PUBLISHER: The Business Research Company | PRODUCT CODE: 1813725
PUBLISHER: The Business Research Company | PRODUCT CODE: 1813725
Artificial intelligence (AI) in retail refers to the application of advanced computing technologies that simulate human intelligence to enhance and automate various aspects of the retail industry. This includes leveraging AI algorithms and machine learning techniques to analyze vast amounts of data, predict consumer behavior, optimize inventory management, personalize customer experiences, and streamline operational processes.
The main components of artificial intelligence (AI) in retail are solutions and services. A solution refers to a comprehensive set of technologies, applications, or services that leverage AI to address specific challenges or enhance specific aspects of retail operations. It uses various technologies such as machine learning, natural language processing, chatbots, image and video analytics, and swarm intelligence, with multiple deployment mode include cloud and on-premise. The channels used are omnichannel, brick and mortar, pure-play online retailers, and used for customer relationship management, supply chain and logistics, in-store navigation, and inventory management product optimization.
Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report's Recommendations and Conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.
The sharp rise in U.S. tariffs and the ensuing trade tensions in spring 2025 are having a profound impact on the retail and wholesale sector, particularly in areas such as sourcing, inventory management, and pricing strategies. Increased duties on imported consumer goods including electronics, apparel, furniture, and packaged foods have driven up procurement costs, forcing many retailers and wholesalers to either raise prices for consumers or absorb the financial hit. Small and mid-sized businesses, which often lack pricing leverage, are especially at risk, facing tighter margins and reduced competitiveness. Supply chain disruptions and international shipping uncertainties have further strained inventory cycles. At the same time, retaliatory tariffs from overseas markets have diminished export opportunities for U.S. brands, curbing potential revenue growth. In response, many companies are pivoting to domestic and regional suppliers, bolstering supply chain resilience, and leveraging data-driven demand forecasting to manage cost fluctuations and sustain customer satisfaction.
The main components of artificial intelligence (AI) in retail are solutions and services. A solution refers to a comprehensive set of technologies, applications, or services that leverage AI to address specific challenges or enhance specific aspects of retail operations. It uses various technologies such as machine learning, natural language processing, chatbots, image and video analytics, and swarm intelligence, with multiple deployment mode include cloud and on-premise. The channels used are omnichannel, brick and mortar, pure-play online retailers, and used for customer relationship management, supply chain and logistics, in-store navigation, and inventory management product optimization.
The artificial intelligence (ai) in retail market size has grown exponentially in recent years. It will grow from $11.9 billion in 2024 to $15.4 billion in 2025 at a compound annual growth rate (CAGR) of 29.4%. The growth in the historic period can be attributed to growth of AI in retail, increased necessity for surveillance and monitoring, rapid implementation of AI solutions, advancements in computer vision, growing demand for efficient operations.
The artificial intelligence (ai) in retail market size is expected to see exponential growth in the next few years. It will grow to $43.87 billion in 2029 at a compound annual growth rate (CAGR) of 29.9%. The growth in the forecast period can be attributed to projected market growth, AI's transformative power, demand-side trends, favorable global market outlook, increasing competition. Major trends in the forecast period include adoption of machine learning, growing demand for ai services, enhanced user experience and productivity, regional market expansion.
The forecast of 29.9% growth over the next five years reflects a slight reduction of 0.2% from the previous projection. This reduction is primarily due to the impact of tariffs between the US and other countries. New tariffs on AI-enabling hardware like GPUs and specialized chips, primarily sourced from China and Taiwan, could impede the deployment of advanced retail AI solutions due to increased system integration costs. The effect will also be felt more widely due to reciprocal tariffs and the negative effect on the global economy and trade due to increased trade tensions and restrictions.
The digital transformation in the retail industry is expected to propel the growth of artificial intelligence (AI) in the retail market going forward. Digital transformation refers to the comprehensive and strategic integration of digital technologies, processes, and capabilities across various aspects of an organization. Retailers globally are adopting digital processes and enhancing customer experiences, resulting in an increased demand for AI solutions. This integration of AI in retail, driven by the imperative of digital transformation, fosters innovation in tasks such as automation, personalized marketing, and trend prediction, improving operational efficiency and providing insights into customer behavior. For instance, in January 2024, according to a survey of 400 respondents conducted by NVIDIA Corporation, a US-based manufacturing and technology company, 69% of retailers reported increased annual revenue with AI adoption, 72% experienced lower operating costs, and over 60% plan to boost AI investments in the next 18 months. Therefore, the digital transformation in the retail industry is driving the growth of artificial intelligence (AI) in the retail market.
Major companies operating in the artificial intelligence (AI) retail market are developing advanced technologies, such as cloud-based solutions, to drive innovation and enhance efficiency in the retail sector. Cloud-based solutions refer to computing services, including storage, processing, and software applications, that are delivered over the internet (cloud) instead of relying on local servers or traditional computing infrastructure. For instance, in October 2023, Flipkart Private Limited, an India-based e-commerce company, launched Flipkart Commerce Cloud, which aims to help retailers across the world grow their businesses and solve business needs through intelligent and AI-driven solutions. This platform offers retail technology solutions for international retailers, marketplaces, and e-commerce platforms. The suite of solutions includes a complete marketplace technology stack, retail media solution, pricing solution, inventory management, and forecasting solutions, all built using artificial intelligence and machine learning
In July 2023, ServiceNow Inc., a US-based provider of digital workflow solutions, acquired G2k Group Gmbh for approximately $0.5 billion. This acquisition is aimed at boosting ServiceNow's AI capabilities and broadening its footprint in the retail IoT sector, enabling the development of an AI-powered end-to-end workflow solution on the ServiceNow platform that connects real-time data and intelligence, ultimately transforming retail experiences and creating opportunities across diverse industries. G2k Group Gmbh is a Germany-based cutting-edge technology company specializing in artificial intelligence (AI) and IoT solutions for the retail industry.
Major companies operating in the artificial intelligence (AI) in retail market are Google LLC, Microsoft Corporation, Amazon Web Services, Intel Corporation, International Business Machines Corporation, Oracle Corporation, SAP SE, Presto, NVIDIA Corporation, Salesforce Inc., Baidu Inc., ViSenze, Travelport, Databricks, DATAIKU, Symbotic, BloomReach Inc., Trax, Interactions LLC, Featurespace, RetailNext Inc., Trigo, Standard Cognition, CognitiveScale Inc., BrainBox AI, Inbenta Technologies, Next IT Corp., Infinite Analytics, Lexalytics Inc., Sentient Technologies
North America was the largest region in the artificial intelligence (AI) in retail market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the artificial intelligence (AI) in retail market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.
The countries covered in the artificial intelligence (AI) in retail market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.
The artificial intelligence (AI) in retail market includes revenues earned by entities by predictive analytics, personalized marketing, recommendation engines, fraud detection, visual search and recognition. The market value includes the value of related goods sold by the service provider or included within the service offering. The artificial intelligence (AI) in retail market consists of sales of computer vision, voice commerce, dynamic pricing systems, and augmented reality (AR) systems. Values in this market are 'factory gate' values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.
The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).
The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.
Artificial Intelligence (AI) In Retail Global Market Report 2025 from The Business Research Company provides strategists, marketers and senior management with the critical information they need to assess the market.
This report focuses on artificial intelligence (ai) in retail market which is experiencing strong growth. The report gives a guide to the trends which will be shaping the market over the next ten years and beyond.
Where is the largest and fastest growing market for artificial intelligence (ai) in retail ? How does the market relate to the overall economy, demography and other similar markets? What forces will shape the market going forward, including technological disruption, regulatory shifts, and changing consumer preferences? The artificial intelligence (ai) in retail market global report from the Business Research Company answers all these questions and many more.
The report covers market characteristics, size and growth, segmentation, regional and country breakdowns, competitive landscape, market shares, trends and strategies for this market. It traces the market's historic and forecast market growth by geography.
The forecasts are made after considering the major factors currently impacting the market. These include the technological advancements such as AI and automation, Russia-Ukraine war, trade tariffs (government-imposed import/export duties), elevated inflation and interest rates.