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I AgreeAnalysis of Artificial Intelligence (AI) in Retail Market Covering 30+ Countries Including Analysis of US, Canada, UK, Germany, France, Nordics, GCC countries, Japan, Korea and many more
The global artificial intelligence (AI) in retail market is predicted to advance at a stupendous CAGR of 30.3% and reach a valuation of US$ 85 billion by 2033, up from US$ 6 billion in 2023.
The concept of digital transformation has permeated nearly every industry. However, if there is one industry that has undergone substantial transformation due to the continual expansion of technology, it is the retail sector.
Artificial intelligence in retail allows for faster business decisions based on findings from cognitive technologies while also saving time and money by automating and streamlining routine procedures and operations. Large corporations are seeking ways to strengthen their position and are integrating AI to enhance standards, customer experience, revenue, and processing speed.
The outbreak of COVID-19 had a significant influence on the retail industry globally. The pandemic and lockdown regulations substantially altered purchase patterns, product demand, consumer behavior, and in-store operations.
As a result of this significant drop, retailers began employing artificial intelligence technology to boost their customer experiences and online sales. Artificial intelligence is assisting retailers in realigning supply networks, recognizing demand, understanding new market trends, and more.
Artificial intelligence and big data analytics are critical to digital business; they have the ability to change everything from operational processes to the customer experience. Due to the increasing penetration of smart devices and applications, the proliferation of IoT, the acceptance of cloud services, and technological breakthroughs, the basic understanding and acceptance of AI and big data analytics in retail have increased.
Moreover, demand for AI-enabled visual and voice search is boosting the market growth. E-commerce websites and virtual shops are fast expanding. Consumers can now look for new products using innovative approaches such as product photos, videos, and voice. Artificial intelligence in visual search improves its functionality by analyzing inquiries and mining metadata. The visual search engine employs artificial intelligence elements to evaluate, follow, and predict rising buying patterns, hence improving shopper engagement and experience.
As a result, retailers must employ AI-based search engines to improve customer experience and increase revenue growth. Furthermore, AI-powered searching abilities assist retailers in gaining vital insights into customer patterns and making sound business decisions. AI-powered search engines are projected to provide a vast data pool as well as possible growth prospects to retailers in the coming years.
As per Fact.MR, a market research and competitive intelligence provider, such factors are expected to spur the global demand for artificial intelligence to be used in the retail industry over the coming years.
Report Attributes |
Details |
AI in Retail Market Size in 2023 |
US$ 6 Billion |
Projected Market Value (2033) |
US$ 85 Billion |
Global Market Growth Rate (2023 to 2033) |
30.3% CAGR |
North America Market Share (2022) |
38.5% |
Machine learning Segment Market Share (2022) |
30% |
Key Companies Profiled |
|
“Chatbots Driven by AI Help Improve Customer Experience”
Artificial intelligence-driven chatbot assistance is rapidly gaining acceptance in the retail industry due to its highly effective customer service. To improve the customer experience, the chatbot provides dedicated and personalized responses.
Machine learning and natural language processing (NLP) technologies are used to power the AI chatbots. These technologies provide real-time information on customer preferences and assist the chatbot in understanding the consumers' sentiments and behavioral patterns, which aids in answering customer queries and creating relationships.
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“Dearth of Technical Skills and Infrastructure”
Prominent retail brands are constantly investing in innovative technologies to improve customer interaction; nevertheless, certain constraints are likely to impede the adoption of artificial intelligence technology in the retail market.
Major firms and global retailers like Walmart have already adopted artificial intelligence technology for in-store operations and online portal management. However, due to a dearth of technical skills and infrastructure, small and medium-sized organizations encounter difficulties adopting the technology. Moreover, the high installation cost of the intelligent retail solution is also a significant hurdle for small merchants, limiting implementation.
“Increasing Investments in AI Technology”
North America is the leading provider of AI solutions and an early adopter of AI technologies. Numerous retailers in this region have implemented AI-based solutions to improve inventory management and supply chain operations. AI is assisting retailers in managing and retaining customers and comprehending consumer purchasing trends. AI technologies are being used by both online and offline retail businesses to engage customers and increase total revenue.
The United States is a dominant market in North America due to increasing investments in AI technology. The country's leading market players are striving to develop AI-enabled digital platforms for a variety of end-user industries.
“Growing R&D Activities and Heavy Investments”
The European market is developing at a tremendous pace. The region's current big retailers in the fashion, apparel, and cosmetics sectors, among others, are increasingly investing in innovative technologies to improve customer experience.
The United Kingdom is a major market in Europe due to a thriving ecosystem of investors, clients, and experienced professionals. Moreover, growing research and development activities and increasing commercial investments by leading players in the country are driving market expansion. Germany is following the United Kingdom in terms of growth.
“Thriving e-Commerce Industry in These Countries”
The market in Asia Pacific is benefitting from a significant expansion in all areas, including economic growth, internet infrastructure, spending capability, and consumer goods demand. Moreover, strong government initiatives, the booming e-Commerce industry in countries like Japan and South Korea, and increasing investments in AI technology for enhanced efficiency and real-time inventory management are all contributing to the regional market expansion.
Furthermore, factors such as rising internet and communication infrastructure, increased retailer acceptance of AI-based solutions and services, and growing digitization are all aiding regional market growth.
Japan and South Korea are witnessing considerable growth owing to the expanding e-Commerce and retail industries. To strengthen their portfolios, leading organizations in these countries are emphasizing collaborations.
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“Ability of ML to Improve Supply Chain Systems and Demand Projections”
Machine learning technology learns quickly and thoroughly from data and is well suited to providing personalized experiences to its customers. The technology assists retailers in improving supply chain systems and demand projections to increase inventory efficiency.
Moreover, natural language processing (NLP) is expected to grow rapidly over the projected period. An increase in data analysis and the move toward AI-driven chatbots will boost developments in NLP. Furthermore, NLP can aid in sentiment analysis to evaluate customer messages, call center interactions, online reviews, and social media posts.
“Better Understanding of Customers through Artificial Intelligence”
Several advancements in customer relationship management (CRM) software, such as voice and face recognition, have occurred.
Existing customers account for 65% of the company's revenue, and it costs five times more to acquire a new customer than to keep an existing, pleased one. As a result, CRM is critical. The incorporation of AI tools in CRM will allow companies to better comprehend their customers by analyzing more data. AI technology can assist in automating most operations and ultimately giving more pertinent information to sales personnel
Key providers of artificial intelligence for retail are constantly investing in innovative solutions. Furthermore, key players are using partnership, merger, and acquisition tactics to increase market share. Moreover, many start-ups are focusing on new developments to provide novel AI-driven solutions.
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The global artificial intelligence in retail market is valued at US$ 6 billion in 2023.
Global demand for AI technology in retail is predicted to surge at a CAGR of 30.3% from 2023 to 2033.
The market for artificial intelligence in retail is anticipated to hit US$ 85 billion by 2033.
North America accounted for 38.5% share of the global market in 2022.
Amazon Web Services, Salesforce.Com, Inc, Bloomreach, Inc, Google LLC, Intel Corporation, Microsoft Corporation, IBM Corporation, and Oracle Corporation are major players operating in the global market.