Redding, California, Jan. 19, 2022 (GLOBE NEWSWIRE) — According to a new market research report titled “Artificial Intelligence in Retail Market by Product Offering, Application (Predictive Merchandizing, Programmatic Advertising), Technology (Machine Learning, Natural Language Processing), Deployment (Cloud, On-Premises), and Geography — Global Forecast to 2027”, published by Meticulous Research®, the Artificial Intelligence in retail market is expected to grow at a CAGR of 34.4% from 2020 to 2027 to reach$19.9 billion by 2027.
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The growing number of millennials with their inclination towards digital-first approaches is putting organizations under constant pressure to innovate; thus, making artificial intelligence a top priority for retail businesses. Implementation of artificial intelligence in retail industry is completely transforming the traditional retail experience and taking it to the next level with automation, personalization, and increased productivity of retail operations. Artificial intelligence in retail can be defined as the process of gathering and analyzing massive amounts of data that help companies to create personalized shopping experiences for customers via recommendation engines, highly structured web shops, intelligent in-store bots and chatbots. These solutions also assist retailers in supply chain optimization, price optimization, and market forecasting, among others.
The growth of the overall AI market in retail is primarily attributed to the growing awareness about AI and big data & analytics, adoption of multichannel or omni-channel retailing strategy, need to enhance the end-user experience and improve productivity. In addition, increased adoption of AI-powered voice-enabled devices and growing number of smartphones are further contributing to the market growth. Rising focus on blockchain and adaptation of 5G technology in retail industry are the new trends in the market. However, high cost of procurement and lack of infrastructure may hinder the market growth. Moreover, concerns over privacy and identity of individuals, and lack of awareness about AI technology, is considered a challenging factor affecting the market’s growth.
Growing awareness about AI and big data & analytics to propel the growth of the market
Various established retailers across the globe are struggling with increasing cost, dissatisfied customers, declining sales, and upstart competition. This has prompted retailers to adopt technological tools to improve operational efficiency and enhance customer interactions. Several areas in retail industry, such as inventory management, supply chain management, marketing and branding, and customer relationship management, offer significant potential of technological transformation and thereby enable retailers to improve overall productivity and profitability.
Artificial intelligence in the retail industry revolves around the way businesses have been operated over the last several decades. Artificial intelligence (AI) and big data & analytics is the key to digital business; it has the potential to transform everything from business operations to the customer experience. Owing to the surging penetration of smart devices and applications, proliferation of IoT, adoption of cloud services, and advancements in technology the overall awareness and adoption of AI and big data analytics in the retail industry has been on the rise.
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Targeted advertisements, predictive merchandizing, online recommendation engines, price optimization, chatbots, digital assistants, demand forecasting, in-store visual monitoring and surveillance, and supply chain optimization are some of the widely explored use cases for AI in the retail industry. According to a leading research firm, the spending on artificial intelligence systems led by banking and retail industries is expected to cross $5 billion over the coming years, with a majority of it targeted towards automated customer service agents and product recommendation engines. Also, according to a report published by PwC, around 20% of the U.S. organizations plan to deploy enterprise-wide artificial intelligence solutions for service personalization and increasing convenience for customers. The big data analytics market for retail industry is also expected to grow at a CAGR of 15.2%, delivering a strong growth potential for AI solutions and platforms over the coming years.
To provide efficient analysis, Meticulous Research® has segmented the overall AI in retail market based on product offering, application (predictive merchandizing, programmatic advertising), technology (machine learning, natural language processing), deployment (cloud, on-premises), and geography.
Based on product offering, the AI solutions or platforms segment commanded the largest share of the overall artificial intelligence in retail market in 2021. The large share is attributed to rapid adoption of AI-powered solutions by retailers as it enables them to identify personalized customer needs, provide product recommendations, enhance customer experience, reduce shrinkage by improving loss prevention at point-of-sale, and reduce shoplifting in retail industry.
Based on application, the predictive merchandising segment commanded the largest share of the overall artificial intelligence in retail market in 2021. The large share of this segment is mainly attributed to the growing demand for better inventory management, need to enhance customer experience, improve customer engagement, and enable data-driven insights about customers. Also, it provide retailers with valuable customer insights; for instance, recognizing high-value customers, their motives behind the purchase, their buying patterns behaviors in the retail industry; thereby, driving the growth of the market.
Based on learning technology, the machine learning segment commanded the largest share of the artificial intelligence in retail market in 2021. The large share of this technology sgment is attributed to the increasing use of machine learning technology in customer experience management, customer behavior tracking, predictive merchandising to engage customers, and increasing productivity. Also, machine learning offers better prediction of sales, personalized product recommendations for advertising and promotions. These are some of the key factors driving greater adoption of machine learning technologies in the retail industry; thereby, driving the growth of the market.
Based on the type, the online retail segment commanded the largest share of the artificial intelligence in retail market in 2021. This is mainly driven by the growing competitiveness in the online retail market segment, changing consumer behavior towards online shopping, online marketplaces, e-commerce platforms and increasing need for technological transformation to boost revenue and profitability.
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Based on end-user, the food & groceries segment commanded the largest share of the artificial intelligence in retail market in 2021. This is mainly due to the increasing consumer spending, incorporation of advanced technologies, and need…