AI in retail market: boosting the industry expansion
According to a recent study from market research firm Graphical Research, the global AI in retail market size is set to register a significant growth during the forecast timeframe.
The public and private sector investments in advanced technologies like AI are rising at a robust rate. Investors have realised the power of AI and its anticipated deployment in myriad use-cases, thereby boosting the adoption of AI in retail stores. Discussed below is the region-wise view of the trends boosting the industry landscape:
North America (regional valuation to exceed $10bn):
Recommendation engine solutions may enhance customer experience:
Recommendation engine solutions held more than 25% share of the North America AI in retail market in 2020. High-end technologies, such as AI, machine learning, and data analytics are being heavily implemented across the retail sector.
With the aim to improve a customer’s shopping experience, the retailers are utilising recommendation engines to show filtered product suggestions according to the customer’s buying behaviour. These solutions use machine learning algorithms to show the most relevant products to the customers.
Use of natural language processing software in retail AI:
Natural Language Processing (NLP) technology is anticipated to register a CAGR of over 35% up to 2027. Retailers are using advanced software and tools to better understand their client’s purchasing habits, personality and behavior. NLP software helps the business owners automatically translate their customer’s native language.
Such tools are highly useful for retailers who are planning to expand their business globally. The software helps them customise their products according to their shopper’s buying tastes. It can perform various tasks, including part of speech tagging, speech recognition, natural language generation, and sentiment analysis.
The US is expected to hold a share worth $10bn of the regional AI in retail market by 2027. Governments and organisations are heavily investing in various AI technologies, with the former encouraging the SMEs to implement these advanced solutions.
Companies are focusing on creating AI-powered digital platforms to cater to varied end-user sectors in the country. For example, as per a report by the National Venture Capital Association, around 285 AI-based organisations raised funds worth $6.9bn in Q1 of 2020. This indicates the enormous growth prospects in store for the US industry share.
Asia Pacific (regional valuation to surpass $7bn):
AI chatbot solutions gain traction:
The Asia Pacific AI in retail market size from chatbot solutions will witness a CAGR of more than 45% through 2027. Highly interactive AI platforms and chatbots are being adopted across many retail chains. Chatbots have greatly reduced the costs associated with improving the customer experience and overall store maintenance.
These devices require minimal investments in their creation and maintenance. They offer immediate support to customers, cater to varying customer queries, and reduce long calling queues. These advantages can help the retail stores become more efficient and elevate a customer’s satisfaction level.
Adoption of professional services to enhance productivity:
Professional services will hold a significant share of the regional market by 2027. AI solutions are being highly used by retail business owners as they need to avail the professional services, such as expert consulting, integration and deployment, and maintenance services.
The services providers also offer customised solutions to their clients, such as test plans, software deployment, and product testing in labs. These professionals play an important role in solving various problems related to infrastructure integration and development.
Role of machine learning in retail AI:
Machine learning technology captured more than 35% share of the regional AI in retail market in 2020. Retailers aim to offer a personalised shopping experience to their clients to increase their brand value and customer base. This goal can be achieved by analysing large volumes of customer buying history.
The advent of machine learning has improved the productivity of retail and e-commerce sectors as they have become more personalised and accessible. It has played a key role in simplifying online shopping with the help of advanced algorithms, better search results, and refined search queries.
Europe (regional valuation to go past $5bn):
Use of visual search and listen solutions in retail AI:
The Europe artificial intelligence in retail market share from visual search and listen solutions may record more than 40% CAGR over 2021-2027. The concepts of online shopping and mobile commerce are gaining popularity among the end-users. These solutions help consumers search for their desired products by using images rather than speech or text. They analyse the image and suggest relevant products to elevate the customer’s experience.
Computer vision used for inventory management:
Computer vision secured over 15% share of the regional AI in retail market in 2020. This technology is being deployed in cameras and robots to ensure proper inventory management. Brick-and-mortar retailers are likely to use this technology in their devices to compete with the online counterparts. Facial recognition, shelf scanning, and footfall traffic and interaction analysis are the main applications of computer vision.