The digital transformation of the retail industry, proliferation of online shopping activities, and deployment of artificial intelligence (AI) technologies, including machine learning and natural language processing (NLP), by online as well as brick-and-mortar stores are driving the demand for AI solutions. Due to these factors, the global AI in retail market is expected to generate $36,462.5 million revenue by 2030, advancing at a CAGR of 40.5% during 2021–2030.
Most retailers have either integrated digital experiences with physical ones or replicated in-store experiences virtually. AI understands humans and the nuances of consumer behavior, which provides real-time and multi-layered responses to customers to solve their problems. This attribute has helped many customers during the COVID-19 pandemic, which has positively impacted the AI in retail market.
The market is classified into solution and service, on the basis of offering. Of these, the service category is expected to witness the faster growth during the forecast period (2022–2030). This can be mainly ascribed to the growing demand for professional services from retailers integrating AI into their operations.
Furthermore, the market is categorized into machine learning, NLP, computer vision, and others, on the basis of technology. Among these, machine learning is estimated to hold the largest market share in 2021 owing to its increasing usage by online retailers to offer personalized services and enhance customers’ experience.
Geographically, the North American region is estimated to hold the largest share of the market in 2021, and it is expected to maintain its position in the forecast period. This is mainly attributed to the increasing deployment of AI technologies, including machine learning and NLP, by the online as well as brick-and-mortar retail stores in the region.
The Asia-Pacific (APAC) region is expected to witness lucrative industry growth as a consequence of the increasing emphasis on digital marketing, rising government initiatives in the AI domain, and expanding e-commerce industry. The growing deployment of the AI technology by online retailers in China, such as Alibaba Group Holding Limited, Amazon.com Inc., eBay Inc., and JD.com Inc., coupled with the increasing internet penetration, is driving the AI in retail market in the region.
Players in the AI in retail market are frequently involving in partnerships, collaborations, mergers, and acquisitions to enhance their market presence. For instance, in April 2021, Accenture PLC acquired Core Compete, a cloud analytics services firm headquartered in North Carolina, U.S., with additional offices in the U.K. and India. Core Compete enables digital transformation with cloud-native solutions that deliver AI and machine-learning-infused business outcomes, with a particular focus on supply chain, retail, and financial services.
Similarly, in November 2020, International Business Machines Corporation and Advanced Micro Devices Inc. (AMD) announced a multi-year joint development agreement to enhance and extend the security and AI offerings of both companies. The joint development agreement builds upon open-source software, open standards, and open-system architectures to drive confidential computing in hybrid cloud environments and support a broad range of accelerators across high-performance computing (HPC) and enterprise-critical capabilities, such as virtualization and encryption.
Some of the major players operating in the global market are International Business Machines Corporation, Microsoft Corporation, Google LLC, Salesforce.com Inc., Oracle Corporation, SAP SE, Accenture PLC, Infosys Limited, Intel Corporation, Amazon.com Inc., ViSenze Pte. Ltd., and Evolv Technology Solutions Inc.