Global Statistics Representing Artificial Intelligence in Retail Market Scenario
Artificial Intelligence in retail market is expected to grow at CAGR of 38.5% during the forecast period, 2019–2026.
AI has become a cardinal element across various industry verticals for digitalization, especially in the retail segment. According to the World Economic Forum, e-commerce is on the verge of becoming the most important retail channel, driving 42% of consumption growth and 90% of the growth from mobile e-commerce. Thus, implementing advanced technologies in e-commerce, such as artificial intelligence, would offer better prospects for the retail industry in the coming years.
AI is predicted to unleash a digital disruption in retail with prominent industry players ramping-up their businesses. AI-powered solutions are increasingly becoming a priority for the food & beverage industry and retailers. Increasing investments across the globe for AI in retail are further expected to drive market growth. On February 2019, IBM and McCormick & Company announced a collaboration to develop new flavors using AI. Utilizing AI for product composition, McCormick will lead to a new era of flavor innovation. With this technological advancement, McCormick will produce more creative and better-tasting products, providing improved flavor experiences for its customers and flavor solutions business units.
Increasing customer expectations in terms of a personalized shopping experience, rapid digitalization, growing awareness, and the subsequent demand for enhanced productivity are some of the factors projected to drive the AI in retail market during the forecast period, 2019–2026.
The online segment is expected to hold a substantial share in the AI in retail market during the forecast period, owing to the dawn of e-commerce in online retailing. The online category includes the sale and purchase of Consumer-Packaged-Goods (CPG), Fast-Moving Consumer Goods (FMCG), electronic goods, apparels, and others purchased through mobile applications and websites. In a bid to enhance these services and attract a larger customer base, retailers are expected to embrace AI-powered solutions.
Retailers are adopting various business strategies to improve their solutions and services and ultimately, enhance customer experience. In line with this, they are investing in AI and automation services. For instance, in January 2019, Arm Limited launched a unified data management solution for retail, which would enable retailers to unify, manage physical in-store data, and securely combine digital customer data to obtain a complete view of shopper experience.
Machine learning, deep learning, and analytics are the key technologies in the AI in retail market. Traditional retail is expected to witness a dynamic shift, owing to the competitive environment, global awareness towards digital shopping, and preference of a vibrant customer base. Retailers are embracing technologies involving robotics, analytics, deep learning, and others in a bid to stay ahead of the competition and better meet customer expectations.
AI in retail optimizes the supply chain and customizes shopping experience with predictive modeling and micro-target. Additionally, the rising demand for solutions to track customer behavior among retailers is propelling market growth. Moreover, automated merchandising solutions help in tracking and analyzing customer purchasing behavior and provide applicable recommendations to escalate sales.
Geographically, the global artificial intelligence in retail market is segmented into North America, Europe, Asia Pacific, and Latin America and the Middle East & Africa (LAMEA).
North America is projected to experience dynamic growth in the AI in retail market, with AI emerging as a disruptive technology. Rapid advancements in technology and breakthrough innovations are restructuring the retail business. Technologies such as automation and AI-powered solutions are utilized to elevate businesses and improve customer relationships. The inclination of several companies in North America to invest in the AI for retail market to improve the customer shopping experience is enhancing the growth of the AI in retail market. According to Capgemini, 25% of the top 250 global retailers are integrating AI in their organizations.
In Europe, Retailers are expected to be the primary value creators. This has resulted in the adoption of advanced and innovative technologies among retailers for improved customer experience in the region. Additionally, increasing demand for predictive analysis and machine learning for retail is further expected to influence the AI in retail market in European region.
Market growth in Asia-Pacific will be driven by developing countries in the region. According to the India Brand Equity Foundation, India’s retail market is estimated to increase by 60%, reaching USD 1.1 trillion by 2020, owing to increased digital connectivity, rising disposable income, and changing lifestyle of individuals. Additionally, online retail sales are expected to grow at a rate of 31% year-on-year. Further, as per recent studies, China is expected to overtake the U.S. as the world’s top retail market in 2019.
The LAMEA region is expected to witness moderate growth in the AI in retail market, owing to the rising demand for enhanced customer experience. Additionally, the adoption of disruptive technologies such as AI in the region is projected to pave way for the AI in retail market during the forecast period, 2019–2026. Recent studies predict that retailing in emerging markets such as Africa or the Middle East region is on the rise, due to the increasing middle-class population, which is embracing modernization in the retailing sector.
Some of the key players in the global artificial intelligence in retail market are Accenture, Amazon Web Services Inc., Google Inc., Infosys Limited, Intel Corporation, IBM Corporation, Microsoft Corporation, Numenta Inc., NVIDIA Corporation, Oracle Corporation, Salesforce.com Inc., SAP SE, Sentient Technologies, and ViSenze Pte Ltd.
Artificial Intelligence in Retail Market Segmentation