Artificial Intelligence in Retail Market Size, Share, Growth Analysis, By Type, By Technology, By Solution, By Service, By Application, By Deployment Mode, By Region - Industry Forecast 2024-2031

Artificial Intelligence (AI) in the Retail Market is valued at USD 5.59 Billion in 2022 and is expected to grow from USD 7.42 Billion in 2023 to reach USD 71.23 Billion by 2031, at a CAGR of 32.68% during the forecast period (2024-2031).

The global artificial intelligence (AI) in retail market is undergoing a profound transformation, fundamentally changing internal business operations and customer engagement. The primary goal of this emerging market is to transform retailers into technology-driven digital giants by leveraging innovative solutions to automate processes and deliver personalized services on a large scale. The increasing demand for customized shopping experiences, driven by consumers' desire for tailored suggestions and seamless browsing both online and offline, is pushing retailers to adopt AI-powered solutions. These solutions enable real-time data analysis to offer personalized recommendations, insights, and promotions based on individual preferences and behaviours. With the rise of e-commerce and the validation of omnichannel retailing, the necessity of AI technologies has become evident in enhancing e-stores, optimizing supply chain logistics, and delivering exceptional customer experiences. While AI has demonstrated significant potential in the retail sector, various inhibiting factors continue to hinder its widespread adoption.

Top-down and bottom-up approaches were used to estimate and validate the size of the Artificial Intelligence (AI) in the Retail Market and to estimate the size of various other dependent submarkets. The research methodology used to estimate the market size includes the following details: The key players in the market were identified through secondary research, and their market shares in the respective regions were determined through primary and secondary research. This entire procedure includes the study of the annual and financial reports of the top market players and extensive interviews for key insights from industry leaders such as CEOs, VPs, directors, and marketing executives. All percentage shares split, and breakdowns were determined using secondary sources and verified through Primary sources. All possible parameters that affect the markets covered in this research study have been accounted for, viewed in extensive detail, verified through primary research, and analyzed to get the final quantitative and qualitative data.

Artificial Intelligence (AI) in the Retail Market Segmental Analysis

The global artificial intelligence in retail market is segmented by type, technology, solution, service, deployment mode, application, and region. By type, it includes online retail and offline retail. The technology segment comprises machine learning and deep learning (facial recognition, emotion detection), natural language processing, chatbots, image and video analytics, and swarm intelligence. Solutions are categorized into product recommendation and planning, customer relationship management, visual search, virtual assistant, chatbots, price optimization, payment services management, supply chain management and demand planning, and others. Services are divided into professional services and managed services. Deployment modes are split between cloud and on-premises. Applications include predictive merchandising, market forecasting, in-store visual monitoring and surveillance, location-based marketing, and others (real-time pricing and incentives, real-time product targeting). Geographically, the market is segmented into North America, Europe, Asia-Pacific, Latin America, and the Middle East & Africa.

Drivers of the Artificial Intelligence (AI) in the Retail Market

AI-based chatbot recruiting is rapidly gaining traction in the retail market due to its significant enhancement of customer service quality. These chatbots provide tailored and purposeful responses, encouraging customer loyalty. For instance, upliance.ai integrated ChatGPT in May 2023, with DelishUp, a smart cooking companion, automating the cooking process for a seamless experience. The company plans to expand into the home appliances sector, solidifying its presence in AI across outdoor markets. Leveraging NLP and ML technologies, AI chatbots have become more human-like, enabling companies to gather real-time data on customer preferences. Additionally, these chatbots can understand customer attitudes, emotions, and behavior patterns, improving their responsiveness and relationship-building capabilities.

Restraints in the Artificial Intelligence (AI) in the Retail Market

Well-known retail brands constantly seek the latest technologies to enhance customer engagement, but numerous factors can limit growth in developing markets. Major retailers like Walmart have likely adopted artificial intelligence (AI) to manage both in-store and online platforms. Before the emergence of blockchain technology, SMEs and startups faced significant barriers to adopting modern technology, primarily due to a lack of necessary infrastructure and technical skills. According to IBM's cloud-data service, 37% of practitioners believe that the scarcity of AI expertise is a major obstacle to implementing these technologies.

Market Trends of the Artificial Intelligence (AI) in the Retail Market

The e-commerce and online retail markets are witnessing a surge in demand as consumers increasingly utilize innovative methods for product descriptions, such as images, videos, and voice-assisted searches via mobile internet and smartphones. AI in visual search has become more effective by leveraging data collection and data mining. AI-powered shopping apps (visual search engines) utilize advanced AI features to analyze, track, and predict emerging shopping trends, thereby enhancing the overall shopping experience and increasing consumer engagement.