Artificial Intelligence (AI) in Retail Industry Size, Trends, Growth & Market Analysis (2024 - 2029)

Artificial Intelligence (AI) in Retail Industry Analysis

The AI In Retail Market size is estimated at USD 9.85 billion in 2024, and is expected to reach USD 40.49 billion by 2029, growing at a CAGR of 32.68% during the forecast period (2024-2029).

Artificial intelligence, a collection of algorithms harnessing vast and reliable data, is increasingly adopted in retail to personalize the shopping experience. By leveraging customer preferences, retailers can offer tailored product recommendations, elevating the customer experience and driving sales.

• Retail has witnessed a profound digital transformation, propelled by the integration of advanced data analytics and forecasting systems. This, bolstered by the convergence of artificial intelligence and the Internet of Things, has empowered retailers with sophisticated insights to optimize operations and identify lucrative business opportunities. Retailers are turning to AI-powered solutions to tackle challenges like evolving consumer behavior, labor constraints, supply chain disruptions, and escalating costs.
• Recognizing the potential of AI to reduce costs and enhance operational efficiency, retailers are increasingly integrating it into their processes. This shift is reshaping customer service, with AI-powered chatbots revolutionizing interactions. During online purchases, chatbots can suggest products based on customers' preferences, including price range, features, and user reviews. By incorporating recommendation algorithms, retailers can boost sales while customers find products tailored to their preferences.
• Moreover, retailers are forging deeper customer relationships, infusing digital elements into sales, support, merchandising, and finance operations. Beyond AI, technologies like IoT, automation, blockchain, and virtual reality are digitally disrupting the retail landscape. AI-equipped retailers leverage sharp forecasting tools for smarter decision-making while enhanced visual recognition and augmented reality redefine online shopping, enabling customers to experience products virtually.
• The global retail sector is witnessing a surge in AI applications, with both tech giants and SMBs ramping up their efforts. Consequently, the demand for AI engineers has soared, but more experienced professionals are still needed in this field.
• The COVID-19 pandemic has accelerated these trends, leaving retailers grappling to adapt. As consumer behavior tilts toward online, traditional retailers are grappling to bolster their technological capabilities. The pandemic has ushered in a customer-centric paradigm, and companies embracing digital transformation principles are fortifying their operations and reaping significant profits.

Artificial Intelligence (AI) in Retail Industry Trends

Software Segment to Witness Major Growth

Artificial Intelligence (AI) in Retail Industry Industry Segmentation

Artificial intelligence is an approach for teaching a computer, a robot operated by a computer, or software to think critically and creatively like a human mind. AI is achieved by examining the cognitive processes and researching the patterns of the human brain. These research projects produce intelligent systems and software.

The artificial intelligence in the retail market is segmented by channel (omnichannel, brick and mortar, and pure-play online retailers), component (software, service [(managed and professional)]), deployment (cloud and on-premise), application (supply chain and logistics, product optimization, in-store navigation, payment and pricing analytics, inventory management, and customer relationship management((CRM))), technology (machine learning, natural language processing, chatbots, image and video analytics, and swarm intelligence) and geography (North America, Europe, Asia-Pacific, and the Rest of World). The report offers the market size in value terms in USD for all the abovementioned segments.