Factors such as the increasing focus of retailers on improving the shopping experience of customers, booming e-commerce sector, mounting investments being made in the AI domain, increasing proliferation of digital marketing strategies, and soaring online retail sales will help the AI in retail market demonstrate a robust CAGR of 40.5% between 2021 and 2030. Additionally, the rising number of complementary supportive government policies will also contribute to the market growth. The industry was valued at $1,714.3 million in 2021, and it is projected to generate $36,462.5 million revenue by 2030.
The growth of the e-commerce sector will supplement the market growth in the foreseeable future. A surge in the e-retailing sector can be primarily attributed to the rising internet penetration, mounting investments being made in the logistics industry, growing usage of smartphones, and surging use of alternate payment methods. To predict customer behavior and provide personalized services, e-retailing companies across the globe are deploying AI-enabled solutions for multiple applications and making huge investments in the AI field.
In recent years, the surging use of AI for multi-channel marketing has become a key trend in the AI in retail industry. Analysis of high-volume data generated through e-mail marketing, campaign management, and in-store customer behavior helps in the development of personalized campaigns and identification of consumption patterns, owing to which retailers can improve their decision-making process. To achieve these goals, retailers are using AI solutions for automating repetitive tasks, such as product labeling and data entry.
According to P&S Intelligence, the North American region accounted for the largest share in the AI in retail market in the preceding years. This is credited to the booming e-commerce sector and the increasing dependence of enterprises on digital marketing in Canada and the U.S. In addition, the high penetration of the internet and smartphones and the greater convenience offered with online shopping will also propel the market growth in the region.
Whereas, the APAC AI in retail market is projected to demonstrate the fastest growth throughout this decade. This will be on account of the rapid adoption of ML technology by online retailers in regional countries, especially China. Online retailers such as Amazon.com Inc., Alibaba Group Holding Limited, and JD.com Inc. are observing high sales in the region, due to the increasing use of price optimization solutions, AI-driven recommendation engines, and supply chain management solutions.
Thus, the booming e-commerce sector will fuel the demand for AI solutions from the retail sector, globally.