Published: July 2019 | Report Code: IM10832 | Available Format: PDF | Pages: 154
The artificial intelligence (AI) in retail market revenue stood at $720.0 million in 2018, and the market is predicted to progress at a CAGR of 35.4% between 2019 and 2024. The market is being driven by the booming e-retail industry and surging investments being made in AI by retail companies. The adoption of AI solutions helps retailers gain insights into the smartphone- and internet-influenced buying habits of customers.
The recommendation engine category held the largest share in the market between 2014 and 2018, under the solution category of the offering segment. This is credited to the surging usage of AI-driven recommendation engines by various online retail companies, such as eBay Inc. and Amazon.com Inc., for suggesting products based on the past purchases of customers. Additionally, with the increasing popularity of digital marketing in Asia-Pacific (APAC) and North America, the demand for recommendation engines is growing rapidly.
The machine learning (ML) category, within the technology segment, dominated the AI in retail industry in 2018. Moreover, this category is predicted to exhibit the fastest growth in the forthcoming years. This is ascribed to the soaring adoption of the ML technology by online retailers for offering personalized services and improving the customer experience, especially in China and the U.S.
Geographically, North America generated the highest revenue in the AI in retail market in 2018 due to the increasing adoption of the natural language processing (NLP) and ML technologies by both the online and brick-and-mortar retail stores in the region. Organizations such as Walmart Inc. and Amazon.com Inc. are using these technologies for understanding the customer behavior and enhancing the overall shopping experience.
For example, Amazon.com Inc. opened Amazon Go convenience outlets in San Francisco that deploy various AI-assisted technologies, such as computer vision, for monitoring the products that are taken off the shelves in 2018. With the help of this technology, the company intends to reduce the billing and checkout times and improve the customer experience.
Many retailers around the world are adopting AI technologies to analyze the large volumes of data related to campaign management, e-mail marketing, and in-store customer behavior. This, in turn, allows them to identify buying patterns and develop personalized marketing campaigns.
Thus, the integration of AI technologies, such as deep learning, chatbots, and ML, is helping retailers transform their entire marketing process. As a result, the adoption of these technologies by retailers is quickly becoming a major AI in retail market trend. For example, Myntra Designs Private Limited, a subsidiary of Flipkart Internet Private Limited, entered into a partnership with Netcore Solutions Pvt. Ltd. in 2018 to use Smartech, an AI-powered multi-channel marketing platform. This move helped Myntra improve its e-mail marketing campaigns by 60%.
Furthermore, the increasing number of shopping channels, such as mobile applications, physical retail stores, and websites, is compelling retailers to incorporate AI technologies for capturing a larger customer pool.
The surging deployment of AI-powered chatbots is creating immense growth opportunities for the players in the market for AI in retail. These chatbots are increasingly being adopted by retail companies, such as Burberry Group PLC, eBay Inc., and H&M Hennes Mauritz AB, for providing a personalized experience to their customers and, thus, gaining their loyalty. Due to this factor, AI solution providers are increasingly focusing on developing tools that can support retail operations.
For example, Mode.ai, a computer vision company based in the U.S., launched a Facebook Messenger chatbot for Louis Vuitton North America Inc. in 2018. With the help of this chatbot, users can access the full catalog online and share products with their friends.
Competition in the AI in retail market is becoming intensive on account of the growing number of global and regional players offering AI solutions and services. In recent years, major players in the AI in retail market have primarily focused on product launches, partnerships, and mergers and acquisitions to expand their market reach and share. For instance, in January 2019, Microsoft Corporation partnered with The Kroger Co. and introduced retail as a service (RaaS), a solution powered by Microsoft Azure. It offers support to retailers in obtaining customer insights, improving out-of-stocks, and enhancing employee productivity.
Some of the key players operating in the AI in retail market include IBM Corporation, Microsoft Corporation, Google LLC, Salesforce.com Inc., Oracle Corporation, SAP SE, Accenture PLC, Infosys Limited, Intel Corporation, Amazon Web Services Inc., ViSenze Pte. Ltd., Evolv Technologies Inc., and Numenta Inc.
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