Artificial Intelligence in Retail Market Research Report By Application (Customer Service, Inventory Management, Sales and Marketing, Fraud Detection, Supply Chain Optimization), By Deployment Mode (Cloud-Based, On-Premises, Hybrid), By Technology (Machine Learning, Natural Language Processing, Computer Vision, Robotic Process Automation), By End Use (E-commerce, Brick-and-Mortar Stores, Wholesale and Distribution) and By Regional (North America, Europe, South America, Asia Pacific, Middle East and Africa) - Forecast to 2035

Artificial Intelligence In Retail Market Summary

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). The market is driven by the increasing demand for personalized shopping experiences and operational efficiency through AI-driven automation.

Key Market Trends & Highlights

Key trends shaping the Artificial Intelligence in Retail Market include advancements in technology and changing consumer expectations.

• Artificial Intelligence in Retail Market expected to grow from USD 10.21 Billion in 2024 toUSD 45.0 Billion by 2035.
• Inventory Management segment projected to rise from 1.9 USD Billion in 2024 to 8.42 USD Billion by 2035.
• Sales and Marketing application to increase from 2.5 USD Billion in 2024 to 11.15 USD Billion by 2035.
• North America to dominate the market with a valuation of 4.85 USD Billion in 2024, reaching 20.0 USD Billion by 2035.

Market Size & Forecast

2023 Market Size: USD 8.92 Billion

2024 Market Size: USD 10.21 Billion

2035 Market Size: USD 45.0 Billion

CAGR (2025-2035): 14.44%

Largest Regional Market Share in 2024: North America.

Major Players

Key players include Amazon, IBM, NVIDIA, SAP, ThoughtSpot, Salesforce, Adobe, C3.ai, Blue Yonder, Dynatrace, Google, SAS, Microsoft, Zebra Technologies, Oracle.

Key Artificial Intelligence in Retail Market Trends Highlighted

The Artificial Intelligence in Retail Market is seeing many important market trends as a result of technical improvements and shifting customer habits. One of the primary reasons is the growing need for personalized shopping experiences, as merchants use AI systems to evaluate consumer data and tailor products. Furthermore, the increasing emphasis on cost effectiveness and operational optimization via AI solutions such as supply chain management and inventory forecasting is changing the way shops operate. This transition not only improves consumer pleasure but also lowers costs, encouraging more merchants to implement AI technology.

The market offers opportunities for the integration of AI with new technologies such as the Internet of Things (IoT) and blockchain, which may further simplify processes and increase transparency. Furthermore, there is a rising interest in using AI to improve customer service through chatbots and virtual assistants, which increases engagement and responsiveness to client requests. Furthermore, the growing number of online and omnichannel businesses presents an ideal environment for AI solutions that can evaluate multichannel data to provide insights into customer preferences. Recent trends also show a considerable increase in the usage of advanced analytics and machine learning algorithms to better predict trends and customer demands.

Retailers are increasingly turning to AI-driven pricing techniques to stay competitive in dynamically shifting industries. Furthermore, the changing legal landscape around data privacy and security is impacting how AI solutions are deployed, encouraging models that balance innovation and compliance. Overall, the Artificial Intelligence in Retail Market is expected to develop significantly as technology improvements meet the changing demands of customers and merchants alike.

Source: Primary Research, Secondary Research, MRFR Database and Analyst Review

Artificial Intelligence in Retail Market Drivers

Increasing Demand for Personalization

One of the primary drivers of the Artificial Intelligence in Retail Market Industry is the increasing demand for personalized shopping experiences. Consumers are increasingly seeking tailored services that align with their preferences and purchasing behaviors. According to a recent survey by the American Marketing Association, about 80% of shoppers are more likely to make a purchase when brands offer personalized experiences. Major retailers like Amazon and Walmart heavily utilize Artificial Intelligence technologies to analyze customer data, enabling them to provide recommendations and personalized offers to consumers.

This bespoke shopping experience is driving the growth of Artificial Intelligence in retail, as companies leverage data analytics and Machine Learning to enhance customer engagement, thus solidifying the future growth of the Artificial Intelligence in Retail Market.

Operational Efficiency through Automation

The push for operational efficiency is another significant driver propelling the growth of the Artificial Intelligence in Retail Market Industry. Retailers are increasingly turning to automation facilitated by Artificial Intelligence to streamline their operations. According to the World Economic Forum, companies that incorporate AI solutions can see productivity gains of up to 40%. Organizations like Target have implemented AI systems to manage inventory and forecast demand more accurately, reducing waste and improving the supply chain.

This transition towards smart inventory management leads to reduced costs and faster turnaround times, further stressing the importance of AI in retail and its prospects within the Global market.

Enhanced Customer Service through AI Chatbots

Enhanced customer service facilitated by Artificial Intelligence chatbots is driving the expansion of the Artificial Intelligence in Retail Market Industry. The rise of chatbots has transformed the way retailers interact with customers. Reports indicate that around 75% of customers prefer to engage with businesses through chatbots, primarily due to their availability 24/7 and quick response times. Companies like Sephora and H&M have successfully integrated chatbots that handle customer inquiries efficiently, thereby improving customer satisfaction and retention rates.

As customer expectations continue to evolve, leveraging AI for improved service will be a crucial factor in ensuring sustainable growth in the Artificial Intelligence in Retail Market.

Artificial Intelligence in Retail Market Segment Insights

Artificial Intelligence in Retail Market Application Insights  

The Artificial Intelligence in Retail Market has seen substantial advancements across its various applications, fundamentally transforming operational efficiency and customer engagement in the retail sector. By 2024, the market is expected to be valued at approximately 10.21 USD Billion, reflecting the growing investment in AI technologies. Key applications within this market include Customer Service, Inventory Management, Sales and Marketing, Fraud Detection, and Supply Chain Optimization, each playing a vital role in enhancing the retail experience. The Customer Service application is projected to be valued at 2.54 USD Billion in 2024 and is expected to grow to 11.3 USD Billion by 2035, dominating the market with personalized shopping experiences and improved customer interaction. The significance of this application lies in AI-driven chatbots and virtual assistants that optimize customer support and engagement, ultimately fostering customer loyalty. Inventory Management is another essential component of this market, currently valued at 1.97 USD Billion in 2024 and anticipated to reach 8.81 USD Billion in 2035. This application employs AI algorithms to predict stock levels, streamline supply processes, and reduce waste, significantly driving operational cost efficiency for retailers. 

Sales and Marketing applications are also gaining traction, with a valuation of 2.92 USD Billion in 2024, expected to rise to 12.83 USD Billion in 2035. AI technologies assist in targeting marketing campaigns and analytics, providing retailers with crucial data to enhance customer acquisition strategies. These insights can refine promotional efforts, ensuring they align closely with consumer behavior and preferences. Fraud Detection stands at a valuation of 1.56 USD Billion in 2024, projected to reach 6.96 USD Billion by 2035. AI's capabilities in identifying unusual transactions and patterns become indispensable for minimizing losses and safeguarding both retailers and consumers. Finally, Supply Chain Optimization is valued at 1.22 USD Billion in 2024 and is expected to grow to 5.1 USD Billion by 2035. By utilizing predictive analytics, this application enhances delivery accuracy, reduces supply chain bottlenecks, and ultimately contributes to a more resilient retail environment. Each application segment collectively reinforces the Artificial Intelligence in Retail Market, underlining a significant shift towards data-driven decision-making that enhances customer satisfaction and operational effectiveness across the board.

Source: Primary Research, Secondary Research, MRFR Database and Analyst Review

Artificial Intelligence in Retail Market Deployment Mode Insights  

The Artificial Intelligence in Retail Market's Deployment Mode segment plays a critical role in shaping the industry's landscape, contributing significantly to the market's overall growth and value. By 2024, the market is poised to achieve a valuation of 10.21 USD Billion, expanding to a projected 45.0 USD Billion by 2035. Within this segment, the trend towards Cloud-Based solutions is notable, as businesses increasingly prefer flexibility and scalability, enabling them to adopt AI technologies with ease. On-Premises deployment, while traditionally preferred for security concerns, faces growing competition from Cloud-Based models.

The Hybrid approach combines the strengths of both Cloud and On-Premises solutions, allowing retailers to manage sensitive information securely while taking advantage of cloud flexibility. The Artificial Intelligence in Retail Market statistics indicate that retail organizations are investing in AI to enhance customer experiences and streamline operations. Factors driving market growth include increasing consumer demand for personalized shopping experiences, advancements in AI technologies, and the ability to analyze large datasets effectively.

This segment not only highlights the rapid evolution of retail strategies but also underscores the importance of selecting the appropriate deployment method for maximizing operational efficiency and responding to market dynamics.

Artificial Intelligence in Retail Market Technology Insights  

The Artificial Intelligence in Retail Market segment focusing on Technology is experiencing substantial growth, with the total market expected to reach 10.21 USD Billion by 2024. By 2035, this figure is projected to increase to 45.0 USD Billion, driven by the increasing integration of AI technologies in retail operations. Machine Learning occupies a significant role in transforming retail practices by analyzing large datasets to predict consumer behavior and optimize inventory management. Natural Language Processing enhances customer interactions through chatbots and personalized recommendations, making shopping more intuitive.

Computer Vision is crucial for automating processes in stores, including inventory tracking and checkout systems, improving efficiency and accuracy. Robotic Process Automation streamlines repetitive tasks, allowing retailers to focus on strategic decisions. The Artificial Intelligence in Retail Market data reveal that these technologies are essential for adapting to market trends and challenges, such as changing consumer preferences and competitive pressures, positioning retailers to capitalize on emerging opportunities and enhance overall customer experience.

Artificial Intelligence in Retail Market End Use Insights  

The Artificial Intelligence in Retail Market has shown significant growth, with expectations of reaching a valuation of 10.21 billion USD by 2024 and further increasing substantially to 45.0 billion USD by 2035. This market encompasses various End Use categories, including E-commerce, Brick-and-Mortar Stores, Wholesale, and Distribution, which highlight the diverse applications of AI technologies. E-commerce has emerged as a vital segment, driving demand through tailored customer experiences and enhanced personalized recommendations, keeping pace with changing consumer behaviors.

Meanwhile, Brick-and-Mortar Stores leverage AI for inventory management, improving operational efficiency, and providing in-store customer engagement, which is crucial in creating a competitive edge. The Wholesale and Distribution sector benefits from AI by automating supply chain processes, ensuring optimal stock levels, and reducing costs, which are key factors in a globalized economy. Together, these segments contribute to a well-rounded understanding of the Artificial Intelligence in Retail Market revenue and showcase powerful opportunities and market growth drivers amidst challenges such as technological integration and data privacy concerns, ultimately shaping the future of retail on a global scale.

Artificial Intelligence in Retail Market Regional Insights  

The Artificial Intelligence in Retail Market exhibits notable regional segmentation, highlighting varying levels of adoption and investment across different areas. In 2024, North America emerges as the dominant region with a valuation of 4.08 USD Billion, projected to reach 18.0 USD Billion by 2035, indicating its majority holding in the market. This growth is propelled by advanced technology infrastructure and increasing consumer demand for personalized services. Europe follows with a market value of 2.74 USD Billion in 2024 and an estimated growth to 12.0 USD Billion by 2035, driven by strong retail sector innovation and regulatory support.

The Asia Pacific region, valued at 2.72 USD Billion in 2024 and expected to grow to 10.2 USD Billion by 2035, is also significant due to rapid urbanization and a burgeoning e-commerce sector. South America and the Middle East and Africa, albeit smaller in valuation, have growth potential with figures of 0.52 USD Billion and 0.15 USD Billion, respectively, in 2024, rising to 2.5 USD Billion and 2.3 USD Billion by 2035. These markets represent emerging opportunities for artificial intelligence in retail, addressing unique regional demands and fostering technological advancements.

Overall, the Artificial Intelligence in Retail Market segmentation underscores profound trends in technology adoption, economic growth, and consumer behavior across diverse regions.

Source: Primary Research, Secondary Research, MRFR Database and Analyst Review

Artificial Intelligence in Retail Market Key Players and Competitive Insights

The Artificial Intelligence in Retail Market is experiencing significant growth as retailers leverage advanced technologies to enhance customer experiences, streamline operations, and develop personalized marketing strategies. This burgeoning market is rife with competitive dynamics as businesses seek to differentiate themselves through innovative solutions powered by artificial intelligence. Companies in this space are increasingly investing in machine learning, data analytics, and automation technologies to drive efficiency and improve decision-making processes. As the industry evolves, insights into the competitive landscape become crucial for understanding market trends, emerging players, and opportunities for growth. The adoption of AI is being propelled by the need for retailers to respond to changing consumer behaviors and preferences, paving the way for fierce competition among market participants.

Shopify has established a strong foothold in the Artificial Intelligence in Retail Market by providing a robust e-commerce platform that integrates AI-driven tools to empower retailers of all sizes. The company's strengths lie in its user-friendly interface, seamless integrations with third-party applications, and emphasis on customer support, making it an attractive option for businesses looking to harness the power of AI. Shopify's capabilities include AI-enhanced customer insights, automated inventory management, and personalized product recommendations, which enable retailers to enhance overall efficiency and drive sales. The company's widespread presence across various regions facilitates its role as a key player in advancing AI solutions within the retail sector. Moreover, its ecosystem approach allows partners to contribute additional services, creating a rich environment that fosters innovation and collaboration.

Oracle, as a major entity in the Artificial Intelligence in Retail Market, offers a comprehensive suite of AI-based solutions tailored for retail operations. Known for its cloud-based services, Oracle delivers tools that optimize inventory management, enhance customer engagement, and enable predictive analytics. The strength of Oracle lies in its extensive product portfolio, combining advanced data capabilities and machine learning technologies to meet the dynamic needs of retailers worldwide. The company has developed key products, such as its Retail Cloud and Customer Experience platforms, which streamline processes and improve decision-making. Oracle's strategic initiatives, including acquisitions aimed at augmenting its AI capabilities, have fortified its market presence and positioned it as a leader in the sector. These efforts, coupled with a focus on continuous innovation, solidify Oracle's significance in shaping the future of AI applications in retail on a global scale.

Key Companies in the Artificial Intelligence in Retail Market Include

• Shopify


• Oracle


• Microsoft


• NVIDIA


• Fractal Analytics


• IBM


• Alibaba


• Google


• Lightwave


• Cognex


• Zebra Technologies


• SAP


• Salesforce


• Sensory


• Amazon

Artificial Intelligence in Retail Market Industry Developments

The Artificial Intelligence in Retail Market has seen significant developments recently, with numerous companies enhancing their offerings. Shopify, Oracle, Microsoft, and Amazon are increasingly integrating AI-driven solutions to optimize customer experiences and streamline supply chains. In August 2023, NVIDIA announced an expansion of its AI services tailored for retail, which is projected to enhance inventory management and customer interaction. Additionally, IBM's partnership with Fractal Analytics aims to leverage AI for predictive analytics in retail.

Notably, Oracle completed its acquisition of a leading AI startup in July 2023, further strengthening its capabilities in retail analytics. Alibaba and Google have also made strides by adopting machine learning for personalized marketing, showcasing a commitment to sophisticated retail technologies. The market’s growth trajectory is notable, with reports indicating that the segment is expected to surpass USD 30 billion by 2025, driven by heightened demand for AI solutions. In past years, developments such as the launch of Amazon Go in December 2016 revolutionized the retail space, and ongoing advancements reflect a robust commitment to integrating AI across the sector for enhanced operational efficiency and customer engagement.

Artificial Intelligence in Retail Market Segmentation Insights

Artificial Intelligence in Retail Market Application Outlook

• Customer Service


• Inventory Management


• Sales and Marketing


• Fraud Detection


• Supply Chain Optimization

Artificial Intelligence in Retail Market Deployment Mode Outlook

• Cloud-Based


• On-Premises


• Hybrid

Artificial Intelligence in Retail Market Technology Outlook

• Machine Learning


• Natural Language Processing


• Computer Vision


• Robotic Process Automation

Artificial Intelligence in Retail Market End Use Outlook

• E-commerce


• Brick-and-Mortar Stores


• Wholesale and Distribution

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	Shopify, Oracle, Microsoft, NVIDIA, Fractal Analytics, IBM, Alibaba, Google, Lightwave, Cognex, Zebra Technologies, SAP, Salesforce, Sensory, Amazon
Segments Covered	Application, Deployment Mode, Technology, End Use, Regional
Key Market Opportunities	Personalized customer experiences, Inventory management optimization, Predictive analytics for sales, Enhanced supply chain efficiency, Chatbots for customer support
Key Market Dynamics	personalized customer experiences, inventory management optimization, predictive analytics utilization, enhanced fraud detection, automated supply chain operations
Countries Covered	North America, Europe, APAC, South America, MEA