The Artificial Intelligence in Retail Market is in Trends by Growing Adoption of AI for Personalized Customer Experiences
The Artificial Intelligence in Retail Market is in Trends by Growing Adoption of AI for Personalized Customer Experiences
Blog Article
Artificial intelligence (AI) refers to the simulation of human intelligence in machines that are programmed to think like humans and mimic their actions. In the retail industry, AI helps analyze customer purchase patterns, behaviors and preferences to provide personalized recommendations and customized product listings. AI-based automation is also used in areas like predictive analytics, demand forecasting, customer service, supply chain management etc. to optimize operations and improve the overall shopping experience.
The Global Artificial Intelligence in Retail Market is estimated to be valued at USD 10.48 Bn in 2024 and is expected to reach USD 73.02 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 32% from 2024 to 2031.
Key Takeaways
Key players operating in the artificial intelligence in retail are Amazon, IBM, Microsoft and Google. These players are investing heavily in developing advanced AI solutions for retailers. Amazon's AI assistant Alexa has gained widespread adoption for assisting customers with shopping queries.
The adoption of AI-powered virtual assistants, smart stores, online shopping and digital technologies is fueling Artificial Intelligence in Retail Market Growth. Consumers are increasingly preferring the convenience of online shopping, which has enabled retailers to collect large customer datasets to identify trends and patterns.
The market is also witnessing significant expansion in Asia Pacific and Europe due to growing investments by global retail giants. Countries like China, Japan and India offer immense growth opportunities owing to rising internet penetration, growing e-commerce sales and increasing focus on digital transformation of retail operations.
Market Key Trends
One of the major trends in the artificial intelligence in retail market is the growing use of computer vision. CV applications allow visual product search, smart checkouts, predictive analytics based on customer movement patterns in physical stores. For example, CV combined with ML helps Ikea visualize real-time shopping patterns and pre-load products for easy access. This enhances in-store experiences. Such applications are expected to increase and drive the AI retail market growth over the coming years.
Porter’s Analysis
Threat of new entrants: Low development cost of AI technologies reducing entry barriers for new players. However, established retailers have significant competitive advantages in terms of existing customer base and infrastructure.
Bargaining power of buyers: Large retail giants have significant bargaining power over AI solution providers due to their higher purchasing volumes. However, growing demand for hyper-personalization increases retailers' dependency on AI providers.
Bargaining power of suppliers: Major AI providers like IBM, Microsoft and Google have significant bargaining power over retailers given their tech expertise and capabilities. However, growing competition among AI companies improves options for retailers.
Threat of new substitutes: AI capabilities expanding into diverse retail operations pose potential threats from substitute technologies. Blockchain and IoT also emerging as alternative tech solutions for supply chain and inventory management applications.
Competitive rivalry: Intense competition among top retailers to gain market share through superior customer experience is pushing active adoption of AI-led personalization strategies.
Geographical regions
North America accounts for the largest share of the Artificial Intelligence in Retail Market Regional, with the US being the major contributor. High focus on customer-centric shopping and embracing new technologies have made North America an early adopter of AI solutions in retail space.
Fastest growing region
Asia Pacific region is expected to grow at the fastest pace in the coming years. Increasing mobile penetration and e-commerce adoption in developing countries like China and India are providing significant growth opportunities. Government initiatives to develop smart cities and focus on retail automation are further supporting the market growth in Asia Pacific.
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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, chemical and materials, defense and aerospace, consumer goods, etc. (https://www.linkedin.com/in/money-singh-590844163 Report this page