AI In Retail Market Size, Share & Trends Analysis Report By Component, By Technology (Chatbots, Natural Language Processing), By Sales Channel, By Application, By Region, And Segment Forecasts, 2022 - 2030

Report Overview

The global AI in retail market size was valued at USD 5.79 billion in 2021 and is expected to expand at a compound annual growth rate (CAGR) exceeding 23.9% from 2022 to 2030. The growth is fueled by factors such as the constantly rising number of internet users, smart devices, the need for surveillance and monitoring at a physical store, and government policies toward digitization. AI in the retail industry revolves around how corporations have operated over the past few decades. Big data analytics and AI are crucial to digital business; they have the capabilities to transform everything from customer experience to business operations.

The adoption of big data analytics and AI in the retail industry has been growing due to technological advancements, increasing penetration of applications and smart devices, adoption of cloud services, and proliferation of IoT. For instance, in February 2020, Baker Hughes, a provider of oil field services, partnered with C3.ai and announced the release of an AI-based application, BH3 Production optimization, that enables operators to observe real-time production statistics and optimize operations, and better forecast future production, for increased gas and oil production rates.

Artificial Intelligence in the retail sector is fueling faster corporate decisions in product management, marketing, e-commerce, and other business domains by reducing the gap from insights to implementation. For instance, in June 2021, Talkdesk, Inc. introduced artificial intelligence (AI) based Talkdesk Retail Smart Service that delivers automated self-services to the consumer and support agents for concentrating on other major income generation tasks. These services serve personalized recommendations and better engagement to aid consumers.

Moreover, Artificial intelligence-based chatbot assistance is gaining popularity across the retail industry owing to its highly efficient consumer service. This chatbot provides personalized and dedicated responses to customers, boosting consumer satisfaction. Technological advancements in the retail sector, such as computer vision, are gaining traction at brick-and-mortar outlets. Computer vision is a distinctive type of AI deep learning in retail that interprets and “sees” visual data. This advancement opens the opportunity for new retail across inventory management, demand forecasting, customer experience, and more.

For instance, in June 2022, Intel Corporation, ASUSTeK Computer Inc., and Microsoft Corporation collaborated to release AI DevKit, the world's first AI on PC Development Kit. The AI on PC Development Kit is developed with deep neural networks and computer vision applications for the PC. Integration of software and hardware, with tutorials and source code that aids in the creation of compelling AI applications and enables new applications.

Component Insights

The solution segment dominated with a revenue share of more than 71.2% in 2021. The emerging challenges in managing several retail operations are said to boost the retail sector's innovative and new automated technologies. The AI-powered technologies aid retailers in improving warehouse management, managing supply chain operations & logistics, and improving the consumer experience. The emergence of software, such as IBM Watson, Salesforce Einstein, Google Cloud AI Platform, and Content DNA Platform, has contributed to the segment share.

Services are likely to record immense growth throughout the forecast period. The AI services in retail could exhibit profound growth on the back of robust demand for managed services to boost efficiency, productivity, and accuracy to optimize business operations. Hence, the speedy adoption of AI solutions is growing the demand for services as it helps creates smart functions, enhances the consumer experience, improves revenue growth potential, enables rapid innovation, and reduces human error.

Technology Insights

The machine learning segment led the market with a revenue share of 30.2% in 2021. Machine learning serves fast, deep from the gathered data, and is suitable for delivering personalized experiences to its consumers. To fuel inventory efficiency, it aids retail vendors in enhancing supply chain systems and demand forecasts. For example, Amazon Inc.'s Amazon SageMaker is a wholly organized service that utilizes machine learning techniques for applications, from anticipating analytics to the consumer experience.

Natural language processing is predicted to achieve rapid growth throughout the forecast period. An exponential rise in data analysis and the trend for AI-driven chatbots will boost advancements in NLP. NLP-powered chatbots, including mobile interfaces and touchscreen, will help foster an interactive customer experience. Besides, NLP can help in sentiment analysis to assess call center interactions, customer messages, social media posts, and online reviews.

The image and video analytics segment is expected to exhibit significant growth during the forecast period. The trend for retail video analytics comes on the back of the surging popularity of business intelligence tools to gain inputs on in-store promotional strategies and queue data and bolster the security of malls and chain shops.

Sales Channel Insights

The Omni channel segment held the largest revenue share of 43.3% in 2021. Omni channel strategies have gained immense popularity due to the expansion of digitization across developing and developed countries. Moreover, headless commerce has set the trend to leverage retailers to provide payment gateways and products across kiosk screens, progressive web apps, smartwatches, and mobile apps. Omni channel experience will gain prominence in light of the digitized supply chain and focus on providing a seamless customer experience.

Pure-play online retailers are predicted to achieve hastened progress due to the rising online & virtual shopping. The proliferation of IoT, AI, and social media will augur well for global market growth. Many retail vendors are enhancing their online customer-serving competencies by adopting artificial intelligence solutions.

Application Insights

The Customer relationship management (CRM) segment held a revenue share of more than 19.7% in 2021. The CRM segment will gain prominence with strong demand to boost customer retention and customer service. AI-powered search engines, virtual assistance, chatbots, and other solutions aid retail vendors in building loyalty and strong customer relationships. Moreover, applications of CRM could help boost social media integration, seamless communication, and data collection for retail businesses.

The virtual assistance segment is anticipated to witness the fastest CAGR of 25.1% from 2022 to 2030, coming on the heels of the high penetration of smartphones and other advanced tools. The retail sector has explored opportunities in virtual assistant technologies to streamline the supply chain, including invoicing, ordering inventory, and bookkeeping.

The supply chain and logistics segment held a significant revenue share in the market. Major companies are employing this application in their business process to make it smooth and efficient. For instance, in September 2020, Symphony RetailAI, a company based in the U.S. and a global provider of artificial Intelligence marketing, supply chain, and merchandising solutions for FMCG manufacturers and retailers, announced an agreement with Netto and Intermarche. Symphony RetailAI's AI-based devices would facilitate a 360-degree complete overview of this data, allowing for much more efficient use and greater agility in all aspects of the supply chain.

Regional Insights

North America dominated with a revenue share of 38.5% in 2021. The opportunities for industry expansion are strong, as significant investments are being made in AI projects and related research and development activities. Furthermore, regional retail vendors are concentrating on extracting available data on customer preferences to improve customer service efficiency.

The leading companies, such as Google Inc.; Microsoft; IBM Corporation; Salesforce; and Amazon Web Services adopt organic and inorganic strategies. For instance, in January 2021, Google Cloud rolled out Product Discovery Solutions for retail to foster personalized online shopping.

Asia Pacific is expected to witness the fastest CAGR of 31.6% from 2022 to 2030. The region's expansion can be attributed to technological advancements in countries such as China, Japan, and India. The rapid adoption of smart devices, and the widespread use of 5G technology in the retail sector, are the primary factors driving the growth of Asia Pacific AI in retail market.

Key Companies & Market Share Insights

The market is characterized by intense competition, with a few major global players holding a significant market share. Key players emphasize new product developments to offer avenues for increased profitability through better customer relationships. For instance, in October 2020, NVIDIA suggested that it had upped collaboration with retailers and other stakeholders to build an ecosystem for retail, including conversational AI, forecasting, intelligent stores, and recommendation systems. The strategic approach could help propel real-time insights and enhance the shopping experience. Some prominent players in the AI in retail market include:

• NVIDIA Corporation

• Microsoft Corporation

• Google LLC

• IBM Corporation

• SAP SE

• Oracle Corporation

• Sentient technologies

• Intel Corporation

• Salesforce, Inc.

AI In Retail Market Report Scope

Global AI in Retail Market Segmentation

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the global AI in retail market report based on component, technology, sales channel, application, and region:

• Component Outlook (Revenue, USD Million, 2017 - 2030)

  • Solution

  • Service

• Technology Outlook (Revenue, USD Million, 2017 - 2030)

  • Machine Learning

  • Natural Language Processing

  • Chatbots

  • Image and Video Analytics

  • Swarm Intelligence

• Sales Channel Outlook (Revenue, USD Million, 2017 - 2030)

  • Omnichannel

  • Brick and Mortar

  • Pure-play Online Retailers

• Application Outlook (Revenue, USD Million, 2017 - 2030)

  • Customer Relationship Management (CRM)

  • Supply Chain and Logistics

  • Inventory Management

  • Product Optimization

  • In-Store Navigation

  • Payment and Pricing Analytics

  • Virtual Assistant

• Regional Outlook (Revenue, USD Million, 2017 - 2030)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • Germany

    • U.K.

    • France

  • Asia Pacific

    • China

    • India

    • Japan

  • South America

    • Brazil

  • Middle East & Africa