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Artificial Intelligence (AI) in Retail Market Size, By Component (Solution [Chatbot, Customer Behavior Tracking, Customer Relationship Management (CRM), Inventory Management, Price Optimization, Recommendation Engine, Supply Chain Management, Visual Search], Service [Professional Service, Managed Service]), By Technology (Machine Learning, Natural Language Processing (NLP), Computer Vision), By Application (Automated Merchandising, Programmatic Advertising, Market Forecasting, In-Store AI & Location Optimization, Data Science), COVID-19 Impact Analysis, Growth Potential, Regional Outlook, Competitive Market Share & Forecast, 2023 – 2032

  • Report ID: GMI2568
  • Published Date: Jan 2023
  • Report Format: PDF

Industry Drivers

AI in Retail Market size valued at USD 6 billion in 2022 and is slated to witness over 30% CAGR from 2023 to 2032. Driven by the extensive use of product identification and computer vision technologies in retail warehouses.
 

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Artificial intelligence (AI) has wide-ranging applications and has become a future tool for advancement. Healthcare, automotive, manufacturing, and several other booming industries are increasingly integrating AI technologies for everyday tasks. The increased inclination of Gen Z toward online shopping trends in the new era of advanced businesses is accelerating the use of AI in the retail market. The expanding Gen Z population has created the most technology-savvy and mobile-friendly consumer base. Their strong preference to shop online is set to encourage traditional retailers to adopt AI solutions and services.
 

 Furthermore, cashier-less checkouts are another major benefit of integrating AI in the retail sector that is fueling the industry growth. Using computer vision and big data analytics, retailers are transforming routine shopping into intelligent shopping. For instance, in February 2022, Amazon rolled out its Just Walk Out cashier-less technology at its new Amazon Fresh grocery store in Ventura County, California, to offer customers a fully autonomous checkout option.

 

Complex organizational structures may restrain industry progression

The organizational framework of retailers is a major factor restraining the AI in retail market growth. Administrative culture can hinder the adoption of AI in businesses, especially in companies with underdeveloped analytical decision-making and digital transformation processes that create suspicion in algorithmic decision-making, fueled by the perception that studies and recommendations are unclear. As per KPMG’s Living in an AI World 2020 report, 62 percent of retail participants were not supportive of AI adoption due to a loss of job security. Nevertheless, artificial intelligence offers the potential to help individuals with tedious, time-consuming tasks, which is speculated to prompt retailers to adopt AI services.
 

Wide in-store applicability to accelerate the use of computer vision technology

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According to the report, the computer vision technology segment held more than a 15% share of the AI in retail market in 2022. The prevalent utilization of computer vision technology by merchants for several in-store applications to compete with their online rivals is driving the market demand. For instance, in September 2022, Kroger Co., an American retailer, rolled out its visual AI-based self-checkout solution that uses Nvidia’s computer vision and AI capabilities with Evergreen’s Visual AI.
 

Increasing uptake of analytics solutions to help AI solutions gain traction

With respect to components, the solution segment is expected to grow at 30% CAGR through 2032. The widespread adoption of analytics solutions by online retailers to widen their client base and offer better customer experience is set to facilitate the industry expansion. For instance, in October 2022, Wayfair, a store-commerce firm, completed a full digital transformation by migrating its data center applications and services to Google Cloud Foundation.
 

Need for personalized promotion in retailing to increase AI uptake in programmatic advertising

Authors: Preeti Wadhwani, Shamal Gawande

Frequently Asked Questions (FAQ) :

The global market of AI in Retail surpassed a valuation of USD 6 billion in 2022 and is slated to progress at more than 30% CAGR over the next 10 years owing to the extensive use of product identification and computer vision technologies in retail warehouses.
The programmatic advertising application segment is anticipated to exceed USD 25 billion in revenue by the end of 2032 on account of the growing need for personalized promotion in retailing.
The computer vision segment held over 15% market share in 2022 due to the prevalent utilization of computer vision technology by merchants for several in-store applications to compete with their online rivals.
The market for AI in retail in Europe is expected to grow at a rapid pace to attain a market share of more than 15% by 2032 propelled by the rapid digitalization, shifting customer preferences, and product innovation efforts by industry participants operating in the region.

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Premium Report Details

  • Base Year: 2022
  • Companies covered: 20
  • Tables & Figures: 392
  • Countries covered: 20
  • Pages: 280
  • Upcoming Report: Details can be customized to meet your information and data needs. Feel free to share your detailed research requirements via this form.

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