Artificial intelligence (AI) is rapidly transforming the retail industry, helping retailers to improve efficiency, enhance customer experiences, and boost profits. The global AI in retail market is expected to grow from USD 5.79 billion in 2022 to USD 20.46 billion by 2028 at a CAGR of 23.20% during the forecast period.

Market Dynamics

The AI in retail market is driven by a number of factors, including:

  • The increasing adoption of multichannel or omnichannel retailing strategies.
  • The growing enterprise demands for streamlining the business process.
  • The untapped opportunities to improve sales efficiency.
  • The increasing need to enhance the end-user experience to further bolster the industry growth.

Key Trends

Some of the key trends in the AI in retail market include:

  • Personalized customer experiences: AI can be used to collect and analyze customer data to create personalized shopping experiences. For example, AI-powered chatbots can answer customer questions, recommend products, and provide personalized offers.
  • Automated inventory management: AI can be used to track inventory levels and predict demand. This can help retailers optimize their inventory, reduce waste, and avoid stockouts.
  • Fraud detection: AI can be used to detect fraudulent transactions. This can help retailers protect themselves from financial losses.
  • Real-time pricing: AI can be used to set real-time prices for products based on factors such as demand, competition, and inventory levels. This can help retailers maximize profits.
  • Visual search: AI can be used to enable visual search, which allows customers to find products by image. This can be a more convenient way for customers to shop, especially for those who are visually impaired.
  • Augmented reality (AR) and virtual reality (VR): AI can be used to power AR and VR experiences in retail. This can allow customers to try on clothes, see how furniture would look in their home, or even take a virtual tour of a store.

Market Segmentation

The AI in retail market is segmented into the following categories:

  • By Deployment Type: Cloud and on-premise
  • By Application Type: Supply chain and logistics, product optimization, in-store navigation, on-premise payment and pricing analytics, inventory management, and customer relationship management (CRM)
  • By Technology Type: Machine learning, natural language processing, chatbots, image and video analytics, and swarm intelligence
  • By Region: North America, Europe, Asia-Pacific, and the Rest of the World

Regional Insights

North America is the largest market for AI in retail, accounting for more than 35% of the global market revenue in 2022. The region is home to a number of major AI players, such as Google, Microsoft, and IBM. It is also a leader in the adoption of new technologies, such as Big Data and AI.

The Asia-Pacific market is expected to grow at the fastest CAGR during the forecast period. The region is witnessing a rapid growth in e-commerce and online retail, which is driving the demand for AI-powered solutions.

Key Players

Some of the key players operating in the AI in retail market include:

  • Oracle Corporation (US)
  • Salesforce.com Inc. (US)
  • IBM Corporation (US)
  • Microsoft Corporation (US)
  • Google LLC (US)
  • Amazon Web Services Inc. (US)
  • SAP SE (Germany)
  • ViSenze Pte Ltd (Singapore)
  • BloomReach, Inc. (US)
  • Symphony RetailAI (US)

Additional Insights

Here are some additional insights into the AI in retail market:

  • AI is being used by retailers to develop new and innovative shopping experiences for customers. For example, some retailers are using AI to power virtual dressing rooms and product configurators.
  • AI is also being used by retailers to improve their supply chain management. For example, AI can be used to predict demand, optimize inventory levels, and route shipments more efficiently.
  • AI is also being used by retailers to detect and prevent fraud. For example, AI can be used to identify fraudulent transactions and patterns of suspicious behavior.

Overall, AI is transforming the retail industry in a number of ways

Conclusion

The AI in retail market is poised for significant growth in the coming years. Retailers are increasingly adopting AI-powered solutions to improve efficiency, enhance customer experiences, and boost profits. The market is expected to be driven by the growing adoption of multichannel or omnichannel retailing strategies, the growing enterprise demands for streamlining the business process, the untapped opportunities to improve sales efficiency, and the increasing need to enhance the end-user experience.