to surge, contributing to the growth of the global market.

Rising Need for Collaboration and Communication

The rising need for collaboration and communication is driving the adoption of category management software globally. Category management involves cross-functional collaboration between various departments, including sales, marketing, finance, and supply chain. Effective collaboration and communication are essential for aligning category strategies, sharing insights, and coordinating activities across different teams. However, traditional methods of collaboration, such as email and spreadsheets, can be inefficient and prone to errors. Category management software addresses this challenge by providing a centralized platform for collaboration and communication. With category management software, teams can collaborate in real-time, share information, and track progress on category initiatives. This improves communication, enhances transparency, and ensures that all stakeholders are aligned towards common goals. Additionally, category management software enables organizations to collaborate with external partners, such as suppliers and retailers, facilitating joint business planning and improving overall category performance. As the importance of collaboration and communication in category management continues to grow, the demand for category management software is expected to rise, driving the growth of the global market.

Integration with Existing Systems and Processes

Integration with existing systems and processes is a crucial factor driving the global category management software market. Organizations often have multiple systems and processes in place to manage various aspects of their business, including enterprise resource planning (ERP), customer relationship management (CRM), and supply chain management (SCM) systems. To maximize efficiency and minimize disruption, it is essential for category management software to seamlessly integrate with these existing systems. Integration allows organizations to leverage their existing data and workflows, eliminating the need for duplicate data entry and manual synchronization. By integrating category management software with existing systems, organizations can achieve a holistic view of their business, enabling better decision making and improved operational efficiency. Furthermore, integration enables organizations to leverage the capabilities of category management software across different departments and functions, ensuring consistency and alignment in category strategies. As organizations seek to optimize their existing systems and processes, the demand for category management software that offers seamless integration is expected to drive the growth of the global market.

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Key Market Challenges

Evolving Procurement Landscape

The Global Category Management Software Market faces the challenge of adapting to the ever-evolving landscape of procurement. As businesses seek greater efficiency and effectiveness in their procurement processes, category management software must keep pace with changing requirements. This includes accommodating new procurement strategies, supplier management techniques, and compliance standards. To address this challenge, software providers must invest in research and development to offer innovative solutions that meet the evolving needs of organizations and help them navigate the complex terrain of modern procurement.

Data Security and Compliance

Data security and compliance are paramount concerns in the Global Category Management Software Market, especially as businesses increasingly rely on digital platforms to manage their procurement operations. Ensuring the protection of sensitive procurement data and complying with industry-specific regulations and global data privacy laws are critical challenges. Software providers must demonstrate robust data encryption, access controls, and compliance features to gain the trust of organizations operating in heavily regulated sectors such as healthcare, finance, and government. Failure to address these concerns can result in legal repercussions and reputational damage.

Integration Complexity

Integrating category management software into an organization's existing IT infrastructure can be a complex and time-consuming task. Many businesses operate diverse IT ecosystems with various procurement tools and platforms in place. Category management software providers must offer solutions that seamlessly integrate with these existing systems while minimizing disruptions to procurement workflows. Achieving compatibility with popular procurement platforms like SAP Ariba, Oracle Procurement Cloud, and Coupa requires extensive testing, documentation, and support to ensure successful integration.

User Adoption and Training

Despite the potential benefits of category management software, user adoption remains a challenge. Employees may resist new tools and processes, leading to underutilization and inefficiencies. Addressing this challenge requires a comprehensive approach that includes user training and change management programs. Category management software providers should collaborate with organizations to educate users about the software's benefits, provide training on its functionalities, and offer ongoing support to ensure that employees embrace and effectively utilize the platform.

Scalability and Performance

The increasing volume and complexity of procurement data pose scalability and performance challenges for category management software providers. Organizations rely on efficient and high-performing software to manage large datasets and support strategic decision-making. To meet these demands, software providers must invest in scalable infrastructure, advanced algorithms, and optimized architectures. Continuous monitoring and optimization are essential to maintain optimal software performance, especially as organizations of all sizes seek to harness the power of data-driven procurement strategies and analytics.

Key Market Trends

Category Management Software Evolution

The Global Category Management Software Market is undergoing a significant transformation driven by several key trends that are reshaping the industry landscape. One of the prominent trends is the continuous evolution and advancement of category management software. As organizations seek to optimize their procurement and supply chain processes, category management software is adapting to offer more sophisticated features and capabilities. These evolving solutions enable organizations to gain deeper insights into their spending patterns, enhance supplier relationships, and make data-driven decisions to achieve cost savings and operational efficiency. The market is witnessing a shift towards more user-friendly interfaces, intuitive analytics, and AI-powered insights, empowering organizations to navigate the complexities of category management with greater agility and precision.

Data Analytics and Predictive Insights

Another key trend influencing the Global Category Management Software Market is the increasing reliance on data analytics and predictive insights. Businesses are recognizing the value of harnessing data to make informed procurement decisions. Category management software providers are integrating advanced analytics and predictive modeling capabilities into their solutions. This empowers organizations to analyze historical procurement data, identify trends, forecast demand, and optimize supplier relationships. By leveraging these data-driven insights, businesses can proactively address supply chain risks, negotiate favorable contracts, and enhance their overall procurement strategies. The trend towards data-driven decision-making is expected to continue driving the adoption of category management software.

Sustainability and Responsible Procurement

Sustainability and responsible procurement practices are gaining prominence in the Global Category Management Software Market. Organizations are increasingly focusing on environmental, social, and governance (ESG) factors when making procurement decisions. Category management software is adapting to accommodate these considerations, providing tools for tracking and reporting on sustainability metrics, supplier diversity, and ethical sourcing practices. This trend aligns with the growing emphasis on corporate social responsibility (CSR) and sustainability goals. Category management software that supports these initiatives is becoming a critical asset for organizations looking to align their procurement strategies with broader sustainability objectives.

Integration with Supply Chain Management

Integration with supply chain management systems is another significant trend in the Global Category Management Software Market. As supply chains become more complex and interconnected, the need for seamless integration between category management and supply chain processes has intensified. Category management software providers are offering solutions that seamlessly integrate with supply chain management platforms, enabling end-to-end visibility and collaboration. This integration allows organizations to optimize procurement decisions in alignment with supply chain goals, enhance inventory management, and respond effectively to supply disruptions. The demand for integrated category management software that supports holistic supply chain optimization is expected to grow as organizations seek greater operational efficiency and resilience.

Segmental Insights

Solution Insights

In 2022, within the Global Category Management Software Market, the "Planogram Software" segment emerged as the dominant force and is poised to maintain its leadership during the forecast period. Planogram software solutions have witnessed substantial adoption across various industries, including retail, consumer goods, and merchandising. These solutions empower organizations to optimize product placement on shelves and displays, enhancing in-store customer experiences and driving sales. With the increasing importance of visual merchandising and space optimization, planogram software has become an indispensable tool for retailers and manufacturers. The dominance of planogram software can be attributed to several factors. Firstly, it addresses the critical need for effective shelf and aisle management in physical stores, helping retailers make data-driven decisions about product assortment and placement. Secondly, advancements in planogram software have introduced features such as 3D visualization, planogram automation, and AI-driven recommendations, which further enhance its appeal. Thirdly, the growth of e-commerce has not diminished the relevance of planogram software; instead, it has extended its reach to online merchandising, where the visual presentation of products remains crucial. Looking ahead, the Planogram Software segment is expected to maintain its dominance due to ongoing innovations, increasing demand for data-driven merchandising strategies, and the continuous expansion of retail and consumer goods industries worldwide. The need for efficient space utilization and visual merchandising will remain a driving force, solidifying planogram software's position as a pivotal component of category management in both physical and digital retail environments. As retailers and brands strive to optimize customer experiences and boost sales, planogram software will continue to play a central role in shaping category management strategies.

Service Insights

In 2022, the "Professional Services" segment took center stage in the Global Category Management Software Market, establishing its dominance, and it is anticipated to maintain this leadership position throughout the forecast period. Professional services within the category management software market encompass a wide range of offerings, including consulting, implementation, training, and support services. These services are instrumental in helping organizations effectively deploy, customize, and maximize the value of their category management software solutions. Several key factors contributed to the dominance of the Professional Services segment in 2022. Firstly, the complexity of category management software often necessitates expert guidance in the form of consultants who can tailor the software to an organization's specific needs. Secondly, the implementation phase is crucial for ensuring a smooth transition to the new software, and professional services providers offer invaluable assistance in this regard. Thirdly, ongoing training and support services help organizations unlock the full potential of their category management software, ensuring that users are proficient in its use and that any issues are promptly addressed. The dominance of Professional Services is expected to persist due to the growing recognition among organizations of the importance of comprehensive support throughout their software adoption journey. As the category management software landscape continues to evolve, businesses will rely on professional services providers to navigate the intricacies of customization, integration, and optimization. Moreover, as more industries and sectors recognize the benefits of category management, the demand for expert guidance and support in maximizing the value of these solutions will only increase, sustaining the dominance of the Professional Services segment in the Global Category Management Software Market.

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Regional Insights

In 2022, North America dominated the Global Category Management Software Market and is expected to maintain its dominance during the forecast period. North America has a well-established and mature market for category management software, driven by the presence of large enterprises and early adopters of advanced technologies. The region's dominance can be attributed to several factors. Firstly, North American organizations have recognized the importance of category management in optimizing sales, improving customer satisfaction, and driving profitability. As a result, there has been a significant focus on implementing category management software to streamline processes and gain a competitive edge. Secondly, North America is home to several major players in the category management software market, including software vendors and service providers. These companies have a strong presence in the region and offer a wide range of solutions tailored to the specific needs of North American businesses. Additionally, North America has a highly developed IT infrastructure and a skilled workforce, enabling organizations to effectively implement and utilize category management software. Furthermore, the region has stringent regulatory requirements, particularly in industries such as retail and consumer goods, which drive the adoption of category management software to ensure compliance and data security. The presence of a large number of retail chains and consumer goods companies in North America further fuels the demand for category management software. Overall, with its mature market, technological advancements, and strong industry players, North America is expected to maintain its dominance in the Global Category Management Software Market during the forecast period.

Recent Developments

• In September 2023, Coupa Software Inc. announced a strategic partnership with IBM to enhance its category management software's capabilities. This collaboration aims to integrate IBM's advanced artificial intelligence (AI) and machine learning (ML) technologies into Coupa's platform. By doing so, both companies aspire to provide organizations with more intelligent and data-driven insights for category management, enabling better decision-making and optimization of procurement strategies.
• In February 2023, Jaggaer, a leading player in the category management software market, unveiled its latest software update at the ProcureCon Indirect East Conference. The update introduces innovative features such as predictive analytics, supplier risk management enhancements, and improved supplier collaboration tools. With these additions, Jaggaer aims to empower organizations to proactively manage their categories, reduce supply chain risks, and foster stronger supplier relationships.
• In July 2022, SAP Ariba introduced a groundbreaking integration with blockchain technology to its category management software suite. This integration enables end-to-end visibility and transparency across the procurement process, from sourcing to payment. By leveraging blockchain's immutable ledger capabilities, organizations using SAP Ariba can enhance supplier accountability, reduce fraud, and streamline the procurement lifecycle, ultimately leading to greater efficiency and trust in the supply chain.
• In November 2022, Ivalua, a prominent category management software provider, expanded its platform's sustainability and supplier diversity capabilities. The update includes enhanced tracking of environmental, social, and governance (ESG) metrics and a supplier diversity portal for organizations to monitor and promote diversity within their supply chains. Ivalua's focus on sustainability and diversity reflects the growing importance of responsible procurement practices in today's business landscape.

Key Market Players

·         JDA Software Group, Inc.

·         SAP SE

·         Oracle Corporation

·         IBM Corporation

·         Infor, Inc.

·         Nielsen Holdings PLC

·         SAS Institute Inc.

·         Manhattan Associates, Inc.

·         Symphony RetailAI

·         Aptos, Inc.

·         Blue Yonder Group, Inc.

·         GEP Worldwide

·         Coupa Software Inc.

Report Scope:

In this report, the Global Category management software Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Global Category management software Market, By Solution:

o   Planogram Software

o   Floor Planning Software     

• Global Category management software Market, By Service:

o   BFSI

o   Government

o   IT and Telecommunications

o   Retail    

• Global Category management software Market, By Deployment:

o   On-premises

o   Cloud-based

• Global Category management software Market, By Enterprise Size:

o   Large Enterprises

o   Small & Medium Enterprises

• Global Category management software Market, By Application:

o   Retail

o   Distribution

• Global Category management software Market, By Region:

o   North America

o   Europe

o   South America

o   Middle East & Africa

o   Asia Pacific

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the Global Category management software Market.

Available Customizations:

Global Category management software Market report with the given market data, Tech Sci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).