The global Artificial Intelligence in Retail market size was reached at USD 8.1 billion in 2022 and it is expected to hit around USD 51.4 billion by 2030, growing at a CAGR of 30.67% from 2022 to 2030.
Global Artificial Intelligence in Retail Market: Overview
Global artificial intelligence in the retail market refers to the application of advanced technology and algorithms to automate and enhance retail operations. AI technology in retail can be used to automate customer service, optimize inventory management, personalize shopping experiences, and improve supply chain efficiency.
The market for AI in retail is driven by several factors, including the increasing demand for a personalized shopping experience, the need for improved operational efficiency, and the growing adoption of advanced technologies across the retail industry.
The retail industry is experiencing rapid growth in e-commerce, and this has created opportunities for AI applications in areas such as product recommendations, personalized shopping experiences, and fraud detection. AI is also being used to optimize supply chain operations, allowing retailers to better manage inventory and reduce costs.
Key Market Insights:
- The market for AI in retail is driven by several factors, including the increasing demand for a personalized shopping experience, the need for improved operational efficiency, and the growing adoption of advanced technologies across the retail industry.
- Based on Component, the solution segment is dominating the market and accounted for more than 70% revenue share in 2021.
- By Technology, the machine learning segment accounted for the largest share of more than 31.95% in 2021 and is expected to register high CAGR.
- Based on Application, Customer relationship management (CRM) segment dominated the market with a revenue share of more than 20% in 2021.
- In 2021, North America artificial intelligence in the retail market accounts the highest industry share of more than 40%.
Global Artificial Intelligence in Retail Market: Covid-19 Impact
The COVID-19 pandemic has had a significant impact on global AI in the tail market. The pandemic has led to widespread store closures and reduced foot traffic, which has accelerated the shift to online shopping. As a result, retailers have had to adapt to new consumer behaviors and implement new technologies to meet the changing demands of their customers.
The pandemic has also increased the demand for contactless shopping experiences, and AI has played a key role in enabling this. Computer vision technology, for example, can be used to enable contactless checkout and reduce the need for physical interaction with store associates.
Despite the challenges posed by the pandemic, the AI in retail market is expected to continue to grow. The pandemic has accelerated the adoption of AI in retail, and many retailers are expected to continue to invest in the technology to stay competitive in a rapidly changing retail landscape.
However, the pandemic has also led to economic uncertainty, and many retailers may be hesitant to invest in new technologies in the short term. This could lead to a slowdown in the adoption of AI in retail, particularly among smaller retailers. Overall, the pandemic has accelerated the adoption of AI in the retail industry and is expected to have a positive impact on the market's growth in the long term.
Global Artificial Intelligence in Retail Market Dynamics:
Growth Drivers
Personalization:
AI is increasingly being used to provide personalized shopping experiences to customers. By analyzing customer data, including purchase history and online behavior, AI algorithms can make personalized product recommendations and provide tailored shopping experiences. This can help retailers to build customer loyalty and increase sales.
Operational Efficiency:
AI can help retailers to optimize their supply chain and inventory management processes. By analyzing sales data, retailers can predict demand and adjust their inventory levels accordingly. AI can also be used to automate tasks such as order processing and logistics management, reducing the need for manual intervention and increasing efficiency.
Customer Service:
AI-powered chatbots and virtual assistants can provide 24/7 customer service, reducing the need for human customer service representatives. These chatbots can handle simple customer inquiries and provide quick responses, freeing up human customer service representatives to focus on more complex issues.
Fraud Detection:
AI can be used to detect and prevent fraud in retail transactions. Machine learning algorithms can analyze patterns in transaction data to identify potential fraudulent activity, helping retailers to prevent losses due to fraud.
E-commerce Growth:
The growth of e-commerce has created opportunities for AI applications in retail. AI-powered visual search and recommendation systems can help customers to find products more easily, while chatbots and virtual assistants can provide support and guidance throughout the shopping process.
Restraining factors
High Costs:
Implementing AI technology in retail can be expensive, particularly for small and medium-sized retailers. The cost of AI systems, as well as the need for specialized expertise to implement and maintain them, can be a barrier to adoption.
Privacy Concerns:
The use of AI in retail can raise privacy concerns, particularly when it comes to the collection and use of customer data. Customers may be hesitant to share personal information with retailers, particularly if they do not fully understand how that information will be used.
Limited Availability of Skilled Professionals:
The implementation of AI in retail requires skilled professionals, including data scientists and AI specialists. The availability of such professionals can be limited, particularly in certain regions, which could slow the adoption of AI in retail.
Integration Challenges:
Integrating AI technology with existing retail systems can be challenging, particularly for retailers with complex legacy systems. This can result in additional costs and delays in implementation.
Opportunities
The global artificial intelligence (AI) in retail market presents a significant opportunity for businesses looking to leverage advanced technology to enhance their operations and better serve customers. AI is being used in various retail applications, such as personalized marketing, supply chain optimization, customer service, and inventory management. With the rise of e-commerce and increasing competition in the retail industry, businesses are turning to AI to gain a competitive advantage and improve their bottom line. The market is expected to continue to grow rapidly as businesses adopt AI technologies and incorporate them into their existing systems.
Challenges
Cybersecurity:
The use of AI in retail generates vast amounts of sensitive data, which can be vulnerable to cyber threats. Retailers need to ensure that they have robust cybersecurity measures in place to protect against data breaches and cyber-attacks.
Global Artificial Intelligence in Retail Market: Scope and Segment
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Attribute
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Details
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Market Size in 2022
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USD 8.1 Billion
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Estimated Market Size in 2030
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USD 51.4 Billion
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CAGR Growth Rate
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30.67% CAGR
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Base Year
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2021
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Forecast Years
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2022-2030
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Segment covered
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by Component, by Type, by Technology, by Application
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Regions Covered
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- North America
- Europe
- Asia Pacific
- Latin America
- The Middle East & Africa
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Companies Covered
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- IBM Corporation
- Microsoft
- SAP SE
- Intel
- NVIDIA
- Google LLC
- Sentient Technology
- ViSenze
- Amazon Web Services
- Oracle
- Salesforce Inc.
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Report Coverage
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Revenue Forecast, Company Share, Competitive Landscape, Growth Factors, Restraints, Opportunities, Value Chain Analysis, Porter’s Five Forces Analysis, Patent Analysis, Market Attractiveness Analysis by Segments
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Global Artificial Intelligence in Retail Market: Segmentation
By component, the market is segmented into solutions and services. The solutions segment accounted for more than 70% of the total share in 2021. Solutions considered include smart stores, digital commerce, intelligent customer insights, smart delivery, intelligent supply chain, and more. In the retail industry, the increasing challenges in managing various retail operations will drive new and innovative automated solutions. The services segment is projected to see strong growth during the projected period.
By type, the market is segmented into offline and online. The Offline segment held the largest revenue share and is predicted to maintain its dominance during the forecast period. Due to the increasing popularity of virtual and online shopping, online business is expected to grow rapidly. Artificial intelligence is being implemented by retailers to improve their online customer service capabilities. Online AI in retail, on the other hand, involves the use of AI technology in e-commerce platforms to provide personalized product recommendations, chatbots for customer service, and fraud detection.
By application, the AI in retail market is segmented into customer relationship management (CRM), inventory management, supply chain & logistics, product optimization, payment & pricing analytics, in-store navigation, virtual assistant (VA), and others. The Customer relationship management (CRM) segment held a revenue share of more than 20% in 2021. Strong demand for customer retention and customer service will boost the CRM segment's prominence. Retail vendors can build strong relationships with their customers by utilizing AI-powered search engines, virtual assistants, chatbots, and other solutions. The retail industry has ample opportunities to explore virtual assistant technologies, including streamlining supply chains, invoicing, ordering inventory, and bookkeeping. Therefore, virtual assistance is projected to experience speedy growth in the upcoming period.
By technology, the market is segmented into Computer Vision, Machine Learning (ML), Natural Language Processing, Swarm Intelligence, Others.the Machine Learning segment acquired the major revenue share of the market. ML technology's greater precision and flexibility contribute to the segment’s growth. Natural language processing is projected to achieve rapid growth during the forecast period.
Global Artificial Intelligence in Retail Market: Regional Insights
North America is expected to dominate AI in the retail market, owing to the presence of several large retailers that have adopted AI-powered systems. The region also has a well-established technology infrastructure and a high level of AI expertise. The US is one of the most advanced countries in terms of AI adoption, which drives the growth of the market in the region.
Europe is expected to see significant growth in the AI the n retail market, driven by the adoption of AI-powered systems by retailers in the region. The European Union's General Data Protection Regulation (GDPR) has also created a regulatory framework that supports the use of AI in retail while protecting consumer data.
The Asia-Pacific region is expected to see fastest growth in AI the in-retail market, owing to the high penetration of smartphones and the increasing adoption of e-commerce platforms. China, Japan, and South Korea are some of the key countries driving the growth of the market in the region. The retail industry in Asia-Pacific is also undergoing a rapid transformation, with the adoption of technologies such as AI and machine learning to improve customer experience and operational efficiency.
Competitive Analysis
Global Artificial Intelligence in Retail market key players include IBM Corporation, Microsoft, SAP SE, Intel, NVIDIA, Google LLC, Sentient Technology, ViSenze, Amazon Web Services, Oracle, Salesforce Inc.
Segments covered in the Report:
By Component
By Type
By Technology
- Computer Vision
- Machine Learning
- Natural Language Processing
- Swarm Intelligence
- Others
By Application
- Customer Relationship Management (CRM)
- Inventory Management
- Supply Chain and Logistics
- Product Optimization
- Payment and Pricing Analytics
- In-Store Navigation
- Virtual Assistant
- Others
By Geography
- North America
- Europe
- Asia-Pacific
- Latin America
- Middle East & Africa (MEA)
Frequently Asked Questions (FAQs):
What is the size of Artificial Intelligence in Retail market?
The global Artificial Intelligence in Retail market size was worth USD 8.1 Billion in 2022 and is expected to grow to USD 51.4 Billion by 2030
What will be the CAGR of global Artificial Intelligence in Retail market?
The Artificial Intelligence in Retail market is expected to drive growth at a CAGR of 30.67% from 2022 to 2030.
Who are the major players operating in the Artificial Intelligence in Retail market?
IBM Corporation, Microsoft, SAP SE, Intel, NVIDIA, Google LLC, Sentient Technology, ViSenze, Amazon Web Services, Oracle, Salesforce Inc. are the major players operating in the Artificial Intelligence in Retail market
Which region will lead the global Artificial Intelligence in Retail market?
North America dominated the global Artificial Intelligence in Retail market in 2021.