AI in Retail Market Size to Reach USD 64.8 Billion by 2032 growing at 9.6% CAGR - Exclusive Report by Acumen Research and Consulting

Author: Acumen Research and Consulting

AI in Retail Market, valued at USD 26.3 Billion in 2022, is poised to exceed USD 64.8 Billion by 2032, indicating a projected CAGR of 9.6%

AI in the retail business has seen substantial development and transformation, with technology playing a critical role in transforming the sector. Retailers are rapidly using AI technologies to improve consumer experiences, streamline operations, and remain competitive in a changing market. AI-powered customization, recommendation engines, and virtual assistants are being utilized to offer bespoke and frictionless shopping experiences, hence improving consumer loyalty and revenues. Furthermore, AI has an influence on inventory management, price optimization, and supply chain efficiency, enabling retailers to enhance decision-making and resource allocation. The use of AI-powered technologies such as visual search, augmented reality, and robots is also transforming the physical and digital retail environments, providing creative solutions for consumer engagement and operational efficiency. While the sector offers significant prospects, retailers must consider data privacy concerns, upfront implementation costs, and the need for qualified individuals as they traverse the AI environment.

As AI in the retail sector evolves, continuing themes include the implementation of contactless retail solutions, the use of social media analytics for market insights, and the creation of cashier-less shops. The industry's future trajectory will most certainly be determined by advances in AI capabilities, the integration of emerging technologies, and a sustained emphasis on providing better and tailored consumer experiences across multiple retail channels.

Artificial Intelligence in Retail Market

AI in Retail Market Statistics

  • The global AI in retail market revenue reached USD 26.3 billion in 2022
  • AI in retail market anticipated CAGR is over 9.6% from 2023 to 2032
  • North America dominated in 2022 with a substantial 39% market share
  • The Asia-Pacific region is expected to grow significantly, with an anticipated CAGR of 40% from 2023 to 2032
  • The solution sub-segment led in 2022, capturing approximately 71% market share among components
  • The omnichannel application segment recorded noteworthy revenue in the artificial intelligence in retail market accounting US$ 2.5 billion in 2022
  • A key AI in retail market trend in the increased adoption of AI-driven contactless retail solutions

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AI in Retail Market Dynamics

Rising Demand for Data-Driven Personalization in Retail Experiences Fuels the AI in Retail Market Value

One of the most noteworthy trends pushing AI in retail is the growing desire for data-driven customization to improve consumer experiences. Retailers use artificial intelligence (AI) to analyze massive volumes of client data, such as purchase history, browsing behavior, and preferences, in order to provide highly tailored and targeted shopping experiences. AI systems can accurately forecast consumer preferences using advanced algorithms and machine learning models, resulting in tailored product suggestions, individualized marketing messages, and customized promotions.

The emphasis on data-driven customization stems from a desire to provide more engaging and relevant interactions with customers, resulting in increased customer satisfaction and loyalty. As consumers want more tailored experiences, merchants are recognizing the importance of AI-powered solutions in achieving those expectations. The ability to deliver personalized suggestions not only enhances the whole shopping experience, but it also helps companies achieve greater conversion rates and revenues. This trend emphasizes the critical role of AI in assisting retailers in harnessing the power of data analytics to establish more focused and meaningful interactions with their consumers in an ever-changing retail market.

Growing Adoption of AI-Powered Virtual Assistants for Improved Customer Engagement Offers Significant AI in Retail Market Opportunity

The rising use of AI-powered virtual assistants provides a big opportunity in the artificial intelligence (AI) retail market, as businesses understand the potential for increased consumer engagement and service efficiency. Virtual assistants, which are backed by AI and natural language processing skills, allow merchants to provide better consumer experiences across several touchpoints, including web platforms and mobile applications.

AI-powered virtual assistants in retail may help customers navigate product catalogs, answer questions, provide real-time support, and even streamline the shopping process. These virtual assistants can comprehend and reply to client inquiries in a conversational manner, resulting in a more customized and smooth shopping experience. Furthermore, they may be used with other AI technologies, such as recommendation engines, to provide personalized product recommendations based on user preferences and historical behavior.

AI-powered virtual assistants have benefits beyond consumer engagement, including as operational efficiency, since they can undertake regular and repetitive activities, freeing up human resources for more difficult and strategic jobs. The growing desire for better customer service, along with developments in natural language processing and AI capabilities, makes AI-powered virtual assistants an important tool for shops looking to stay competitive and satisfy the changing expectations of today's tech-savvy consumers. As a result, the use of these virtual assistants is a notable trend in the AI retail business, with the potential for future development and innovation.

AI in Retail Market Segmentation

The global market for AI in retail has been segmented into component, technology, sales channel, application, and region.

  • The product segment is bifurcated into solution and service
  • The class segment is split into chatbots, image and video analytics, machine learning, natural language processing, and swarm intelligence
  • Sales channel segment includes brick and mortar, pure-play online retailers, and omnichannel
  • Customer relationship management (CRM), inventory management, in-store navigation, payment and pricing analytics, product optimization, supply chain and logistics, and virtual assistant are the application among artificial intelligence in retail market
  • The AI in Retail market is geographically segmented into North America (NA), Europe (EU), Asia-Pacific (APAC), the Middle East and Africa (MEA), and Latin America (LA)

Artificial Intelligence in Retail Market Regional Outlook

The North American area, notably the United States, has been a leading adoption of AI technology in retail. Major retailers in the United States have made substantial investments in artificial intelligence-driven solutions for consumer customization, inventory management, and supply chain optimization. The goal has been to improve the entire customer experience and operational efficiency.

European retailers have also adopted AI technology, with an emphasis on improving consumer interaction and streamlining corporate procedures. The application of AI in targeted marketing, dynamic pricing, and logistical optimization is growing. European countries including the United Kingdom, Germany, and France have been at the forefront of AI use in retail.

The Asia-Pacific area, which includes China, Japan, and India, has witnessed a significant surge in AI usage in the retail industry. Chinese e-commerce behemoths, for example, have used AI to provide tailored suggestions and optimize their supply chains. In nations like India, artificial intelligence is being used to improve customer service and simplify processes.

While AI use in Latin America is not as ubiquitous as in other countries, certain shops are looking into AI applications, particularly in big cities. AI technologies are being used for inventory management, consumer insights, and e-commerce in nations such as Brazil and Mexico.

The Middle East has seen an increase in demand for AI applications in retail, with an emphasis on enhancing customer experiences and operational efficiency. AI is being utilized for targeted marketing, demand forecasting, and fraud detection. Adoption rates in Africa vary, with some areas investigating AI for e-commerce and supply chain efficiency.

AI in Retail Market Players

AI in retail companies profiled in the report includes International Business Machines Corporation (IBM), Sentient Technologies, Amazon Web Services, Microsoft Corporation, Oracle Corporation, SAP SE, NVIDIA Corporation, Intel Corporation, Google LLC, and Salesforce, Inc.

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Mr. Frank Wilson

Acumen Research and Consulting

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