Global Artificial Intelligence In Retail Market - 2023-2030

Overview:

Global Artificial Intelligence In Retail Market reached US$ 5.5 billion in 2022 and is expected to reach US$ 55.4 billion by 2030, growing with a CAGR of 34.2% during the forecast period 2023-2030.

AI enables retailers to offer personalized shopping experiences, including product recommendations, chatbots for customer service and virtual try-ons and this enhances customer satisfaction and loyalty. AI-powered systems can optimize supply chain management, inventory control and demand forecasting, which leads to cost savings and more efficient operations. Retailers can harness the power of AI to analyze huge volumes of data, gaining insights into customer behavior, market trends and competitive intelligence.

For instance, on 25 September 2023, Amazon is partnering with AI startup Anthropic in a $4 billion investment to develop generative AI models. This partnership aligns with Amazon's growing focus on AI, particularly in its consumer-facing devices and services. Initially, the collaboration will support Anthropic's work on generative AI models using Amazon's cloud services and microchips. These models will be available through Amazon Web Services' Amazon Bedrock platform.

Asia-Pacific is among the growing regions in the global artificial intelligence in retail market covering more than 3/5th of the market and the region is characterized by a large and growing population, along with increasing urbanization and this results in a higher consumer base and greater demand for retail services, driving the need for AI-powered solutions to meet these demands efficiently. The region generates vast amounts of data, both structured and unstructured. AI thrives on data and retailers in Asia-Pacific leverage AI to analyze customer behavior, preferences and market trends to make data-driven decisions.

Dynamics:

Adoption of AI in E-Commerce Industry

AI algorithms analyze customer data to provide personalized product recommendations and shopping experiences and this enhances customer satisfaction and increases sales. Chatbots and virtual assistants powered by AI provide 24/7 customer support, improving response times and customer engagement. AI helps retailers optimize their inventory by predicting demand patterns, reducing overstock and understock situations and minimizing carrying costs.

For instance, on 31 July 2023, BigCommerce launched new AI-powered features on its e-commerce platform, due to its partnership with Google Cloud and these AI tools will help enterprise merchants improve operational efficiency, enhance customer experiences and boost sales. Some of the key AI features include AI-powered product descriptions, highly personalized storefronts and AI-driven data analytics to gain deeper insights into business performance.

Increasing Use of AI-Powered ChatBots that Improve Customer Experience Drives the Market

Chatbots can provide quick and instant responses to customer queries, reducing wait times and improving the overall customer experience and they can handle a large volume of customer inquiries simultaneously, making them scalable for businesses with high customer interaction rates. Chatbots provide consistent responses and information to all customers, ensuring that everyone receives the same level of service. Advanced chatbots can use customer data to personalize interactions, providing tailored recommendations and solutions.

For instance, on 12 July 2023 Ski and sporting goods brand Evo plans to launch a customer service chatbot, powered by ChatGPT, in time for the holiday season and this AI-driven chatbot can handle light-touch customer service inquiries and may reduce the brand's need to hire additional agents during the busy winter season. Evo typically doubles its customer service employees during this period.

AI-Powered Collaborations Revolutionize Retail Experiences

Collaborations allow retailers to combine their data with AI companies' expertise in data analysis and this enables retailers to gain deeper insights into customer behavior, preferences and trends, leading to more informed business decisions. AI-driven retail collaborations facilitate the creation of highly personalized shopping experiences. Retailers can partner with AI companies to develop recommendation engines that suggest products based on individual customer profiles and past interactions.

For instance, on 6 April 2022, Unilever partnered with Perch, a retail marketing platform, to launch an interactive in-store product engagement platform at Giant Food supermarkets in the Washington DC area and this platform features digital screens that automatically respond to shoppers' interactions with products by providing videos and information about those products, all without the need for QR codes, additional apps or screen touching.

Data Privacy and Inaccurate Data

AI relies on huge volumes of customer data for personalization and insights. However, there are growing concerns about data privacy and how retailers handle and protect sensitive customer information. Compliance with data protection regulations, such as GDPR, is essential but challenging. Implementing AI technologies, including infrastructure, software and staff training, can be expensive for retailers, especially smaller businesses. The initial investment required for AI adoption can be a barrier.

AI systems depend on high-quality data. Inaccurate or incomplete data can lead to erroneous predictions and recommendations. Integrating data from various sources within a retail organization can also be complex. AI requires skilled data scientists, machine learning engineers and AI specialists to develop and maintain systems and there is a shortage of professionals with AI expertise, making it challenging for retailers to build and manage AI teams.

Segment Analysis:

The global artificial intelligence in retail market is segmented based on offerings, function, deployment type, application, technology and region.

Services Provided to Customers Boost the Market

AI enables retailers to analyze huge volumes of customer data to create personalized shopping experiences and this personalization includes product recommendations, targeted marketing and customized promotions, all of which enhance the overall shopping experience and drive sales. AI helps retailers optimize inventory levels by predicting demand, reducing overstock and understock situations and improving supply chain efficiency, this leads to cost savings and ensures that products are available when customers want them.

For instance, on 10 November 2022, Amazon introduced Sparrow, an intelligent robotic system designed to enhance the fulfillment process by handling individual products before they are packaged. Over the past decade, Amazon has invested heavily in robotics and advanced technology to automate various aspects of its operations. Sparrow represents a critical advancement in the handling of individual products within Amazon's vast inventory.

Geographical Penetration:

Personalized Recommendation Enhance Customer Engagement Boosts the Market

North America is dominating the global artificial intelligence in retail market and retailers in the region are increasingly using AI to improve the customer shopping experience. AI-powered chatbots, virtual shopping assistants and personalized recommendations enhance customer engagement and satisfaction. North American consumers expect personalized experiences and AI helps retailers analyze vast amounts of customer data to provide tailored product recommendations, marketing messages and pricing strategies.

For instance, on 16 August 2023, a survey conducted by Honeywell revealed that around 60% of retailers plan to adopt artificial intelligence, machine learning and computer vision technologies in the next year to enhance the shopping experience, both in physical stores and online. The survey involved 1,000 retail directors globally and found that 48% of respondents believe AI, ML and Computer Vision(CV) will have a significant impact on the retail industry in the next three to five years.

Competitive Landscape

The major global players in the market include: Amazon.com, Inc., IBM Corporation, Intel Corporation, Google LLC, Salesforce.com, Inc., SAP SE, Talkdesk, Inc., Microsoft Corporation, Nvidia Corporation and Oracle Corporation.

COVID-19 Impact Analysis

Lockdowns and social distancing measures in place, there was a surge in online shopping. Retailers turned to AI-powered recommendation engines, chatbots and virtual shopping assistants to enhance the online shopping experience and manage increased website traffic. COVID-19 disrupted supply chains globally. AI-powered predictive analytics became crucial for retailers to predict and manage supply chain disruptions, optimize inventory levels and ensure products were available when and where customers needed them.

The pandemic caused fluctuations in demand and supply. AI was used to adjust pricing strategies in real-time, helping retailers avoid overstocking and maintain profitability. Retailers implemented AI-driven technologies like self-checkout kiosks and touchless payment options to minimize physical contact between customers and store employees. The unpredictable nature of the pandemic made demand forecasting more challenging. AI models were adapted to account for sudden shifts in consumer behavior and preferences.

AI analytics helped retailers understand changing customer behaviors during the pandemic and this information was used to tailor marketing campaigns, optimize product offerings and enhance customer engagement. AI-powered solutions, such as thermal imaging cameras and facial recognition systems, were deployed to enforce health and safety protocols in stores and distribution centers.

AI Impact

AI-powered recommendation systems analyze customer data to provide personalized product recommendations and this enhances the shopping experience and increases the likelihood of customers making purchases. AI algorithms can optimize inventory levels by predicting demand, reducing overstock and stockouts and this results in cost savings and improved customer satisfaction.

Retailers use AI-driven chatbots and virtual assistants to provide real-time customer support, answer queries and assist with product searches and this reduces the workload on human customer service agents. AI can analyze market conditions, competitor pricing and customer behavior to adjust product prices in real-time for maximum profitability. Also, AI-powered video analytics and image recognition systems boost the market.

For instance, on 13 September 2023, According to Amazon, amazon leveraged generative artificial intelligence to enhance the product listing creation and management process for sellers and these AI capabilities simplified the process of creating product titles, descriptions and listing details, making it faster and easier for sellers to create and enrich their product listings and this approach streamlines the listing creation process, reduces the need for manual data entry and ensures that customers receive more comprehensive, consistent and engaging product information.

Russia- Ukraine War Impact

The conflict has disrupted supply chain management, especially in the technology sector. Many AI-related components, such as semiconductors and hardware, are manufactured in various parts of the world. Disruptions in the supply chain can lead to shortages or increased costs for AI technology, impacting its adoption in retail. Geopolitical conflicts can contribute to economic uncertainty, which affects consumer behavior. Retailers may become more cautious in their investments, including AI initiatives, during uncertain times.

The ripple effects of geopolitical tensions can impact the global economy, leading to fluctuations in currency exchange rates, trade restrictions and changes in consumer spending patterns and these factors can influence the pace and scale of AI adoption in retail. Retailers rely on AI for customer data analysis, personalization and cybersecurity. Geopolitical tensions can lead to increased concerns about data security and privacy, prompting retailers to reassess their AI strategies and data handling practices.

By Offerings

• Services
• Solutions

By Function

• Operation-Focused
• Customer-Facing

By Deployment Type

• Cloud
• On-Premise

By Technology

• Computer Vision
• Machine Learning
• Natural Language Processing
• Others

By Application

• Predictive Analytics
• In-Store Visual Monitoring & Surveillance
• Customer Relationship Management
• Market Forecasting
• Others

By Region

• North America
  • U.S.
  • Canada
  • Mexico

• Europe
  • Germany
  • UK
  • France
  • Italy
  • Russia
  • Rest of Europe

• South America
  • Brazil
  • Argentina
  • Rest of South America

• Asia-Pacific
  • China
  • India
  • Japan
  • Australia
  • Rest of Asia-Pacific

• Middle East and Africa

Key Developments

• In October 2021, AT&T and H2O.ai collaborated together that resulted in the development of an AI feature store that allows the organization and recycle data and machine learning engineering skills. Data scientists and developers employ the same features that AI features used for storage and distribution when creating AI models.
• In January 2023, EY introduced the EY Retail Intelligence solution which leveraging the Microsoft Cloud and Cloud for Retail, that leads to enhance consumers' shopping experiences. As the retail landscape undergoes digital transformation, traditional retailers face challenges such as consumers searching for the best prices across various channels.
• In November 2022, Fractal, a global provider of AI and advanced analytics solutions, launched Asper.ai, an interconnected AI solution designed for consumer goods, manufacturing and retail. Asper.ai aims to address the fragmentation within the AI ecosystem in these sectors by offering an end-to-end AI product that unifies demand planning, inventory optimization, strategic pricing and promotion

Why Purchase the Report?

• To visualize the global artificial intelligence in retail market segmentation based on offerings, function, deployment type, application, technology and region, as well as understand key commercial assets and players.
• Identify commercial opportunities by analyzing trends and co-development.
• Excel data sheet with numerous data points of artificial intelligence in retail market-level with all segments.
• PDF report consists of a comprehensive analysis after exhaustive qualitative interviews and an in-depth study.
• Product mapping available as excel consisting of key products of all the major players.

The global artificial intelligence in retail market report would provide approximately 77 tables, 77 figures and 197 Pages.

Target Audience 2023

• Manufacturers/ Buyers
• Industry Investors/Investment Bankers
• Research Professionals
• Emerging Companies