Market Size of AI In Retail Industry
Study Period | 2019 - 2029 |
Market Size (2024) | USD 9.85 Billion |
Market Size (2029) | USD 40.49 Billion |
CAGR (2024 - 2029) | 32.68 % |
Fastest Growing Market | North America |
Largest Market | North America |
Major Players*Disclaimer: Major Players sorted in no particular order |
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AI in Retail Market Analysis
The AI In Retail Market size is estimated at USD 9.85 billion in 2024, and is expected to reach USD 40.49 billion by 2029, growing at a CAGR of 32.68% during the forecast period (2024-2029).
Artificial intelligence, a collection of algorithms harnessing vast and reliable data, is increasingly adopted in retail to personalize the shopping experience. By leveraging customer preferences, retailers can offer tailored product recommendations, elevating the customer experience and driving sales.
- Retail has witnessed a profound digital transformation, propelled by the integration of advanced data analytics and forecasting systems. This, bolstered by the convergence of artificial intelligence and the Internet of Things, has empowered retailers with sophisticated insights to optimize operations and identify lucrative business opportunities. Retailers are turning to AI-powered solutions to tackle challenges like evolving consumer behavior, labor constraints, supply chain disruptions, and escalating costs.
- Recognizing the potential of AI to reduce costs and enhance operational efficiency, retailers are increasingly integrating it into their processes. This shift is reshaping customer service, with AI-powered chatbots revolutionizing interactions. During online purchases, chatbots can suggest products based on customers' preferences, including price range, features, and user reviews. By incorporating recommendation algorithms, retailers can boost sales while customers find products tailored to their preferences.
- Moreover, retailers are forging deeper customer relationships, infusing digital elements into sales, support, merchandising, and finance operations. Beyond AI, technologies like IoT, automation, blockchain, and virtual reality are digitally disrupting the retail landscape. AI-equipped retailers leverage sharp forecasting tools for smarter decision-making while enhanced visual recognition and augmented reality redefine online shopping, enabling customers to experience products virtually.
- The global retail sector is witnessing a surge in AI applications, with both tech giants and SMBs ramping up their efforts. Consequently, the demand for AI engineers has soared, but more experienced professionals are still needed in this field.
- The COVID-19 pandemic has accelerated these trends, leaving retailers grappling to adapt. As consumer behavior tilts toward online, traditional retailers are grappling to bolster their technological capabilities. The pandemic has ushered in a customer-centric paradigm, and companies embracing digital transformation principles are fortifying their operations and reaping significant profits.
AI in the Retail Industry Segmentation
Artificial intelligence is an approach for teaching a computer, a robot operated by a computer, or software to think critically and creatively like a human mind. AI is achieved by examining the cognitive processes and researching the patterns of the human brain. These research projects produce intelligent systems and software.
The artificial intelligence in the retail market is segmented by channel (omnichannel, brick and mortar, and pure-play online retailers), component (software, service [(managed and professional)]), deployment (cloud and on-premise), application (supply chain and logistics, product optimization, in-store navigation, payment and pricing analytics, inventory management, and customer relationship management((CRM))), technology (machine learning, natural language processing, chatbots, image and video analytics, and swarm intelligence) and geography (North America, Europe, Asia-Pacific, and the Rest of World). The report offers the market size in value terms in USD for all the abovementioned segments.
By Channel | |
Omnichannel | |
Brick and Mortar | |
Pure-play Online Retailers |
By Component | |
Software | |
Service (Managed and Professional) |
By Deployment | |
Cloud | |
On-premise |
By Application | |
Supply Chain and Logistics | |
Product Optimization | |
In-Store Navigation | |
Payment and Pricing Analytics | |
Inventory Management | |
Customer Relationship Management (CRM) |
By Technology | |
Machine Learning | |
Natural Language Processing | |
Chatbots | |
Image and Video Analytics | |
Swarm Intelligence |
By Geography*** | |
North America | |
Europe | |
Asia | |
Australia and New Zealand | |
Latin America | |
Middle East and Africa |
AI In Retail Market Size Summary
The AI in Retail Market is projected to witness significant growth in the coming years. This expansion is largely driven by the increasing adoption of artificial intelligence in retail businesses as they strive to streamline their operations, deliver improved results, and enhance online customer engagement. Factors such as the rise in smart devices and internet users, heightened awareness of AI and big data analytics, and government initiatives promoting digitalization are fueling the growth of the global artificial intelligence in the retail market. The retail sector is undergoing a digital transformation, leveraging AI technologies like machine learning and deep learning to turn data into actionable insights. These technologies not only enhance customer experiences but also provide opportunities for increased revenue, rapid innovation, and intelligent operations. Furthermore, the adoption of AI in retail and consumer products is expected to surge significantly in the next few years. The investment in AI-powered predictive and prescriptive analytics is also on the rise in the retail industry. The COVID-19 pandemic has further emphasized the importance of online shopping channels, providing retailers with an opportunity to integrate sustainability initiatives with their digital presence.
Explore MoreAI In Retail Market Size - Table of Contents
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1. MARKET DYNAMICS
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1.1 Market Drivers
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1.1.1 Rapid Adoption of Advances in Technology Across Retail Chain
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1.1.2 Emerging Trend of Startups in the Retail Space
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1.2 Market Restraints
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1.2.1 Lack of Professionals as well as In-house Knowledge for Cultural Readiness
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1.3 Impact of COVID-19 on the Market
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2. MARKET SEGMENTATION
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2.1 By Channel
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2.1.1 Omnichannel
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2.1.2 Brick and Mortar
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2.1.3 Pure-play Online Retailers
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2.2 By Component
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2.2.1 Software
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2.2.2 Service (Managed and Professional)
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2.3 By Deployment
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2.3.1 Cloud
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2.3.2 On-premise
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2.4 By Application
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2.4.1 Supply Chain and Logistics
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2.4.2 Product Optimization
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2.4.3 In-Store Navigation
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2.4.4 Payment and Pricing Analytics
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2.4.5 Inventory Management
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2.4.6 Customer Relationship Management (CRM)
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2.5 By Technology
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2.5.1 Machine Learning
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2.5.2 Natural Language Processing
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2.5.3 Chatbots
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2.5.4 Image and Video Analytics
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2.5.5 Swarm Intelligence
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2.6 By Geography***
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2.6.1 North America
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2.6.2 Europe
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2.6.3 Asia
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2.6.4 Australia and New Zealand
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2.6.5 Latin America
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2.6.6 Middle East and Africa
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AI In Retail Market Size FAQs
How big is the AI In Retail Market?
The AI In Retail Market size is expected to reach USD 9.85 billion in 2024 and grow at a CAGR of 32.68% to reach USD 40.49 billion by 2029.
What is the current AI In Retail Market size?
In 2024, the AI In Retail Market size is expected to reach USD 9.85 billion.