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IN THE NEWSJanuary 2021- Google announced the launch of Product Delivery Solutions for Retail, which is a suite of services designed for improving retailers’ eCommerce capabilities and help them discover personalized customer experience.
The global AI in retail market is estimated to garner a large revenue by recording a CAGR of ~35% over the forecast period, i.e., 2022 – 2030. The growth of the market can be attributed largely to the increasing investments in AI technology for developing innovative applications centered at improving retail customer experience. Along with this, growing funding in several applications of artificial intelligence including machine learning, deep learning, advanced analytics and object recognition, is also expected to drive market growth in the upcoming years. In 2019, the total funding allocated to machine learning around the world was approximately USD 30 billion. The budgets for ML programs are calculated to grow by more than 25 percent as of now. Furthermore, benefits of AI in retail such as enhanced customer experience, effective promotion and merchandising, and lower cost-to-serve are projected to offer lucrative opportunities to the market in the near future. Rising advent of new business models and advancements in data science are also predicted to result in furthering the expansion of market.
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The market is segmented by application into supply chain and logistics, product optimization, in-store navigation, payment and pricing analytics, inventory management, and customer relationship management. Out of these, the product optimization segment is anticipated to hold the largest share in the global AI In retail market on account of the rising emphasis of companies on product recommendation and planning, and growing advancements in big data analytics. Moreover, on the basis of technology, the segment for natural language processing is assessed to grab the largest share during the forecast period owing to the increase in funding to leverage voice-based technologies for developing interactive online and in-store conversational AI platforms. In addition, integration of chatbots with social media platforms is also evaluated to boost the growth of the market segment in the future.
The never-ending growth in internet accessibility around the world along with numerous technological advancements comprising 5G, blockchain, cloud services, Internet of Things (IoT), and Artificial Intelligence (AI) among others have significantly boosted the economic growth in the last two decades. As of April 2021, there were more than 4.5 billion users that were actively using the internet globally. Moreover, the growth in ICT sector has significantly contributed towards GDP growth, labor productivity, and R&D spending among other transformations of economies in different nations of the globe. Furthermore, the production of goods and services in the ICT sector is also contributing to the economic growth and development. As per the statistics in the United Nations Conference on Trade and Development’s database, the ICT good exports (% of total good exports) globally grew from 10.816 in 2015 to 11.536 in 2019. In 2019, these exports in Hong Kong SAR, China amounted to 56.65%, 25.23% in East Asia & Pacific, 26.50% in China, 25.77% in Korea, Rep., 8.74% in the United States, and 35.01% in Vietnam. These are some of the important factors that are boosting the growth of the market.
On the basis of geographical analysis, the global AI in retail market is segmented into five major regions including North America, Europe, Asia Pacific, Latin America and the Middle East & Africa region. The market in Asia Pacific is estimated to witness noteworthy growth over the forecast period on the back of the increasing number of retail companies in the region taking up AI-oriented initiatives. Apart from this, rising adoption of intelligent algorithms among retailers to analyze consumer behavior, and growing use of chatbots for providing personalized shopping experience are also expected to drive the region’s market growth. For instance, in 2019 more than 10 percent people used chatbots in India, holding the second position among countries with the highest number of chatbot users worldwide. Additionally, the market in North America is projected to acquire the largest share during the forecast period in view of the escalating deployment of AI based solutions in supply chain operations and inventory, and strong presence of prominent AI retail companies in the region.
The global AI in retail market is further classified on the basis of region as follows:
Our in-depth analysis of the global AI in retail market includes the following segments:
FREQUENTLY ASKED QUESTIONS
The major growth drivers for the market are increasing investments in AI technology for developing innovative applications to improve retail customer experience and rising advent of new business models.
The market is anticipated to attain a CAGR of ~35% over the forecast period, i.e., 2022 – 2030.
Privacy issues associated with the use of AI are estimated to hamper the market growth.
Asia Pacific will provide more business opportunities for market growth owing to the increasing number of retail companies in the region taking up AI-oriented initiatives.
The major players in the market are Baidu Inc., Amazon Web Services, Inc., Intel Corporation, Interactions LLC, Lexalytics Inc., and others.
The company profiles are selected based on the revenues generated from the product segment, geographical presence of the company which determine the revenue generating capacity as well as the new products being launched into the market by the company.
The market is segmented by technology, component, deployment, application, and by region.
The natural language processing segment is anticipated to hold largest market size and is estimated to grow at a notable CAGR over the forecast period and display significant growth opportunities.
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