Artificial Intelligence in Retail Market Projected To Hit $164 Billion by 2030: AI Is Here To Stay

Artificial intelligence (AI) has been making headlines for years now. Whether it’s a discussion over Nvidia’s latest stock price surge, the proliferation of ChatGPT and similar large language models (LLMs) into nearly all business sectors, or simply how interesting it is to toy around with AI image generators like Midjourney — or AI music generators like Suno — it’s plain to see that AI isn’t going anywhere.

That’s especially true of AI’s integration within the broader retail market. According to a recent report by MarketsandMarkets, as outlined by GlobeNewswire, the AI in retail market is set to quickly expand over the next few years.

Artificial Intelligence in Retail Market: Can It Really Be Worth $164 Billion by 2030?

Per the MarketsandMarkets report, the AI in retail market is projected to be worth a staggering $164.74 billion by 2030. Bolstered by projections of a compound annual growth rate (CAGR) of 32%, an impressive number by any standard, the market that today is worth an estimated $31.12 billion will continue its rampant increase in size and scope.

The report went on to summarize key areas in which AI-driven improvements will aid the retail industry, including:

• Expansion of omnichannel retail opportunities
• Improvement of inventory and supply chain organizational capabilities
• Improved retail cybersecurity mechanisms
• Adoption of AI customer service tools to provide tailored, personalized advice or recommendations

MarketsandMarkets also noted that North America was the main player in this emerging market.

“North America dominates due to the high adoption of these platforms in the United States and Canada. The region has large technological companies, research facilities, and start-ups actively developing AI technologies. The AI in retail market in North American enterprises is experiencing high growth due to the rising AI awareness and the need for better customer experiences and operational productivity,” the intelligence and market research platform stated.

Artificial Intelligence Is Not a Fix-All Solution, But It Is a Retail Sector Reality

The reality of today’s retail sector — and tomorrow’s — is that AI is here to stay, as SAP marketing lead Amanda Spencer wrote for Forbes. Spencer indicated that, per an Analytics Insight report, a full 80% of retail executives believe their companies would be utilizing AI tools (in particular, intelligent automation) by 2025.

Further, Spencer gestured toward a Statista analysis showing that retailers that embrace artificial intelligence and machine learning tools perform better than those opting out.

Spencer suggested six primary categories in which AI integration would be nigh-essential to any large-scale retailer: inventory management, demand forecasting, route planning, price optimization, assortment planning, and personalization.

“We all know that the new frontier for retail success is personalization, but we face digitally savvy shoppers with constantly changing preferences who expect shopping experiences that are tailored, instant, and effortless. AI is the ultimate tool for delivering on these expectations, with its ability to intuitively understand customer desires and craft personalized services,” Spencer wrote.

“By using artificial intelligence to refine their operations and engagement models, retailers can position themselves to thrive in a digital-centric commerce environment,” she added.