Applied AI in Retail & E-commerce Market is expected to Grow with a CAGR of 15.38% through 2029

The applied AI in the retail & e-commerce market is expected to grow owing to the need for personalized shopping experiences, enhanced customer service through chatbots, data-driven inventory management, and optimized supply chain operations throughout the forecast period.

According to TechSci Research report, “Applied AI in Retail & E-commerce Market – Global Industry Size, Share, Trends, Competition Forecast & Opportunities, 2029”, the Global Applied AI in Retail & E-commerce Market was valued at USD 34.21 billion in 2023 and is expected to grow at a CAGR of 15.38% during the forecast period. The integration of applied AI in retail & e-commerce is driving a significant trend towards hyper-personalization and predictive analytic, which is revolutionizing the way retailers engage with customers. With the vast amount of data generated from user interactions, AI algorithms can analyze consumer behavior, preferences, and purchasing patterns to offer highly personalized shopping experiences. This trend is not just about recommending products based on past purchases; it’s about creating a tailored shopping journey that anticipates customer needs and desires before they even realize them. Predictive analytic, powered by AI, can forecast future buying behaviors by analyzing patterns in historical data, seasonal trends, and even external factors such as social media sentiment or economic conditions. This enables retailers to optimize inventory management, pricing strategies, and marketing campaigns, ultimately enhancing customer satisfaction and boosting sales. Moreover, personalization extends to dynamic content creation, where AI generates personalized product descriptions, advertisements, and even email campaigns that resonate with individual customers. This level of personalization is becoming increasingly crucial as consumers expect more relevant and engaging shopping experiences. Retailers that effectively leverage AI for personalization and predictive analytic can differentiate themselves in a crowded market, driving customer loyalty and increasing conversion rates. As this trend continues to evolve, we can expect AI to play an even more central role in shaping the future of retail & e-commerce, where customer experiences are not only personalized but also predictive, adaptive, and highly responsive to individual preferences and market dynamics.

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Based on the Application, the Customer Service & Support segment held the largest Market share in 2023. The Applied AI in Retail & E-Commerce Market, particularly in the Customer Service & Support segment, is driven by several transformative factors that are reshaping the industry landscape. As consumer expectations for personalized and efficient service continue to rise, retailers are increasingly turning to AI-driven solutions to enhance customer interactions. Advanced AI technologies, such as chatbots and virtual assistants, enable businesses to provide 24/7 support, addressing customer queries and issues in real-time without the constraints of human limitations. These AI tools are equipped with natural language processing (NLP) capabilities, allowing them to understand and respond to customer inquiries with high accuracy, thereby improving the overall customer experience. Additionally, AI systems can analyze vast amounts of customer data to offer personalized recommendations and solutions, creating a more engaging and relevant shopping experience.

This data-driven approach helps retailers anticipate customer needs and preferences, leading to increased customer satisfaction and loyalty. The integration of AI in customer service also streamlines operations by automating routine tasks, reducing the need for extensive human intervention, and minimizing operational costs. This efficiency is crucial for retailers aiming to maintain a competitive advantage in a rapidly evolving market.  AI-driven analytic provide valuable insights into customer behavior and service performance, enabling retailers to continuously refine their strategies and enhance service quality. The growing adoption of AI in customer service is also fueled by advancements in machine learning and AI algorithms, which are continually improving the capabilities of these technologies. As AI solutions become more sophisticated, their ability to handle complex customer interactions and deliver more nuanced responses enhances their effectiveness and appeal. The applied AI market in retail & e-commerce sector is experiencing robust growth as businesses recognize the strategic benefits of these technologies in driving customer satisfaction, operational efficiency, and overall competitiveness.

In terms of region, Asia-Pacific is the fastest growing region in the Global Applied AI in Retail & E-commerce Market. Countries like China, India, and Southeast Asian nations are at the forefront of this growth, adopting AI solutions to enhance customer experiences and streamline operations. With increasing internet penetration and a rising number of online shoppers, businesses in this region are leveraging AI to meet the dynamic demands of consumers, making the retail landscape more competitive and innovative. One of the key factors fueling this growth is the integration of AI technologies such as machine learning, natural language processing, and data analytics into retail strategies. Retailers are utilizing these technologies to personalize shopping experiences, optimize inventory management, and predict consumer behavior. For instance, AI-driven chatbots and recommendation systems are becoming commonplace, allowing retailers to engage customers in real-time and offer tailored suggestions based on individual preferences. This not only boosts sales but also fosters customer loyalty in an increasingly crowded marketplace. The growing investment in AI startups and initiatives within the region is further propelling its expansion in the retail sector. Governments and private sectors are recognizing the potential of AI to transform business operations and enhance productivity. As companies continue to explore innovative applications of AI—from automated supply chain management to enhanced customer service—Asia-Pacific is poised to lead the global applied AI in retail and e-commerce market, setting trends that other regions may follow in the coming years.

Major companies operating in the Global Applied AI in Retail & E-commerce Market are:

• NVIDIA Corporation
• Alphabet Inc.
• Microsoft Corporation
• IBM Corporation
• Salesforce Inc.
• Oracle Corporation
• SAP SE
• Adobe Inc.,
• Alibaba Cloud International
• Clarifai, Inc.

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“The Global Applied AI in Retail & E-commerce Market is expected to rise in the upcoming years and register a significant CAGR during the forecast period. The applied AI in retail & e-commerce sector offers substantial growth opportunities through advanced customer personalization, predictive analytic, and operational efficiencies. AI technologies empower retailers to deliver tailored recommendations, optimize inventory management, and enhance customer service via chatbots and virtual assistants. With AI-driven analytic, businesses can forecast market trends and consumer preferences, thereby refining marketing strategies and driving sales. AI facilitates the automation of routine processes, leading to reduced operational costs and increased efficiency. As the e-commerce landscape evolves, integrating AI solutions will be essential for retailers to maintain competitiveness and elevate customer experiences. Therefore, the Market of Applied AI in Retail & E-commerce is expected to boost in the upcoming years.,” said Mr. Karan Chechi, Research Director of TechSci Research, a research-based global management consulting firm.

“Applied AI in Retail & E-commerce Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented, By Technology (Machine Learning, Natural Language Processing (NLP), Computer Vision, Speech Recognition, and Predictive Analytic), By Application (Customer Service & Support, Sales & Marketing, Supply Chain Management, Price Optimization, Payment Processing, and Product Search & Discovery), By Deployment (On-Premises, and Cloud-Based), By End-User (Retailers, E-commerce Platforms, Consumer Goods Manufacturers, Logistics & Supply Chain Companies), By Region, By Competition, 2019-2029F”, has evaluated the future growth potential of Global Applied AI in Retail & E-commerce Market and provides statistics & information on the Market size, structure, and future Market growth. The report intends to provide cutting-edge Market intelligence and help decision-makers make sound investment decisions., The report also identifies and analyzes the emerging trends along with essential drivers, challenges, and opportunities in the Global Applied AI in Retail & E-commerce Market.

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