According to a recent report by Grand View Research, Inc., the global artificial intelligence (AI) in retail market is projected to reach a value of USD 40.74 billion by the year 2030. This significant growth is expected to occur at a compound annual growth rate (CAGR) of 23.0% during the forecast period spanning from 2025 to 2030. The market’s expansion is largely being driven by the increasing integration of cutting-edge technologies such as chatbots, voice recognition systems, and other AI-powered solutions. These innovations are enhancing customer interaction and operational efficiency within the retail sector, thereby boosting the overall growth potential of AI in retail.Furthermore, the ongoing surge in online retail sales is accelerating the adoption of AI solutions as retailers aim to improve customer experiences and remain competitive in a rapidly evolving digital landscape. Retailers are increasingly focusing on personalized shopping experiences, precision-targeted marketing, and optimized operational workflows—all of which are being powered by AI. This focus is also supported by rising investments in AI research and deployment, along with favorable government regulations aimed at encouraging digital innovation in retail environments.
AI algorithms have become essential in processing and analyzing large volumes of consumer data collected through various digital touchpoints. These algorithms can assess patterns in online behavior to deliver insights that help retailers tailor their services to individual preferences. In addition, the adoption of AI-driven image and video analytics is gaining traction, particularly for the purpose of classifying and filtering visual content. This capability is proving useful in areas such as product categorization, inventory management, and targeted advertising, which in turn is stimulating further investments in AI technologies across both developed and emerging markets.
The use of AI in retail has proven effective in delivering superior customer engagement and operational outcomes, especially in virtual environments. These benefits are expected to further increase the demand for AI applications in the retail sector in the years ahead. A notable example includes Google LLC’s launch of "Product Discovery Solutions for Retail" in January 2021. This offering comprises a suite of services designed to enhance the e-commerce capabilities of retailers and deliver highly personalized experiences to consumers by leveraging AI technologies.
Among the various segments of the AI in retail market, image and video analytics are anticipated to capture a significant market share during the forecast period. This growth is attributed in part to the rising use of in-store promotional tools and the increased application of visual search technologies. For example, eBay has integrated AI to refine image-based searches, strengthen buyer-seller trust, and improve shipping efficiency. Similarly, Amazon is actively using AI to expand its visual search capabilities, implement facial recognition, and enhance customer service through automation.
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