Artificial Intelligence in Retail Market Overview
As per MRFR analysis, the Artificial Intelligence in Retail Market Size was estimated at 8.92 (USD Billion) in 2023.The Artificial Intelligence in Retail Market Industry is expected to grow from 10.21(USD Billion) in 2024 to 45 (USD Billion) by 2035. The Artificial Intelligence in Retail Market CAGR (growth rate) is expected to be around 14.44% during the forecast period (2025 - 2035).
Key Artificial Intelligence in Retail Market Trends Highlighted
Various industry trends are driving notable changes in the Global Artificial Intelligence in Retail industry. Increasing customer desire for tailored shopping experiences is one of the leading market drivers. Retailers are using artificial intelligence tools to examine customer data, hence enabling them to customize marketing plans and suggestions properly. The increasing need for operational efficiency also drives stores to use artificial intelligence-driven automation systems that simplify supply chain operations and inventory control. Opportunities in this field are changing as well, mainly because of developments in natural language processing and machine learning.
By funding chatbots and virtual assistants, which improve customer service and also gather insightful analysis on consumer behavior, retailers may investigate these possibilities. Moreover, the growth of omnichannel commerce increases the urgent need for artificial intelligence solutions linking physical and online shopping experiences effortlessly. Latest trends indicate a growing emphasis on ethical artificial intelligence applications in retail as well as sustainability. Consumers are becoming more aware of the environmental consequences of their purchases, which is driving stores to use artificial intelligence to maximize their operations and minimize waste. Furthermore, the move to mobile and online purchasing has quickened, resulting in more need for artificial intelligence solutions to improve the consumer experience via digital channels.
Businesses are also examining the effects of legal systems meant to guarantee openness and responsibility in artificial intelligence use as they change to accommodate these developments. Driven by technological innovation and evolving customer expectations, Global Artificial Intelligence in Retail Market is on a transforming path.
Fig 1: Artificial Intelligence in Retail Market Overview
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Artificial Intelligence in Retail Market Drivers
Increased Demand for Personalized Shopping Experiences
Consumers are driving the need for individualized shopping experiences in the Global Artificial Intelligence in Retail Market Industry by increasingly appreciating customized suggestions that improve their buying experiences. Studies show that more than 70% of shoppers want tailored interactions with stores, according to the Global Industry Association. By examining consumer data and forecasting buying patterns, companies like Amazon and Alibaba are using Artificial Intelligence (AI) algorithms to increase user involvement and sales.
Market observers say that companies spending much on these tailored procedures can anticipate up to a 20% rise in conversion rates by 2025, thereby promoting the use of artificial intelligence in retail. Such developments underline the need for retailers to use artificial intelligence technology to stay competitive and satisfy changing customer expectations worldwide.
Cost Efficiency and Operational Automation
Artificial intelligence is becoming vital for stores trying to simplify processes and save expenses in the Global Artificial Intelligence in Retail Market Industry. By automating duties such as inventory control, customer support, and supply chain optimization, artificial intelligence is expected to help operating expenses drop by as much as 30%. For instance, big stores like Walmart are using AI-driven inventory systems that precisely forecast stock levels, hence lowering waste and raising turnover rates.
This automation not only increases productivity but also lets employees concentrate on high-value activities. The increasing need for affordable solutions, particularly in light of current global economic difficulties, casts AI as a revolutionary technology in retail.
Better Inventory Management and Supply Chain Optimization
For stores worldwide, efficient inventory control is vital; artificial intelligence is proving to be essential in streamlining supply chains in the Global Artificial Intelligence in Retail Market Industry. Research has shown that artificial intelligence may increase inventory accuracy by over 20%, hence lowering the dangers connected with overstocking and stockouts. Target and Costco are among the companies using artificial intelligence to examine sales data and consumer behavior in order to change inventory levels appropriately.
Fully optimizing supply chains may help reduce operating expenses by around 15%, promoting more sustainable behavior. This emphasis on the effective administration of supply chains guarantees that merchants can quickly react to market changes and meet consumer expectations.
Artificial Intelligence in Retail Market Segment Insights
Artificial Intelligence in Retail Market Application Insights
The Global Artificial Intelligence in Retail Market is experiencing substantial growth, particularly within the Application segment, which plays a pivotal role in enhancing operational efficiencies and customer experiences. By the year 2024, the Customer Service application segment is set to be valued at 2.8 USD Billion, expanding to 12.36 USD Billion by 2035. This growth reflects the increasing importance of AI-driven solutions that provide personalized support and interactive customer engagements. Inventory Management is another critical area, with its valuation projected at 1.9 USD Billion in 2024 and anticipated to grow to 8.42 USD Billion by 2035. This segment holds significant value as effective inventory management ensures optimal stock levels and minimizes waste through predictive analytics and automation.
Additionally, the Sales and Marketing application, valued at 2.5 USD Billion in 2024, is expected to reach 11.15 USD Billion by 2035. This segment utilizes AI to analyze consumer behavior and enhance brand promotion strategies, thereby driving sales and fostering customer loyalty. Fraud Detection stands as a vital component, currently valued at 1.0 USD Billion and expected to rise to 4.4 USD Billion in 2035. As e-commerce continues to flourish, the need for AI systems capable of detecting and preventing fraudulent transactions increases, making this segment increasingly significant.
Supply Chain Optimization, valued at 2.01 USD Billion in 2024, is projected to expand to 8.67 USD Billion by 2035. AI applications in this area improve logistics, reduce costs, and streamline processes, which helps retailers to respond swiftly to market changes. Overall, the Application segment of the Global Artificial Intelligence in Retail Market demonstrates a collective potential where each aspect contributes uniquely to advancements in the industry. The major growth drivers include increasing adoption of AI technologies for enhancing customer satisfaction, improving sales performance, and mitigating risks in inventory management. The evolution of AI technologies also presents opportunities for retailers to innovate service delivery and operational frameworks. However, challenges such as data privacy and integration complexities continue to shape the discussions around the implementation of AI solutions within the retail sector. As these segments evolve, the insights derived from the Global Artificial Intelligence in Retail Market data will play a crucial role in informing future strategies and investments in this dynamic industry. The continual shift towards AI in retail operations depicts a clear trajectory towards modernization and enhanced consumer services, transforming how retailers engage with their customers on a global scale.
Fig 2: Artificial Intelligence in Retail Market Insights
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Artificial Intelligence in Retail Market Deployment Mode Insights
The Global Artificial Intelligence in Retail Market is gaining considerable traction with respect to Deployment Mode, encompassing various strategies such as Cloud-Based, On-Premises, and Hybrid models. As of 2024, the market is valued at approximately 10.21 USD Billion, reflecting a robust interest and investment in AI solutions within the retail sector. The rising preference for Cloud-Based solutions plays a crucial role as it offers scalability, flexibility, and ease of access for retailers aiming to leverage AI technologies without extensive infrastructure investment.On-Premises deployment remains significant, particularly among larger retailers concerned with data security and compliance, thus appealing to those requiring customized AI solutions. Meanwhile, the Hybrid approach is capturing attention for its balanced benefits, allowing retailers to experience the advantages of both Cloud and On-Premises models, facilitating a seamless transition between them. The demand for these deployment modes is fueled by growing competition in the retail landscape and a need for enhanced customer experiences, signaling an ongoing shift towards integrated AI solutions.As this market evolves, understanding the intricacies of these deployment modes will be critical for stakeholders aiming to harness the full potential of AI in retail operations.
Artificial Intelligence in Retail Market Technology Insights
The Global Artificial Intelligence in Retail Market is poised for notable growth, with a valuation expected to reach 10.21 USD Billion by 2024. This segment has been significantly shaped by advancements in various technologies, including Machine Learning, Natural Language Processing, Computer Vision, and Robotic Process Automation. Each technological area contributes uniquely to the retail sector. Machine Learning drives predictive analytics, enhancing inventory management and customer personalization. Natural Language Processing enables intelligent customer interactions, streamlining communication and improving service.Computer Vision plays a crucial role in enhancing the shopping experience through automated checkout systems and in-store analytics, while Robotic Process Automation increases operational efficiency by automating repetitive tasks. The market trend reflects an increasing investment in these technologies, driven by the demand for improved customer experiences and operational efficiencies. Additionally, the rise in e-commerce further propels the need for advanced analytics and customer service solutions, translating into a robust market growth trajectory for the Global Artificial Intelligence in Retail Market.The challenges faced include integration complexities and data privacy concerns, however, the opportunities for innovation and improved service delivery remain significant.
Artificial Intelligence in Retail Market End Use Insights
The Global Artificial Intelligence in Retail Market is expected to reach a valuation of 10.21 USD Billion by 2024, with significant growth anticipated through to 2035. This market encompasses various End Use segments, including E-commerce, Brick-and-Mortar Stores, Wholesale, and Distribution. Each of these segments plays a crucial role in the retail landscape, showcasing diverse applications of artificial intelligence. E-commerce is experiencing a surge in the adoption of AI technologies for personalized shopping experiences and improved customer service, greatly enhancing customer satisfaction and driving sales.Brick-and-Mortar Stores are innovating through AI-driven inventory management and in-store analytics, enabling retailers to optimize both supply chain efficiency and customer engagement. Meanwhile, the Wholesale and Distribution segment leverages AI for demand forecasting and logistics management, which is essential for seamless operations and cost reduction. The expected growth in the Global Artificial Intelligence in Retail Market is driven by technological advancements and increasing investment in digital transformation across these End Use segments, presenting ample opportunities for businesses to innovate and stay competitive in a rapidly evolving retail environment.
Artificial Intelligence in Retail Market Regional Insights
The Global Artificial Intelligence in Retail Market is poised for substantial growth across various regions, with overall expectations placing the market's value at 10.21 USD Billion in 2024 and reaching 45.0 USD Billion by 2035. Within this regional segmentation, North America leads significantly, valued at 4.85 USD Billion in 2024 and projected to rise to 20.0 USD Billion by 2035, illustrating its majority holding in market revenue. Europe follows with a valuation of 2.9 USD Billion in 2024, expanding to 12.0 USD Billion by 2035, driven by increased adoption of technology in retail.The APAC region, valued at 2.1 USD Billion in 2024 and expected to reach 8.5 USD Billion in 2035, is gaining traction due to a rapid shift towards e-commerce and digital engagement. In contrast, South America holds a smaller share with 0.75 USD Billion in 2024, anticipated to grow to 2.5 USD Billion by 2035, reflecting slower technological adoption. Lastly, the MEA region, valued at 0.61 USD Billion in 2024 and set to grow to 2.0 USD Billion, offers potential due to the increasing focus on digitization in retail environments. The adoption of Artificial Intelligence in these regions is influenced by trends such as personalized shopping experiences and the integration of advanced analytics, showcasing significant opportunities for investment and growth in the market.
Fig 3: Artificial Intelligence in Retail Market Regional Insights
Source: Primary Research, Secondary Research, MRFR Database and Analyst Review
Artificial Intelligence in Retail Market Key Players and Competitive Insights
The Global Artificial Intelligence in Retail Market is rapidly evolving as businesses increasingly adopt innovative technologies to enhance the customer experience and streamline operations. Competitive insights reveal that numerous players are actively working to harness AI capabilities for predictive analytics, personalized shopping experiences, inventory management, and customer service automation. Companies are leveraging machine learning and natural language processing to optimize their operations and meet changing consumer demands. The landscape is characterized by a mix of established tech giants and emerging startups, all striving to capture market share through strategic partnerships, acquisitions, and continuous innovation. As digitization accelerates, the competition is becoming more intense, driving firms to differentiate themselves through unique AI applications tailored specifically for the retail sector.Amazon stands out prominently in this competitive landscape, leveraging its vast data resources and advanced AI technologies to revolutionize retail experiences. The company utilizes AI algorithms to analyze shopping patterns and preferences, enabling it to offer highly personalized product recommendations, thereby enhancing customer engagement. Amazon's strength lies in its extensive market presence, with a global footprint that allows it to gather comprehensive consumer insights. This analytical capability not only boosts sales but also enhances operational efficiency through better inventory management and supply chain optimization. Furthermore, Amazon continues to invest heavily in AI research, ensuring it remains at the forefront of technological advancements in the retail sector, providing it with a competitive edge against other players in the industry.IBM has also made significant strides in the Global Artificial Intelligence in Retail Market through its comprehensive suite of AI-driven solutions designed specifically for retailers. By offering products such as Watson and various cloud-based services, IBM empowers retailers to implement advanced data analytics, customer insights, and automation processes. The company's global presence enables it to collaborate with various retail partners, thereby broadening its market reach and impact. One of IBM's key strengths lies in its focus on creating customizable solutions that cater to individual retailer needs, allowing for enhanced consumer interaction and satisfaction. Furthermore, IBM's strategic mergers and acquisitions have bolstered its technology offerings and expanded its capabilities in AI, further solidifying its position as a formidable player in the retail market globally. Through ongoing innovation and a strong emphasis on building data-driven strategies, IBM continues to contribute significantly to the transformation of retail through AI applications.
Key Companies in the Artificial Intelligence in Retail Market Include
-
Amazon
-
IBM
-
NVIDIA
-
SAP
-
ThoughtSpot
-
Salesforce
-
Adobe
-
C3.ai
-
Blue Yonder
-
Dynatrace
-
Google
-
SAS
-
Microsoft
-
Zebra Technologies
-
Oracle
Artificial Intelligence in Retail Market Industry Developments
The Global Artificial Intelligence in Retail Market is witnessing significant developments, with notable advancements implemented by key players like Amazon, IBM, NVIDIA, and Salesforce. Companies are increasingly integrating AI-driven solutions to enhance customer experiences, optimize supply chains, and improve inventory management. In September 2023, Amazon announced a new AI-based recommendation system designed to personalize shopping experiences, which aims to boost conversion rates. Similarly, IBM has expanded its AI analytics solutions for retail, focusing on real-time data insights that facilitate dynamic pricing strategies. In terms of mergers and acquisitions, SAP acquired a majority stake in a prominent AI startup in November 2022 to expand its machine learning capabilities within retail operations. On the growth front, the Artificial Intelligence in Retail Market is projected to reach a valuation of approximately USD 25 billion by 2025, driven by the need for elevated consumer engagement strategies and operational efficiencies across supply chains. Furthermore, in recent years, advancements in AI technologies such as predictive analytics and natural language processing have become vital in shaping retail strategies globally, with companies focusing on integrating these technologies for better decision-making and enhanced customer satisfaction.
Artificial Intelligence in Retail Market Segmentation Insights
Artificial Intelligence in Retail Market Application Outlook
Artificial Intelligence in Retail Market Deployment Mode Outlook
-
Cloud-Based
-
On-Premises
-
Hybrid
Artificial Intelligence in Retail Market Technology Outlook
Artificial Intelligence in Retail Market End Use Outlook
Artificial Intelligence in Retail Market Regional Outlook
-
North America
-
Europe
-
South America
-
Asia Pacific
-
Middle East and Africa
|
Report Attribute/Metric
|
Details
|
|
Market Size 2023
|
8.92(USD Billion)
|
|
Market Size 2024
|
10.21(USD Billion)
|
|
Market Size 2035
|
45.0(USD Billion)
|
|
Compound Annual Growth Rate (CAGR)
|
14.44% (2025 - 2035)
|
|
Report Coverage
|
Revenue Forecast, Competitive Landscape, Growth Factors, and Trends
|
|
Base Year
|
2024
|
|
Market Forecast Period
|
2025 - 2035
|
|
Historical Data
|
2019 - 2024
|
|
Market Forecast Units
|
USD Billion
|
|
Key Companies Profiled
|
Amazon, IBM, NVIDIA, SAP, ThoughtSpot, Salesforce, Adobe, C3.ai, Blue Yonder, Dynatrace, Google, SAS, Microsoft, Zebra Technologies, Oracle
|
|
Segments Covered
|
Application, Deployment Mode, Technology, End Use, Regional
|
|
Key Market Opportunities
|
Personalized shopping experiences, Inventory management optimization, Predictive analytics for sales, Enhanced customer service automation, Fraud detection and prevention.
|
|
Key Market Dynamics
|
Increasing personalization demands, Enhanced inventory management, Cost reduction through automation, Improved customer insights, Supply chain optimization
|
|
Countries Covered
|
North America, Europe, APAC, South America, MEA
|
Artificial Intelligence In Retail Market Highlights:
Frequently Asked Questions (FAQ) :
The Global Artificial Intelligence in Retail Market is expected to be valued at 10.21 USD Billion in 2024.
By 2035, the Global Artificial Intelligence in Retail Market is projected to reach a value of 45.0 USD Billion.
The anticipated CAGR for the Global Artificial Intelligence in Retail Market from 2025 to 2035 is 14.44%.
In 2024, North America is expected to have the largest market share, valued at 4.85 USD Billion.
The market value for the Customer Service application within the Artificial Intelligence in Retail segment is expected to be 12.36 USD Billion by 2035.
Key players in the market include Amazon, IBM, NVIDIA, SAP, and Salesforce among others.
The market size for Supply Chain Optimization within the Artificial Intelligence in Retail Market is projected to be 8.67 USD Billion by 2035.
Asia-Pacific (APAC) is expected to grow significantly, reaching a market value of 8.5 USD Billion by 2035.
The Fraud Detection application is projected to have a market value of 1.0 USD Billion in 2024.
The expected market value for Inventory Management in the Artificial Intelligence in Retail sector is 8.42 USD Billion in 2035.
