Artificial Intelligence in Retail Market Outlook: Smart Customer Experience and Growth Opportunities

According to IMARC Group's latest research publication, The global artificial intelligence in retail market size was valued at USD 14.16 Billion in 2024. Looking forward, IMARC Group estimates the market to reach USD 76.44 Billion by 2033, exhibiting a CAGR of 18.70% from 2025-2033.

How AI is Reshaping the Future of the Artificial Intelligence in Retail Market

• Hyper-Personalized Shopping Experiences: AI-driven recommendation engines analyze individual behavior and preferences in real time, helping retailers boost conversion rates and customer loyalty. Salesforce's Commerce Cloud AI agents, for instance, tailor interactions across both B2B and B2C channels simultaneously.
• Intelligent Inventory and Demand Forecasting: Machine learning models reduce overstock and stockout scenarios by accurately predicting demand. Retailers using AI-powered forecasting have achieved inventory cost reductions of 25–40%, while cutting waste and improving shelf availability significantly.
• Automated Customer Service at Scale: AI chatbots and virtual assistants handle complex customer queries around the clock. Avis's AI-powered WhatsApp assistant, for example, autonomously resolves 70% of customer queries, delivering 39% cost savings in under a year.

Explore Updated 2026 Market Trends & Analysis

Artificial Intelligence in Retail Industry Overview

North America leads the global AI in retail market with over 35.6% share, fueled by advanced digital infrastructure, high AI adoption rates, and the concentration of major tech companies driving retail innovation. US retail AI spending is expected to reach USD 9.2 billion by end-2025, while Walmart has already deployed AI-powered shelf scanners across 1,500 stores for real-time inventory management. The EU AI Act, which entered into force in August 2024, is further shaping how retailers across Europe responsibly deploy AI, creating a globally influential regulatory template.

Artificial Intelligence in Retail Market Trends & Drivers

Surging Demand for Personalization is Pushing AI to the Center of Retail Strategy Consumers now expect tailored experiences across every touchpoint — and retailers are responding fast. According to IBM, 3 in 5 consumers want AI-powered assistance while shopping, yet only 9% say they're satisfied with the current in-store experience. Retailers leveraging AI for personalization report 5–15% annual revenue growth and up to 30% reduction in marketing costs. With 77% of eCommerce professionals using AI tools daily — up from 69% — personalization has shifted from a differentiator to a baseline expectation.

Automation and Operational Efficiency are Driving Measurable Cost Savings AI is fundamentally changing how retailers run their operations behind the scenes. From robotic process automation in warehouses to generative AI tools for product content creation, the efficiency gains are tangible. Retailers now allocate roughly 20% of their technology budgets to AI — up from 15% — and 72% of those who have deployed AI report a measurable decrease in operating costs. UST's Retail GenAI platform, launched at the London Innovation Lab, exemplifies this shift, enabling retailers to embed AI-powered search, automation, and decision-making into daily operations at scale.

Government Initiatives and Digital Infrastructure Investments are Accelerating Adoption Policy support is acting as a significant growth accelerator. The US government's "Partnership for Global Inclusivity on AI" promotes responsible deployment, while Canada's AI Supercluster Program is specifically boosting smart retail innovation. In Germany, Aldi Nord cut food waste by 25% across 700 stores using AI-based inventory forecasting, aligned with the country's Digital Strategy 2025. Meanwhile, China's New Infrastructure Plan and India's rapid UPI-led digital commerce expansion are propelling Asia-Pacific adoption, making the region the fastest-growing AI retail market globally.

Leading Companies Operating in the Global Artificial Intelligence in Retail Industry

• Alibaba Group Holding Limited
• Amazon.com Inc.
• Bluecore Inc.
• Capgemini SE
• Centric Software Inc. (PTC Inc.)
• Fujitsu Limited
• Google LLC (Alphabet Inc.)
• Huawei Technologies Co. Ltd.
• International Business Machines Corporation
• Intelicheck
• Intelligence Node
• LTIMindtree Limited
• Microsoft Corporation
• NVIDIA Corporation
• Oracle Corporation
• Salesforce Inc.
• SAP SE
• SAS Institute Inc.
• Sentient Technologies Holdings Limited

Artificial Intelligence in Retail Market Report Segmentation

By Component:

• Solution
• Service

Solution stands as the largest component, holding 62% of the market share in 2024, driven by strong demand for scalable AI tools including ML algorithms, CRM platforms, and inventory management software.

By Technology:

• Machine Learning
• Natural Language Processing
• Chatbots
• Image and Video Analytics
• Swarm Intelligence

Machine Learning holds the biggest share, as it powers demand forecasting, pricing optimization, fraud detection, and personalized recommendation engines across retail formats.

By Type:

• Online Retail
• Offline Retail

Online retail holds a significant share, driven by AI integration into e-commerce platforms for personalization, logistics optimization, and fraud detection. Offline retail is also rapidly catching up, with AI enabling in-store navigation, smart checkout, and real-time inventory insights.

By Application:

• Customer Relationship Management (CRM)
• Supply Chain and Logistics
• Inventory Management
• Product Optimization
• In-Store Navigation
• Payment and Pricing Analytics
• Virtual Assistant
• Others

Customer Relationship Management (CRM) represents the largest application segment, accounting for 27.6% of the market in 2024, as retailers prioritize AI-powered tools to personalize interactions, predict buying behavior, and automate client engagement at scale.

Regional Insights

• North America (United States, Canada)
• Asia Pacific (China, Japan, India, South Korea, Australia, Indonesia, Others)
• Europe (Germany, France, United Kingdom, Italy, Spain, Others)
• Latin America (Brazil, Mexico, Others)
• Middle East and Africa

North America exhibits clear dominance in the AI in retail market, holding over 35.6% of global share in 2024, supported by a mature technology ecosystem, high digital retail penetration, and significant investment from major AI vendors.

Recent News and Developments in the Artificial Intelligence in Retail Market

• January 2025: Salesforce unveiled two major AI retail innovations — Agentforce for Retail and Retail Cloud with Modern POS — designed to boost productivity for store associates, customer service teams, and digital merchants while delivering more personalized shopping experiences at scale.
• January 2025: Everseen partnered with Google Cloud to deploy computer vision technology in brick-and-mortar retail stores, using the Vertex AI Platform and Google Distributed Cloud to process in-store visual data in real time, delivering instant operational alerts and insights.
• January 2025: Reliance Retail in India adopted AI chatbots for JioMart, enabling multi-language customer service and dynamic pricing management — reflecting the rapid acceleration of AI in retail across Asia-Pacific's mobile-first markets.
• October 2024: Microsoft and Rezolve AI announced a strategic partnership integrating Rezolve's Brain Suite with Microsoft Azure, giving retailers advanced AI-powered commerce capabilities for digital engagement and operational efficiency.
• October 2024: Aldi Nord deployed AI-based inventory forecasting across 700 locations in Germany, achieving a 25% reduction in food waste — a benchmark case for AI-driven sustainability in retail operations aligned with Germany's Digital Strategy 2025.

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