by Artificial intelligence (AI) in retail refers to the use of machine learning algorithms and neural networks to perform human-like tasks for retail businesses. AI helps retailers better understand their customers by analyzing purchase histories, website interactions, and demographics to personalize the shopping experience. Products associated with AI in retail include chatbots, computer vision systems, predictive analytics and forecasting, and AI-powered customer service agents.
The Global Artificial Intelligence in Retail Market is estimated to be valued at US$ 10.48 Bn in 2024 and is expected to exhibit a CAGR of 32 % over the forecast period 2024 to 2031.
Key Takeaways
Key players operating in the Artificial Intelligence in Retail are Adobe, Alibaba Group, Amazon Web Services (AWS), Apple, Appier, Ceconomy, Edeka, Foot Locker, Home Depot, IBM, Kroger, Lemon AI, Lowe’s, Microsoft, and NIKE. AI helps retailers understand customers better through analysis of purchase history and online behavior. Some key players have developed AI-powered chatbots, computer vision technology, and recommendation engines to enhance the shopping and customer experience.
As the retail industry continues to evolve around seamless digital experiences, the Artificial Intelligence in Retail Market Growth exponentially. Retailers are implementing AI across supply chain management, logistics, customer service, and store operations to improve efficiency and cut costs. Personalized recommendations, predictive analytics, and robotics are helping retailers scale operations and meet consumer demand.
With growing investments and partnerships, the AI retail market is expanding globally. Asia Pacific accounts for over 35% market share due to the rapidly evolving digital landscape in countries like China, Japan and India. Meanwhile, North America remains a key region due to presence of major tech players and focus on innovation. AI is revolutionizing the retail experience across key developed and emerging economies worldwide.
Market Key Trends
One of the major trends driving the growth of AI in retail is personalization. AI powered algorithms can analyze enormous customer data to offer hyper personalized recommendations, deals and experiences. Tools like computer vision, personal shoppers, predictive ordering help retailers tailor their offerings according to customer preferences, buying patterns and detected customer sentiment in real time. This is improving customer loyalty and driving greater engagement with retailers. Personalization will continue to be a dominant trend, as AI derives deeper insights from customer interactions through various retail touchpoints.
Porter’s Analysis
Threat of new entrants: High capital requirements and expertise needed acts as a deterrent for new players in this evolving market space.
Bargaining power of buyers: Large retailers have considerable bargaining power due to their scale and information on consumer behavior and trends.
Bargaining power of suppliers: Established AI solution providers have some bargaining power owing to their specialized technology and solutions tailored for retail operations.
Threat of new substitutes: Emergence of other emerging technologies like predictive analytics, virtual/mixed reality, block chain can replace AI in retail to some extent.
Competitive rivalry: Intense competition exists among key players to gain market share through differentiated and innovative AI solutions focused on personalized shopping experiences and optimization of supply chains.
Geographical Regions
North America dominates Artificial Intelligence in Retail Market Regional currently in terms of value, owing to significant presence of major AI technology companies and early adoption by retailers in the region. The retail sector in the US and Canada are embracing AI-based solutions at a rapid pace to improve customer experience through personalized recommendations and targeted promotions.
Asia Pacific is poised to be the fastest growing regional market for artificial intelligence in retail during the forecast period. Growing e-commerce activities, digitization of retail operations, and increasing disposable incomes are some key factors propelling the demand for AI in retail in developing Asian countries like China, India. Chinese technology giants like Alibaba and JD.com have already established themselves as leaders in deploying AI applications across their vast online and offline retail platforms.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
About Author - Money Singh
Money Singh is a seasoned content writer with over four years of experience in the market research sector. Her expertise spans various industries, including food and beverages, biotechnology, chemicals and materials, defense and aerospace, consumer goods, etc. LinkedIn Profile
