US 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) and By End Use (E-commerce, Brick-and-Mortar Stores, Wholesale and Distribution) - Forecast to 2035

US Artificial Intelligence in Retail Market Overview

As per MRFR analysis, the US Artificial Intelligence in Retail Market Size was estimated at 2.27 (USD Billion) in 2023. The US Artificial Intelligence in Retail Market Industry is expected to grow from 2.8(USD Billion) in 2024 to 12 (USD Billion) by 2035. The US Artificial Intelligence in Retail Market CAGR (growth rate) is expected to be around 14.145% during the forecast period (2025 - 2035).

Key US Artificial Intelligence in Retail Market Trends Highlighted

The US Artificial Intelligence in Retail Market is witnessing significant trends driven by consumer demand for personalized shopping experiences and efficient supply chain management. Retailers are increasingly adopting AI solutions to analyze consumer behavior, improve customer engagement, and optimize inventory management. Key market drivers include the need for enhanced customer service, as AI-powered chatbots and virtual assistants are becoming common tools to streamline interactions and gather insights into customer preferences. The implementation of predictive analytics is also gaining traction, allowing retailers to make informed decisions about inventory and promotions based on real-time data. Opportunities to be captured in this market include the integration of AI with augmented reality for virtual shopping experiences that cater to shifting consumer habits.

As omnichannel retailing becomes more prevalent, AI systems that unify online and offline channels offer retailers a competitive advantage. Recent trends showcase a rise in collaboration between technology companies and retailers, as businesses seek to harness machine learning and data analytics to better anticipate market demands. Moreover, the shift towards automation in various retail processes presents substantial growth potential for AI applications, such as robotics in warehouses and automated checkout solutions. The US retail sector is also influenced by regulations and public policy related to data privacy, which can shape how AI technologies are deployed. As retailers navigate these regulatory frameworks, there is a clear push towards developing ethical AI practices that ensure consumer trust while enhancing operational efficiency. Overall, the trends in the US Artificial Intelligence in Retail Market indicate a rapid evolution driven by technology advancements and changing consumer expectations, highlighting the necessity for retailers to adapt swiftly to stay competitive.

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

US Artificial Intelligence in Retail Market Drivers

Increasing Demand for Personalized Shopping Experiences

The US Artificial Intelligence in Retail Market Industry is significantly driven by the increasing demand for personalized shopping experiences among consumers. A strong metric supporting this trend is the 80% of consumers expressing a preference for personalized experiences, according to a report from the US National Retail Federation. Retail giants such as Amazon and Walmart are increasingly investing in Artificial Intelligence technology to analyze consumer behavior, tailor recommendations, and enhance customer satisfaction.

The adoption of AI in retail is leading to improved customer retention and loyalty, ultimately boosting sales and market share. As a result, these initiatives are expected to contribute to the growth of the US Artificial Intelligence in Retail Market, as retailers leverage data-driven insights to cater to the evolving preferences of their customers, thereby expanding their own market potential.

Advancements in Data Analytics and Machine Learning

The rapid advancements in data analytics and machine learning technologies are propelling the growth of the US Artificial Intelligence in Retail Market Industry. Research from the US Bureau of Labor Statistics points out that jobs in data science are projected to grow by 31% from 2019 to 2029, signaling a critical demand for these skills in the retail sector. Companies like Target and Kroger are investing heavily in AI-driven analytics platforms to optimize supply chain management, predict inventory requirements, and reduce costs. By utilizing machine learning algorithms, these retailers can effectively analyze vast amounts of customer data to enhance operations, improve decision-making, and ultimately increase profitability. This growing trend towards sophisticated data analytics is further driving adoption of Artificial Intelligence solutions within the retail industry.

Rise of E-commerce and Omnichannel Retailing

The surge in e-commerce and omnichannel retailing has become a significant driver in the US Artificial Intelligence in Retail Market Industry. The US Department of Commerce reported that e-commerce sales in the US increased by over 40% during the pandemic, which emphasizes the necessity for retailers to adopt Artificial Intelligence technologies to efficiently manage digital channels and customer interactions. Industry leaders such as eBay and Shopify utilize AI to streamline operations and enhance user experiences across various platforms. With the shift towards a more integrated shopping experience, AI tools enable retailers to optimize online and offline merchandise strategies, potentially elevating their sales figures in the dynamic US market.

US Artificial Intelligence in Retail Market Segment Insights

Artificial Intelligence in Retail Market Application Insights

The US Artificial Intelligence in Retail Market, particularly within the Application segment, is characterized by robust growth and diversification of applications that enhance operational efficiencies and customer experiences. As retailers increasingly shift towards technology-driven solutions, various applications such as Customer Service, Inventory Management, Sales and Marketing, Fraud Detection, and Supply Chain Optimization play vital roles in transforming the retail landscape. In the realm of Customer Service, AI technologies such as chatbots and virtual assistants are becoming essential, allowing retailers to provide real-time support and personalized experiences, which significantly improve customer satisfaction and retention. Inventory Management stands out as another key area, where AI algorithms analyze sales patterns and optimize stock levels, minimizing overstock and stockouts, thus leading to cost reduction and increased profitability.

This segment is particularly important as supply chain disruptions remain a critical challenge for many retailers, emphasizing the need for accurate inventory forecasting. In Sales and Marketing, AI facilitates the analysis of consumer data to deliver targeted marketing campaigns and personalized recommendations, thereby increasing conversion rates and enhancing brand loyalty. Additionally, Fraud Detection is crucial in safeguarding retailers from losses due to fraudulent activities; sophisticated AI models analyze transaction data to identify unusual patterns, significantly reducing the risk of fraud and ensuring secure transactions.

Lastly, Supply Chain Optimization leverages AI to enhance logistics management, predict customer demand, and streamline processes, which ultimately leads to improved efficiency and reduced operational costs. The increasing integration of these AI applications in retail operations supports the ongoing digital transformation, driven by the need for retailers to stay competitive in an evolving marketplace. Overall, the Application segment represents a critical component of the US Artificial Intelligence in Retail Market, as its innovations address current challenges while paving the path for future opportunities.

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

Artificial Intelligence in Retail Market Deployment Mode Insights

The Deployment Mode segment of the US Artificial Intelligence in Retail Market plays a crucial role in shaping how retailers leverage AI technologies to enhance their operations. Cloud-Based solutions dominate the market due to their scalability, cost-effectiveness, and ease of integration with existing systems, allowing retailers to access advanced AI capabilities without heavy upfront investments. On-Premises deployment, although less common, remains significant for retailers that prioritize data security and compliance with industry regulations, enabling them to maintain control over their sensitive information.

Meanwhile, Hybrid deployment offers a balanced approach, combining the strengths of both cloud and on-premises models. This flexibility appeals to retailers seeking to optimize their IT environments while addressing specific operational needs. As retailers increasingly turn towards AI to improve customer experience and operational efficiency, the insights drawn from the Deployment Mode segment highlight the growing importance of adaptable, secure, and efficient technologies in the US Artificial Intelligence in Retail Market landscape.

Artificial Intelligence in Retail Market Technology Insights

The Technology segment within the US Artificial Intelligence in Retail Market reflects a dynamic landscape driven by advancements in various areas. Machine Learning plays a pivotal role by enabling retailers to analyze large volumes of data, optimizing inventory management, and enhancing customer experiences through personalized recommendations. Natural Language Processing facilitates better communication between brands and consumers, allowing for improved customer service through chatbots and virtual assistants, which can significantly increase engagement rates.

Computer Vision is instrumental in automating tasks such as inventory tracking and theft prevention, utilizing image recognition techniques to enhance operational efficiency on the sales floor. Robotic Process Automation streamlines repetitive tasks within retail operations, freeing up human employees for strategic activities that add greater value. Together, these technologies contribute to making the retail environment more efficient, customer-centric, and responsive to market trends, thereby reinforcing the crucial role of technology in shaping the future of retail in the US. The integration of these innovative technologies not only improves operational efficiencies but also supports the broader goals of driving sales growth and enhancing customer satisfaction.

Artificial Intelligence in Retail Market End Use Insights

The US Artificial Intelligence in Retail Market focuses significantly on End Use, comprising various components including E-commerce, Brick-and-Mortar Stores, and Wholesale and Distribution. E-commerce is rapidly transforming as it integrates advanced AI technologies to enhance personalization and streamline the shopping experience, which appeals to the growing number of online consumers in the United States. Brick-and-Mortar Stores are increasingly adopting AI-driven solutions for inventory management and customer engagement, making the in-store experience more efficient.

Meanwhile, Wholesale and Distribution leverages AI to optimize supply chain processes, ensuring timely product availability and reducing operational costs. The growth drivers for these End Use categories are linked to increasing competition, consumer expectations for seamless experiences, and the need for data-driven decision-making. Challenges include the integration of AI technologies with existing systems and the need for substantial investments. However, opportunities abound in harnessing AI for advanced analytics and improving customer service, solidifying the relevance of these segments in the ever-evolving landscape of the retail industry. Overall, the US Artificial Intelligence in Retail Market segmentation presents a landscape full of potential for innovation and growth across all End Use categories.

US Artificial Intelligence in Retail Market Key Players and Competitive Insights

The US Artificial Intelligence in Retail Market is experiencing a transformative phase characterized by rapid advancements in technology and shifting consumer preferences. Companies are increasingly leveraging artificial intelligence to enhance customer experiences, streamline operations, and optimize inventory management. The integration of AI facilitates personalized marketing, predictive analytics, and improved decision-making, which are essential for retailers aiming to thrive in a highly competitive environment. As the market evolves, businesses are differentiating themselves by employing AI to analyze data, improve supply chain efficiency, and engage customers dynamically. This competitive landscape is driven by innovation, as companies invest in research and development to create advanced AI solutions that meet the growing demands of retail enterprises. Within the landscape of the US Artificial Intelligence in Retail Market, SAP has established a solid position due to its comprehensive suite of cloud-based solutions tailored for the retail sector. The company's strengths lie in its ability to integrate AI with its existing enterprise resource planning and supply chain management offerings, creating seamless workflows for retailers. SAP's focus on real-time data analytics and customer engagement tools enables businesses to enhance their operations, improve forecasting accuracy, and deliver personalized shopping experiences. Moreover, SAP benefits from a robust partner ecosystem that extends its reach and capabilities within the retail landscape, allowing it to adapt quickly to emerging trends and customer needs.

Citi has also made significant strides in the US Artificial Intelligence in Retail Market, particularly in providing financial services that leverage AI to enhance customer insights and streamline operations. A key element of Citi's market presence includes offering data-driven solutions that assist retailers in understanding consumer behavior while improving risk management. Citi utilizes AI for personalized banking services and fraud detection, ensuring that retail partners receive intelligent and secure transactions. The company's strengths include its renowned financial expertise, extensive network, and commitment to innovation through continuous investments in technology. Citi has also engaged in strategic mergers and acquisitions to fortify its capabilities in AI, allowing it to enhance its product offerings and extend its influence in the retail sector, thereby solidifying its competitive position in the US market.

Key Companies in the US Artificial Intelligence in Retail Market Include

• SAP


• Citi


• Oracle


• Wayfair


• Square


• Alibaba


• IBM


• Microsoft


• Nvidia


• Walgreens


• Zebra Technologies


• Shopify


• Google


• Salesforce


• Amazon

US Artificial Intelligence in Retail Market Industry Developments

The US Artificial Intelligence in Retail Market has recently experienced significant developments, particularly with companies such as Amazon and Walmart investing heavily in AI-driven innovations to enhance customer experiences and streamline operations. In September 2023, SAP announced its latest AI-enabled solution aimed at optimizing inventory management, marking a strong move toward integrating advanced analytics in retail processes. Current affairs highlight a rising emphasis on personalized shopping experiences, with major retailers like Wayfair leveraging AI to improve product recommendations. Notably, in August 2023, Oracle acquired a small AI start-up to bolster its cloud services tailored for retail, expanding its capabilities in predictive analytics. The market has seen a boost in valuation; for instance, IBM's recent initiatives in AI solutions for retail have greatly enhanced its competitive positioning. Over the past few years, the growth in AI adoption has pushed companies like Microsoft and Google to expand their offerings, with numerous partnerships forming to innovate in areas such as consumer behavior analysis. This evolving landscape reflects the ongoing integration of AI technologies to drive efficiency, personalization, and improved decision-making in the US retail sector.

US 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

Report Attribute/Metric Source:	Details
MARKET SIZE 2018	2.27(USD Billion)
MARKET SIZE 2024	2.8(USD Billion)
MARKET SIZE 2035	12.0(USD Billion)
COMPOUND ANNUAL GROWTH RATE (CAGR)	14.145% (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	SAP, Citi, Oracle, Wayfair, Square, Alibaba, IBM, Microsoft, Nvidia, Walgreens, Zebra Technologies, Shopify, Google, Salesforce, Amazon
SEGMENTS COVERED	Application, Deployment Mode, Technology, End Use
KEY MARKET OPPORTUNITIES	Personalized customer experiences, Inventory optimization solutions, AI-driven pricing strategies, Enhanced supply chain management, Fraud detection systems
KEY MARKET DYNAMICS	Rapid technology adoption, Personalized shopping experiences, Inventory management optimization, Enhanced customer insights, Competitive advantage through automation
COUNTRIES COVERED	US