AI is gradually taking over the retail industry.
Recently, retailers are discovering the power of AI and incorporating it into their businesses.
They are leveraging the power of AI to revolutionize shopping experiences, optimize operations, and drive growth.
For example, 85% of industry professionals believe AI-powered data analytics will enable more sophisticated customer targeting.
Fascinating, right?
There are more intriguing AI in retail statistics to check out in this article.
Keep reading to see what the future holds for AI in the retail industry.
AI In Retail Statistics
1. The global AI in retail market size was valued at U.S. $7.14 billion in 2023.
(Fortune Business Insights)
According to a report, the market size is expected to grow at a CAGR of 31.8% between 2024 and 2032, from U.S. $9.36 billion in 2024 to U.S. $85.07 billion in 2032.
2. By 2026, 80% of retailers will be using AI in some form to improve their business operations
(Gartner)
AI will play an increasingly crucial role in retail as businesses recognize its potential to enhance various aspects of their operations.
For instance, retailers might employ AI-driven chatbots to provide personalized shopping recommendations to customers. Machine learning algorithms can also help businesses optimize pricing strategies and product assortments.
As retailers seek to stay competitive in a rapidly evolving market, it’s clear that many are turning to AI as a powerful tool to enhance efficiency, boost customer engagement, and drive growth.
3. 80% of retail executives will adopt AI within the next three years.
(Content at Scale)
4. 78% of surveyed retail executives plan to invest from $500,000 to $5 million in AI in 2024.
(Chain Storeage)
Over the years, retail executives have gradually trusted AI to revolutionize their businesses.
These executives recognize AI’s competitive edge, streamlining operations, enhancing customer experiences, and providing valuable data-driven insights.
5. Approximately half (49%) of retail respondents believe AI offers “substantial” benefits.
(Chain Storeage)
Of these respondents, 51% said AI benefits include innovation, 49% said reduced risk, 45% said increased sales, and 43% said AI helps with marketing campaign personalization.
6. Generative AI can potentially increase retail profitability by 20% by 2025.
(EY)
Generative AI involves algorithms capable of creating new data based on existing information.
It can revolutionize product design and development, enabling retailers to generate new, unique designs or product variations based on customer preferences and market trends.
Additionally, it could streamline supply chain operations, helping businesses forecast demand more accurately and optimize their inventory levels accordingly.
7. 71% of retail companies in India intend to implement it within the next year, demonstrating its perceived value.
(EY)
8. 88% of retail respondents believe Gen AI will have a medium to high impact on their retail businesses.
(EY)
9. AI is expected to improve retail efficiencies by +59% by 2035.
(Knight Frank)
AI can drive efficiencies across various aspects of retail operations.
For instance, AI-powered demand forecasting can help retailers better predict customer preferences and buying patterns. This enables them to optimize their inventory levels and reduce waste.
In the supply chain, AI can streamline logistics and transportation processes, reducing delivery times and costs.
AI can also enhance customer experiences, using data-driven insights to provide personalized product recommendations.
10. 50% of retailers already claim to use AI “in some form.”
(Knight Frank)
However, only 28% consider AI a top investment priority, and 40% lack the funds to implement AI strategies.
11. 65% of retailers say they understand AI “well” or “very well.”
(Knight Frank)
Retailers are increasingly aware of AI’s potential benefits and applications within their industry and are actively seeking to stay informed and educated on the subject.
Retailers who understand AI technology can better identify opportunities to implement it, whether through advanced analytics, automated processes, or personalized customer experiences.
12. One-third of UK consumers believe customer service has deteriorated, and 50% cite chatbots as a source of frustration.
(Knight Frank)
In the UK, some consumers are dissatisfied with their customer service experiences, particularly with chatbots.
Many businesses have adopted chatbots to provide customer support and improve efficiency. However, these chatbot’s performance could be better than customer expectations.
It is expected due to chatbots’ inability to understand complex queries or provide accurate solutions. There’s also the perceived lack of empathy.
Chatbots only respond to preprogrammed queries, so customers can become frustrated when they receive a valuable response to their unique query.
13. According to reports, 67% of retailers have ‘clear AI investment plans.’
(Knight Frank)
More retailers are seeing the value of AI and the possibilities of incorporating it into their business operations.
AI in business operations enhances efficiency, reduces costs, and provides a competitive edge in an ever-evolving market. It also revolutionizes customer experience through personalized services and streamlined processes.
However, 40% see a lack of available funding as the second most significant barrier to implementation.
14. Over 60% of retail respondents plan to increase their AI infrastructure investment in the next 18 months.
(Nvidia)
15. Over 50% of retail respondents prefer to deploy a hybrid approach or their AI solution.
(Nvidia)
Retailers aim to capitalize on cloud-based AI services’ scalability, cost-effectiveness, and robustness while maintaining control, security, and customization from on-premises deployments.
16. 42% of surveyed retailers already use AI, and 34% are assessing or piloting AI initiatives.
(Nvidia)
However, 14% lack AI technologies relevant to their business needs.
17. Larger retailers with annual revenues exceeding $500 million reveal a more pronounced trend: 64% already use AI, 55 percent more than the total retail industry adoption rate.
(Nvidia)
18. 54% of surveyed retailers say they have adopted more than 6 AI use cases in their business.
(Nvidia)
From streamlining inventory management to enhancing personalized marketing, these numerous use cases highlight AI’s adaptability and transformative potential in the retail sector.
16% of retailers have only adopted AI in 1 or 2 use cases. The remaining 30% have done so in 3 – 5 use cases.
19. Of respondents currently using AI, 69% believe AI has contributed to an increase in their annual revenue.
(Nvidia)
28% reporting an increase between 5
and 15 percent and an additional 15% reporting a rise above 15 percent.
C-suite executives reported even more robust results, with 57% asserting that AI has driven both an annual revenue increase and an operating cost
decrease above 15%
20. Among all retailers, 68% invested less than $5 million in AI infrastructure in 2023.
(Nvidia)
21. 75% of retail decision-makers believe that generative AI is an important way for retailers to reinvent themselves.
(PR Newswire)
Generative AI’s ability to create original content, such as tailored product designs and personalized marketing materials, helps retailers enhance customer experiences and drive innovation.
As more retailers recognize the significance of generative AI, its impact will redefine the very essence of retail and propel the industry toward a future brimming with untapped possibilities.
22. 59% of surveyed retail executives want to use generative AI to streamline customer service with less human intervention.
(PR Newswire)
These retail executives want to use AI to provide conversation summaries, automate tasks, and drive conversion.
- 49% of respondents want generative AI to speed up product categorization and create compelling customer-centric marketing copy.
- 44% want to use generative AI to empower retail creative teams to curate unique images and innovative content for campaigns.
- 40% of retail decision-makers want to use generative AI to provide interactive responses to shopper inquiries.
- 38% want to use generative AI to create internal knowledge articles from existing data sources automatically.
23. Almost 60% of businesses rely on fully automated AI-powered marketing campaigns to deliver customer content.
(Retail Economics)
AI technology optimizes marketing strategies by analyzing consumer behavior, anticipating customer needs, and tailoring content accordingly.
As AI’s prowess in data-driven personalization advances, businesses increasingly entrust it with curating engaging and impactful marketing campaigns.
24. 54% of retail marketers use AI-driven personalization across channels to drive business growth.
(Retail Economics)
Multichannel marketing leverages various platforms, like email, social media, and mobile apps, to engage with customers.
AI automates tasks such as data analysis and content distribution, enabling marketers to focus on crafting creative strategies that foster meaningful connections with customers.
AI-driven insights guide marketers in allocating resources effectively, ensuring maximum return on investment for each channel.
The AI technology automates tasks such as data analysis and content distribution. This enables marketers to focus on crafting creative strategies that foster meaningful connections with customers.
25. After launching generative AI deployments in 2023, 72% of retail executives were pleased with their performance and outcomes, while approximately 28% were not.
(PR Newswire)
26. Almost 70% of retail companies surveyed said virtual assistants would be one of the industry’s most disruptive forces.
(Retail Economics)
Virtual assistants engage customers in personalized interactions, breathing new life into shopping experiences.
Retailers embracing virtual assistants discover opportunities to enhance customer service, provide round-the-clock support, and foster loyalty through tailored product recommendations.
Additionally, virtual assistants help streamline operations and reduce costs by automating tasks like inventory management.
27. North America dominated the AI retail market in 2023.
(Fortune Business Insights)
However, the Asia Pacific is projected to have the highest growth rate. China secured a 23.4% share of AI investments in its commerce and retail industry. Thus, the investments are expected to reach U.S. $18.8 billion by 2027.
28. Over 53% of retailers stated that they would prioritize AI investment in their warehousing and distribution divisions.
(Retail Economics)
However, 46.9% said they wanted to improve their buying and merchandising with AI.
29. Nearly 85% said they thought that AI-powered data analytics would enable more sophisticated targeting of customers.
(Retail Economics)
With machine learning and AI-powered data analytics, retailers can “mine” through a vast consumer data collection, discovering patterns and preferences.
From the insights they have gotten, retailers can craft more precise and effective marketing strategies.
And in turn, they’ll foster deeper connections with their customers and drive growth.
30. Over 50% of retailers and consumer brands believe AI-powered inventory management systems will improve demand planning, replenishment, and stock rotation.
(Retail Economics)
Two-thirds of shoppers said they would visit a store if they could check real-time product availability online beforehand.
31. According to a survey of retail and consumer brands, 36% believe autonomous vehicles will significantly impact the industry.
(Retail Economics)
FAQs
What Percentage of Retailers Use AI?
According to Statista, almost 40% of retail directors say they used artificial intelligence (AI), computer vision (CV), and machine vision (MV) for selected operations and departments.
How Big is the Retail Market for Artificial Intelligence?
The retail market for artificial intelligence is currently worth $9.36 billion in 2024. It is expected to rise to U.S. $ 85.07 billion in 2032
How is AI Used in the Retail Industry?
AI assists retailers with demand forecasting, pricing decisions, and product placement.
How has AI Impacted the Retail Industry?
AI impacts the retail industry by automating many traditionally manual and labor-intensive tasks associated with running a successful business.
Retailers can use AI-powered automation to cut costs while increasing efficiency, accuracy, and customer experience.
Sources:
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