Product Analytics Market Size, Share & Industry Analysis, By Component (Software/Tools and Services), By End-user (Consumer Tech, Fintech, Media, and E-Commerce), and Regional Forecast, 2024-2032

The global product analytics market size was valued at USD 7.86 billion in 2023. The market is projected to be worth USD 9.09 billion in 2024 and reach USD 27.01 billion by 2032, exhibiting a CAGR of 14.6% during the forecast period.

Product analytics allows enterprises to carry out a thorough analysis and gain a holistic understanding of their users' needs. To ensure that these needs are met, updates are made as organizations are better equipped to understand user needs. According to Forbes 2023, data-driven businesses are 23 times more likely than competitors to acquire new customers, almost 19 times more likely to remain profitable, and nearly 7 times more possibly to retain existing customers.

The growing demand for product analytics software from end-users, such as e-commerce, customer tech, and media is anticipated to drive the market demand. The increased use of product analytics across all digital platforms helps leverage insights into customer experience, which are a few major factors that are expected to create market opportunities in the coming years. For instance,

• In March 2023, Adobe launched the Adobe Product Analytics offering in its Adobe Experience Cloud. By merging customer journey insights between marketing and products, the new application recasts the category of product analysis.

The impact of COVID-19 on the market has been exceptional and surprising, with components witnessing a diverse demand across the globe during the pandemic.

Product Analytics Market Trends

Advanced Analytics and Artificial Intelligence (AI) Integration with Product Analytics to be an Emerging Market Trend

Through BI and product analytics solutions, organizations may discover business drivers and Key Performance Indicators (KPIs) through data visualization. It assists in the elimination of redundant data to uncover patterns, insights, trends, and use plans, all of which aid in the product analytics market growth. Artificial Intelligence (AI) has changed the way digital solutions work. Hence, while choosing product analytics, key vendors look for advanced analytics and artificial intelligence (AI) capabilities. Most businesses are now using a streamlined procedure that entails identifying, collecting, preserving, and exchanging a huge quantity of data. For this data, BI solutions are utilized to have a quick and simple business decision-making process.

Artificial intelligence and advanced analytics-based software help organizations that enable product teams to analyze, visualize, and track customer behavior and engagement data. Also, it allows product managers and teams to evaluate the effectiveness of the digital experiences they create and provides crucial data for optimizing performance, diagnosing issues, and correlating customer behavior with long-term value.

• In March 2024, Accenture completed the acquisition of GemSeek, a customer experience analytics provider that helps global enterprises understand customers through insights, analytics, and AI-powered predictive models. This acquisition aims to improve the customer experience and to improve the performance of the product.

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Product Analytics Market Growth Factors

Increasing Need to Improve Customer Behavior Management to Aid the Market Growth

The increasing need for product recommendation engines that provide personalized service to end users is increasing day by day. These recommendation tools help organizations increase the potential of their marketing efforts by optimizing customer behavior and service efforts. According to the Harvard Business Review report, personalization of products can help deliver an eight times higher rate of investment in marketing and help improve sales by more than 10%.

Further, predictive recommendation enables end users or retailers to deliver the right offers at the right time resulting in the conversion of money spent per transaction. The end user’s interest is demonstrated through their history and behavior, which allows the product recommendation tool to automatically pair that behavior with the right suggestions. Hence, product analytics plays a very important role in analyzing customer behavior.

Increased Demand for Cloud-Based Analytics Solutions to Fuel the Market Growth

Cloud-based analytics helps in analyzing the data using cloud computing with the assistance of a wide range of analytics techniques and tools. Cloud analytics helps organizations extract massive data and present it readily available via the web browser.

The innovation benefits provided by product analytics providers directly impact the enterprise business value, particularly for key market players. Also, cloud analytics platforms allow agile customization to the enterprise's unique aspects. For instance,

• In August 2023, Tellius, the AI-powered decision intelligence platform, expanded its partnership with Google Cloud to launch an upgraded version for data-driven decision-making and product analytics. This integration enables enterprises to analyze Google Cloud data products directly without moving information.

RESTRAINING FACTORS

Privacy and Security Issues to Hamper Market Growth

Technologies including artificial intelligence and machine learning are among the best technologies in an organization’s cyber security resource. Also, these technologies are more likely to malicious attacks, as cyber hackers are adopting AI and ML much faster than security leaders. The use of such technologies by attackers impacts business data and assets; this is considered to be the restraining factor for the market. Organizations using this service are concerned about the data leak over the internet that unauthorized users can easily access.

Product Analytics Market Segmentation Analysis

By Component Analysis

Software/Tools to Lead Market Owing to the Rising Demand from E-Commerce and Fintech

The market is divided into software/tools and services based on the component. The software/tools held the largest product analytics market share in 2023. The demand for tools, such as Google Analytics, Amplitude Analytics, and others is driving this expansion. Key players are expediting their efforts on creating and delivering advanced product analytics solutions for various industries, including e-commerce, financial & banking, consumer technology, and others. For Instance,

• In November 2022, IBM announced new software that helps them break down the storage systems for information and analytical applications. This launch aims to cope with unforeseen disruptions and to help companies quickly and effectively make data-driven decisions.

The services segment is predicted to rise at the highest CAGR throughout the projection period due to the increased usage of digital devices such as mobiles, tablets, laptops, and others. 

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By End-user Analysis

Increasing Popularity of Product Analytics among E-Commerce to Gain Traction

The market is classified into e-commerce, fintech, consumer tech, and media, based on the end-user. The e-commerce industry dominated the market in 2023. This is primarily due to the increased adoption of mobile technologies and soaring internet usage with rising disposable income. Customers are also becoming stronger and more aware of their requirements and potential solutions. They are investing their money in online retail networks to propel e-commerce forward.

The fintech industry is expected to rise at the highest CAGR during the forecast period. Increased demand for improved customer interaction and business analytics in the banking and finance sectors will aid market growth. Additionally, the growing adoption of automated virtual financial assistants in fintech organizations will also help boost the market. Furthermore, consumer tech and media industries are expected to grow at a steady rate owing to rising internet penetration and digitization.

REGIONAL INSIGHTS

Geographically, the market is segmented across five major regions, namely, North America, Europe, Asia Pacific, the Middle East & Africa, and South America.

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North America held the largest market share in 2023 owing to the early implementation of modern technologies, robust economic landscape, and digital usage. Additionally, major firms, such as Amplitude, Inc., Heap, Inc., Mixpanel, Pendo.io, Indicative Inc. and others, have contributed to the region's success. Furthermore, increased investment by key companies to extend their global footprint is likely to drive market growth in North America. For Instance,

• In June 2021, Amplitude Inc., headquartered in California, United States, introduced "Amplitude Experiment," the first experimentation solution based on consumer behavior and product analytics in the industry. This system provides organizations with end-to-end experimentation and delivery workflow that leverages consumer data at every process level, from hypothesis development to customer targeting and reporting.

Key Players in Europe are increasingly embracing the concept of product analytics software that is boosting the growth of the product in the region. Investments by key players, government projects, and increasing funding in research and development activities are driving factors for the region’s growth.

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Asia Pacific is predicted to grow at the highest CAGR during the forecast period. The focus of major companies in India, Japan, China, Australia, and other countries is on digitized applications. These countries have a considerable number of small and medium businesses (SMEs) in the e-commerce industry. The countries in the APAC region, including Australia, China, and others are adopting product analytics tools, and implementing business intelligence in their banking, financial services, and e-commerce sector. These factors will contribute to the product analytics market growth shortly.

In particular, South America and the Middle East and Africa regions are likely to rise significantly. Owing to increased investment in digital projects and government initiatives in Iran, Brazil, Israel, Turkey, and other nations are primarily contributing to the growth. For instance, in June 2021, the International Financial Corporation (IFC) launched the DigiLab program in the Middle East and Africa. This launch will help financial institutions in improving digital services. Similarly, in November 2021, Virgin Mobile launched a digital carbon offsetting app. This app will be soon launched in Kuwait, Oman, and Saudi Arabia. Further, the launch of all such digital projects is anticipated to drive the growth of the market in the region.

List of Key Companies in Product Analytics Market

Key Players to Develop Effective Analytics Solutions to Satisfy Rising Demand of Consumers

Companies operating in the market such as Amplitude Inc., Heap, Inc., Mixpanel, Pendo.io, Gainsight, Hevo Data, Inc., Fullstory, Inc., Looker Data Science, Inc., PostHog, Inc., Indicative Inc., Woopra, Inc., and others, are focused on developing and offering efficient product analytics solutions. Also, the high competition in the market is forcing service providers to focus on acquisition strategies to strengthen their positions.

List of Key Companies Profiled:

• Amplitude Inc. (U.S.)


• Heap, Inc. (Contentsquare) (U.S.)


• Mixpanel (U.S.)


• Pendo.io (U.S.)


• Gainsight (U.S.)


• Hevo Data, Inc. (U.S.)


• Fullstory, Inc. (U.S.)


• Looker Data Science, Inc. (U.S.)


• Indicative Inc. (U.S.)


• PostHog, Inc. (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• September 2023 – Contentsquare, a provider of digital experience analytics, acquired Heap, a product analytics platform. The financial terms of the agreement have not been disclosed. With deeper and broader insight, the acquisition of Heap expands Contentsquare's platform capabilities.


• June 2023 – ThoughtSpot, an AI-powered analytics platform valued at USD 4.5 billion, announced that it agreed to acquire Mode Analytics, a BI startup, for USD 200.0 million in stock and cash.


• February 2023 – Whatfix, the global market player in digital adoption platforms, launched a new product line called Product Analytics. It enables organizations to visualize, track, and analyze user behavior and engagement data with a unified dashboard, ensuring data consistency and no-code event tracking.


• May 2022 – Amplitude launched the customer data platform with integrated product analytics. The Amplitude CDP enables it to collect and analyze data from its product analytics platform without having to connect with third-party analytical services.


• April 2021 – Gainsight launched Horizon Analytics to provide analytics and reporting offerings to the customer success software platform. This launch will further assist end users in relevant reporting, enhance retention, make better decisions, and uncover faster insights.

REPORT COVERAGE

The global product analytics market research report provides an in-depth analysis of the market. It focuses on key aspects such as leading companies, product Industry, and leading product applications. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the factors mentioned above, the report encompasses several key factors that have contributed to the market's growth over recent years.

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REPORT SCOPE & SEGMENTATION