The product analytics market is expected to grow from US$ 9,165.5 million in 2021 to US$ 28,090.5 million by 2028; it is estimated to grow at a CAGR of 17.4% from 2021 to 2028.

Product analytics helps businesses analyze how users engage with products and services, enabling them to track and visualize user engagement and behavior information. Studying this data assist companies in optimizing their product offerings and increasing customer satisfaction. Product analytics tools provide product managers and teams with a quantitative understanding of user interaction with their products. The idea is to obtain an aggregated view of how many users use a feature, the number of times a user clicks a specific button, and what type of product and services they prioritize. There is a growing trend worldwide in which companies gather data from potential customers through surveys and interviews to learn about the risks and challenges before launching a new product in the market. The companies analyze the customer's behavioral data and validate their previous hypothesis on which they designed the product using this information.  A 2019 survey conducted by Microsoft reveals that data analytics implementation has skyrocketed in just a few years. Big data adoption observed a massive rise of 42% from 2015 to 2018. Advantages such as better decision-making are propelling the demand for product analytics market across the world. Product analytics uses data to help organizations make informed decisions and improve accuracy, efficiency, and response time. It also gives the product managers a clearer image of their goals and objectives. Businesses rapidly use data visualization to track their current and past performance against key performance indicators (KPIs). Other benefits offered by the product analytics tool include tracking trends, customer behavior, and market shifts that business owners and marketers can utilize while launching their products. This data allows them to build efficiency by identifying any breakdown in process in almost real-time and saving time, money, and resources. Immense pressure on the organizations to consistently gain new clients is augmenting the demands for product analytics to maximize customer experience and maintain a long-term relationship. By sharing valuable data, customers expect better and convenient products that offer smooth experiences on the consumer side. Customers use several channels to communicate with businesses. Product analytics enables businesses to incorporate both modern and traditional data sources to collect, store and analyze customer behavior and provide them with meaningful services in real-time.

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Product Analytics Market: Strategic Insights

Product Analytics Market

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  CAGR (2021 - 2028)

  17.4%
• Market Size 2021
  US$ 9.17 Billion
• Market Size 2028
  US$ 28.09 Billion

Market Dynamics

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FUTURE TRENDS

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OPPORTUNITIES

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Key Players

• Amplitude, Inc.
• Gainsight
• Heap Inc.
• IBM Corporation
• Mixpanel
• Pendo.io, Inc.
• LogRocket, Inc
• Smartlook
• USERIQ

Regional Overview

• North America
• Europe
• Asia-Pacific
• South and Central America
• Middle East and Africa

Market Segmentation

Component

• Solutions and Services

Deployment

• On Premise and Cloud-Based

Mode

• Tracking Data and Analyzing Data

Vertical

• Retail and Consumer Goods
• Food and Beverages
• Healthcare and Pharmaceuticals
• Energy and Utilities
• Automotive
• Manufacturing
• Others

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Impact of COVID-19 Pandemic on Product Analytics Market

After witnessing a significant drop in 2020 due to the onset of COVID-19 outbreak, the global e-commerce market has begun witnessing a gradual recovery in consumer demand since the last quarter of 2020. Rapid recovery in online product sales is anticipated to boost the demand for product analytics software to manage and analyze customer interaction with products. According to the United Nations Conference on Trade and Development, the COVID-19 pandemic has led to a surge in e-commerce and digital transformation, amid slowing economic activity. Retailers are working to efficiently cater to the growing customer demand. Adjusting to the new normal, businesses and consumers are providing and purchasing goods and services online. Fluctuating consumer preferences and behavior due to the changing pandemic scenario would positively influence the product analytics market during the forecast period. Companies are investing significantly in technology during the current pandemic. The emergence of COVID-19 outbreak has accelerated the role of data analytics platforms enabling them to make significant business decisions. Growth in the unprecedented level of sharing, collaboration, and openness among customers, in response to the COVID-19 pandemic, would help global companies to better prepare for new scenarios, provide options to customers, and maintain the speed of business by analyzing the up-to-date data. All these factors are bolstering the product analytics market growth.

Product Analytics Market Insight

Rise in Usage of Advanced Technologies

Companies can no longer control the product analytics market with only one product due to rapid technological improvements and diverse customer expectations. Many industrial and retail companies are pushed to implement various business strategies, such as technological convergence, to flourish in this fast-changing market. Artificial intelligence improves the functionality of business intelligence applications by allowing organizations to better understand the value of smaller components in a larger picture by breaking down large volumes of data into granular insights. Amazon Go, for example, is disrupting the traditional retail experience by leveraging analytics to increase sales and customer loyalty. Product analytics adds value to that data by merging all available data sources into a single, sorted-out picture, which might help obtain small bits of knowledge.

Product Analytics Market, Deployment Segment Insights

Based on deployment, the product analytics market is bifurcated into on-premise and cloud-based. The cloud-based segment led the market with a share of 68.2% in 2020 and is expected to hold 70.9% share by 2028. The cloud-based segment is also anticipated to register a higher CAGR during the forecast period. The market growth for the cloud-based segment is attributed to the growing demands for data collection, tracking, and analysis on systems hosted in the cloud. Cloud-based analytics tools allow companies to analyze large data sets with ease and improve business results. Smartlook offers a cloud and mobile-based quantitative analytics solution to businesses of all sizes to help them with user behavior and insights on every user action. The solution includes features such as visitor recordings, event tracking, funnels, and heatmaps. Smartlook’s product analytics solution also provides video sessions options to identify customers and features a visitor journey module. There is a growing demand for event tracking among businesses to know how visitors perform certain tasks and their thoughts about a product. Smartlook is primarily used in industries, such as travel, gaming, health care, education, and media. Also, it integrates with many platforms and tools such as Google Analytics, Zendesk, Instapage, Intercom, Shopify, Gambio, Blogger, Magento, and Google Tag Manager. Kissmetrics is another cloud-based customer engagement solution that helps businesses understand website visitors through behavior-based analysis. Pricing is available via monthly subscription, and support is provided through online methods.

Product Analytics Market, Component Segment Insights

Based on component, the product analytics market is bifurcated into solutions and services. The solutions segment led the market with a share of 73.1% in 2020 and is expected to account for 74.8% of the total product analytics market by 2028. Product analytics solutions empower product teams to gain insights into the features and customer actions that lead to outcomes. It helps them gain a deeper understanding of how customers experience digital products. Many benefits offered by product analytics solutions such as analyzing behaviors, identifying personas, tracking engagement, and enabling teams to easily see the complete picture and take faster action are propelling the growth of the product analytics market for the solutions segment. Product analytics solutions turn data into actionable customer scores to drive impactful, cross-functional action. It also enables users to identify root causes of problems and quickly solve them and combine digital and human engagement to enhance processes. Amplitude offers its product analytics solutions to more than 1,400 customers and 26 of the Fortune 100 to analyze how customers use their products and use these insights to maximize business outcomes. Similarly, Gainsight provides tools for the in-depth analysis of customer experience data to uncover customers’ demands. It also helps collect feedback from any part of the customer journey by bringing all of the structured and unstructured data into a single view, such as surveys, meeting notes, and online reviews. Heap Inc helps Software as a Service (SaaS) companies to understand their users, get advanced signals on customer behavior, and build better products. The product analytics solution automatically captures all user data from every click, swipe, pageviews, and fill and helps organizations make data-driven decisions.

Product Analytics Market, Vertical Segment Insights

Based on vertical, the product analytics market is segmented into retail and consumer goods, food and beverages, healthcare and pharmaceuticals, energy and utilities, automotive, manufacturing, and others. The retail and consumer goods segment led the market with 26.5% share in 2020 and is expected to account for 28.3% of the total market share by 2028. The market for the retail and consumer goods segment is anticipated to observe significant growth during the forecast period. Owing to various benefits such as better decision making, cost reduction, and revenue growth, the adoption of product analytics tools by eCommerce companies is expected to increase during the forecast period. Increasing capital investments in analytics by eCommerce companies to drive improved decision making is also propelling the market growth for the segment. There is a growing demand for acquiring new customers at a lower cost and retaining them for maximizing product sales. Thus, companies in the retail sector are implementing product analytics tools and services to study how their users and customers are engaging with their retail products. Product analytics enables them to track the digital footprint of their users to collect information of their preferences along with the product line that they engage with or return. Salesforce.com, Inc’s product analysis software tracks inventory and stores the performance of the business. It monitors and breaks down customer satisfaction scores across stores and regions and analyzes trends over time. This helps retail companies easily understand how marketing directly affects leads by analyzing growth opportunities across regions, segments, and products.

The product analytics market players focus on new product innovations and developments by integrating advanced technologies and features to compete. In December 2021, Heap raised $110M Series D round to fund the future of digital analytics. Heap will use the funds to expand its global operations and speed up research and development of the industry’s most comprehensive digital analytics platform for product builders, growth marketers, and fast-moving analytics teams. Heap’s quick product creation will be aided by the latest funding, which will see the firm release Illuminate, a data-science-powered solution that solves the difficulties of legacy solutions that are ill-equipped to respond to the increasing complexity of the modern customer journey. In December 2020, Pendo announced that it will begin its expansion into Asia-Pacific with operations in Tokyo and Sydney. Japan and Australia have solid technological ecosystems, aggressive digital transformation goals, and enormous talent pools, all of which support Pendo’s entry into these markets.

Product Analytics Market Report Scope

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Based on mode, the global product analytics market is bifurcated into tracking data and analyzing data. Based on component, the market is bifurcated into solutions and services. Based on vertical, the product analytics market is segmented into retail and consumer goods, healthcare and pharmaceuticals, energy and utilities, food and beverages, manufacturing, automotive, and others. Based on deployment, the market is bifurcated into cloud-based and on-premise. Based on geography, the global product analytics market is segmented into five regions—North America, Europe, Asia-Pacific, the Middle East and Africa, and South America.

Amplitude; Gainsight; Heap Inc.; IBM Corporation; Kissmetrics; Mixpanel; Pendo.Io; LogRocket, Inc; Smartlook, and Useriq are a few major companies operating in the product analytics market.