London, March 11, 2020 (GLOBE NEWSWIRE) -- The Artificial Intelligence (AI) in retail market is expected to grow at a CAGR of 35.9% from 2019 to 2025 to reach $15.3 billion by 2025. The market growth is driven by growing awareness about modern technologies such as AI & big data analytics, and high adoption of multichannel or omnichannel retailing strategy in order to provide enhanced end-user experience to customers. Besides, several other benefits offered by artificial intelligence such as visual engagement and personalized experience, chatbots, and AI-powered voice recognition tools are also encouraging retailers to adopt artificial intelligence in their business. However, although the adoption of artificial intelligence in retail is on the rise, there is still a certain level of reluctance towards adopting new technologies. This coupled with high cost of procurement and lack of infrastructure may restrain the growth of artificial intelligence in retail market to certain extent.
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The need for new technologies and avenues to connect with consumers is transforming the traditional retail sector. Therefore, the retail industry is in the state of relentless competition to gain more customers, build customer loyalty, and boost business visibility. The digital revolution, particularly in the realm of artificial intelligence (AI) technology has energized its new phase by allowing companies to develop and offer targeted advertisements, online recommendation engines, chatbots, digital assistants, and many others.
Artificial Intelligence has become a key element in the digitalization of in-store retail by enhancing the customer end-user experience and creating a more engaged business-to-consumer interaction to improve productivity. Growing adoption of multichannel or omnichannel retailing strategy and increasing awareness and acceptance of various technologies by consumers are creating new revenue growth opportunities for the retail industry. Retailers who are continuously exploring new avenues for enhancing customer engagements and customer satisfaction are now increasingly exploring applications of artificial intelligence in their business.
Artificial intelligence technology in retail offers several benefits such as predictive merchandising, programmatic advertising, market forecasting, in-store visual monitoring & surveillance, and location-based marketing. In addition, the ability of AI solutions to enable next-level personalization, provide relevant recommendations to customers, improve retargeting strategies, and predict consumer behavior are also major driving factors for incorporation of AI in retail industry. Simplified accessible standards and protocols and introduction of artificial intelligence are increasingly helping consumers to make most appropriate decisions to ease off pressure from their daily hectic chores. Realizing the significance of artificial intelligence, the retail sector has now started to integrate artificial intelligence in their new projects in order to attract new breed of consumers inclined towards smart technologies. With enormous potential, artificial intelligence in retail industry is expected to transform the future of retail infrastructure in coming years.
Emerging economies such as Asia-Pacific and Latin America are likely to offer high growth opportunities for players operating in the artificial intelligence in retail market. Further, growing focus on complete flexibility and personalized customization are offering new growth avenues for AI in retail market in developing region. Rising technological innovations in blockchain and 5G coupled with artificial intelligence to provide greater efficiency, improved delivery, and highly flexible mobile payment systems are also expected to help the market growth during the forecast period.
In this study, the global artificial intelligence in retail market is segmented by product offering (solution (chatbot, customer behavior tracking, customer relationship management, inventory management, price optimization, recommendation engines, supply chain management, visual search, others) and services (managed, professional)), by application (predictive merchandising, programmatic advertising, market forecasting, in-store visual monitoring & surveillance, location-based marketing, others), by learning technology (machine learning, natural language processing, computer vision), by type ((online retail) and offline retail (brick & mortar stores, supermarkets & hypermarkets, specialty stores)), by end-user (fashion & clothing, food & groceries, electronics & white goods, health & wellness, automotive, others), and by deployment type (cloud, on-premise).
Based on product offering, AI solutions or platforms commanded the largest share of the overall artificial intelligence in retail market in 2019. 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.
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Based on application, predictive merchandising commanded the largest share the overall artificial intelligence in retail market in 2019. The large share has attributed to the growing demand for better inventory management, need to enhance customer experience, improve customer engagement, enable data-driven insights about customers.
Based on learning technology, machine learning commanded the largest share of the overall artificial intelligence in retail market in 2019. The large share 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.
Based on the type, offline retail commanded the largest share of the overall artificial intelligence in retail market in 2019. This is mainly driven by the increasing need for technological transformation to boost revenue and profitability. However, supermarkets & hypermarkets segment is expected to grow at the fastest CAGR during the forecast period, driven by growing competitiveness in the offline retail market segment.
Based on end-user, food & groceries commanded the largest share of the overall artificial intelligence(AI) in retail market in 2019. This is mainly due to the increasing consumer spending, incorporation of advanced technologies, and need to address consumer demands and enhance consumer experience.
Based on the deployment type, cloud-based AI solutions commanded the largest share of the overall artificial intelligence in retail market in 2019. The large share of this segment is attributed to the decrease in cost of cloud-enabling technology, growing usage of learning analytics, and increasing inclination toward cloud computing to enable cost-cutting.
Geographically, the global AI in retail market is segmented into North America (U.S. and Canada), Europe (Germany, France, U.K., Italy, Spain, and RoE), Asia-Pacific (Japan, China, India, and RoAPAC), Latin America, and the Middle East & Africa. North America dominated the global artificial intelligence(AI) in retail market, followed by Europe, Asia-Pacific, Latin America, and the Middle East & Africa.
Asia Pacific region is expected to witness the fastest CAGR during the forecast period. Presence of high growth economies, growing adoption of AI-based solutions and services among retailers, increasing digitalization in the region, and improving connectivity infrastructure are playing a significant role in the growth of AI technologies market in the region. In addition, growing accessibility to Internet of Things (IoT) enabled gadgets, growing disposable income, and favorable government initiatives in the region are also supporting the growth of artificial intelligence in retail market in the APAC region.
The global artificial intelligence in retail market is fragmented in nature and is characterized by presence of several low, mid, and high-level companies competing for the market share. Some of the leading companies in the AI in retail market are from the core technology background. These include Amazon.com, Inc. (U.S.), Google LLC (U.S.), Intel Corporation (U.S.), and Microsoft Corporation (U.S.). These companies are leading the market owing to their strong brand recognition, diverse product portfolio, strong distribution and sales network, and strong organic and inorganic growth strategies.
The other key players in the global artificial intelligence in retail are IBM Corporation (U.S.), Intel Corporation (U.S.), Microsoft Corporation (U.S.), Nvidia Corporation (U.S.), Oracle Corporation (U.S.), SAP SE (Germany), Salesforce.com, Inc. (U.S.), BloomReach, Inc. (U.S.), and many other local & regional players.
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Key questions answered in the report-
- What was the historical market growth for artificial intelligence technologies in retail across the globe?
- Which are the high growth market segments in terms of product offering, application type, learning technology, retail type, deployment type, and countries?
- What are the market forecasts and estimates for the period 2019-2025?
- What are the major drivers, restraints, opportunities, and challenges in the global AI in the retail market?
- How is the competitive landscape in the global artificial intelligence(AI) in retail market?
- Who are the major players in the global artificial intelligence in retail market?
- What are the recent developments in global artificial intelligence in retail market?
- What are the different strategies adopted by the major players in the global artificial intelligence(AI) in retail market?
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