According to Global Artificial Intelligence in Retail Market Report 2022, by 2025, e-commerce sales are expected to reach $7.3 trillion, which will drive the AI in retail market value to $36,462.5 million by 2030.
The “Artificial Intelligence in Retail Market Research Report: By Offering, Technology – Global Industry Analysis and Growth Forecast to 2030” report has been added to ResearchAndMarkets.com’s offering.
The report states that retailers are using AI to offer personalized services, and product recommendations, as well as to predict consumer behavior. AI is also being leveraged by e-commerce platforms for accurate demand forecasting, supply chain planning, and real-time customer intelligence gathering.
Recommendation Engines
Among all the AI solutions designed for retailers, recommendation engines are the most popular. Online retailers are using them to study customers’ activity on the internet and recommend related products and services based on it. Since marketing everything to everyone, like in TVs and newspapers, doesn’t always give the desired returns, retailers are marketing only the products and services that customers are interested in, using recommendation engines.
The Pandemic Accelerated AI in Retail
The COVID-19 pandemic has accelerated such activities, thus affecting the AI in the retail market positively. In 2020, lockdowns forced people inside their homes, which led to a sharp surge in the number of online shoppers. As per the United Nations, the top 13 online shopping platforms witnessed an over 20% increase in sales in 2020.
In the coming years, the aftereffects of the pandemic will drive AI in the retail market at the highest rate in Asia-Pacific (APAC). As per the UN, most of the 13 companies that witnessed the massive jump in sales in 2020 were based in the U.S. and China.
Moreover, online sales in China, Australia, and Singapore in 2020 grew by 24.9%, 9.4%, and 11.7%, respectively, faster than in 2019. This is also credited to the increasing sale of smartphones and rising penetration of the internet here.
Key Findings of AI in Retail Market Report
- In the coming years, the demand for related services will rise faster among retailers adopting AI solutions. Services offered by AI vendors include data management, software monitoring, training, and system maintenance and support.
- Machine learning is the most widely used technology among AI in retail market end-users as it allows them to enhance customers’ shopping experience by making accurate purchase recommendations.
- Natural language processing (NLP) is another popular AI technology among retailers because it understands and processes human language, thereby allowing users to offer personalized shopping experiences.
- Moreover, AI is now being utilized for marketing via multiple channels, primarily to analyze in-store consumer behavior and for e-mail marketing and campaign management.
- Seeing the vast benefit AI offers, major retailers are increasing their investments in allied technologies. For instance, IKEA has acquired Geomagical Labs, which offers augmented reality and AI solutions. Similarly, in April 2019, Reliance Jio Digital Services Ltd. finalized plans for the acquisition of an 87.0% stake in AI-driven conversational platform Haptik Inc.
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