Artificial intelligence (AI) in retail market is poised to grow at a strong rate over the coming time period owing to rising penetration of ecommerce, growing need to improve customer experience and the visibility of inventory across retailers, and rising adoption of social media.
AI (Artificial intelligence) covers a broad-spectrum branch of computer science and is related with the building of smart machines that are capable of performing several tasks that usually require human intelligence. The algorithms of artificial intelligence are specifically designed to make better decisions, generally using real-time data.
In the retail industry digital transformations have been going on for several years. It has gradually increased speed, accuracy, as well as efficiency across every branch of the retail sector, all thanks to the predictive analytics systems and advanced data that are aiding companies to make data-driven business decisions.
Artificial intelligence assists retailers in enhancing demand forecasting, optimizing product placement, and making better pricing decisions. Hence, customers connect with the right kind of products in the right place and time. In fact, predictive analytics can also aid in ordering the right quantity of sock so that the stores do not end up with too little or too much. Artificial intelligence can further track data from numerous online channels, thus informing much better E-commerce strategies. In addition, novel types of artificial intelligence also help in recognizing the customer intent as well as optimizing the journey of shoppers.
Artificial intelligence (AI) in retail market is segmented in terms of component, technology, application, and regional landscape.
With respect to component, the AI in retail market is divided into service and solution. visual search & visual Listen, supply chain management, recommendation engines, price optimization, inventory management, CRM, customer behavior tracking, chatbots and others. Among these, chatbots segment will see a CAGR of around 40% over the forecast time period owing to growing demand to improve customer experience.
Likewise, the inventory management segment will witness a respectable CAGR of around 30% over the forthcoming time period. This projected growth is attributed to the growing need to improve the visibility of inventory across retailers.
In terms of application, the overall Artificial intelligence (AI) in retail market is bifurcated into data science, in store AI & location optimization, market forecasting, programmatic advertising, automated merchandising, and others. Programmatic advertising segment held a market share over 20% in 2020 and will witness strong growth owing to rising need to attract more customers.
Meanwhile, in 2020, the others segment held around 20% market share and is expected to follow a remunerative growth over the coming years. This anticipated growth is accredited to the rising penetration of social media.
From a regional frame of reference, AI in retail market in Middle East & Africa will witness a CAGR of around 40% over the forthcoming time period due to rising penetration of ecommerce in the region.