ARTIFICIAL INTELLIGENCE IN RETAIL MARKET Size and trends

Artificial Intelligence In Retail Market Size and Trends

The Global Artificial Intelligence in Retail Market is estimated to be valued at USD 13.86 Bn in 2025 and is expected to reach USD 97.83 Bn by 2032, exhibiting a compound annual growth rate (CAGR) of 32% from 2025 to 2032.

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Artificial intelligence is helping retailers improve operations across key areas such as merchandising and supply chain planning. Techniques like machine learning and deep learning are enabling personalized product recommendations and predictive analytics.

Retailers are deploying AI-powered solutions such as computer vision, chatbots, and predictive analytics to enhance customer experience. AI technologies allow retailers to analyze shopping patterns and predict demand more accurately. They are also assisting in reducing inventory costs and improving supply chain efficiencies. The growing customer demand for personalized experiences is further driving retailers to adopt AI at scale across their operations.

Inventory Management and Supply Chain Optimization

One of the key drivers of artificial intelligence adoption in the retail industry is the potential it shows to optimize inventory management and supply chain processes. With AI, retailers can now analyze past sales data patterns and use predictive analytics to forecast consumer demand trends and purchase behaviour more accurately. This helps them in planning inventory levels according to anticipated sales and avoid situations of stockouts as well as overstocking. With precise demand forecasting, retailers save huge costs associated with holding excess inventory, disposing unsold items, and lost sales opportunities due to stockouts.

AI applications like computer vision and machine learning algorithms are also enabling retailers to optimize supply chain operations from sourcing to distribution. Tools like inventory tracking using image recognition and predictive analytics for replenishment automatically identify low stock items on shelves and replenish them before running out. This enhances on-shelf availability and improves customer satisfaction without needing manual checks. Similarly, demand forecasts combined with the optimization of transportation routes is reducing logistics costs for retailers significantly. Systems can now calculate the most efficient routes by consolidating deliveries and maximizing truck capacity utilization.