AI in Retail Market Booming Due to Increasing Adoption of Inventory and Supply Chain Optimization

"The AI in Retail Market reached US$ 28.7 billion in 2024 and is expected to reach US$ 197.3 billion by 2031, growing at a CAGR of 31.7% during the forecast period 2024-2031." As per DataM intelligence research report

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United States: Recent Industry Developments

✅ In July 2025, Walmart introduced a suite of AI-powered "super agents" that streamline shopping, operations, marketing, and development tasks.These agents include "Sparky," an AI assistant offering personalized product recommendations, order management, and computer-vision-based recipe ideas.This initiative supports Walmart's ambition for online sales to reach 50% of its total revenue in five years.

✅ In July 2025, Saks Global rolled out AI-powered personalization on Saks.com to tailor each shopper's homepage experience using machine learning. Initial tests showed a 7% increase in revenue per visitor and nearly 10% lift in conversions. Expansion of this feature across Neiman Marcus and Bergdorf Goodman is in the works.

✅ In June 2025, Lowe's began using AI and digital twin technology (via Nvidia's 3D Omniverse) to analyze customer behavior, forecast demand, and optimize in-store layout.AI enables Lowe's to adjust inventory and displays based on seasonal trends like weather-driven products. This has helped create a faster, more personalized shopping experience with reduced setup time.

✅ In March 2025, Old Navy debuted "RADAR" ba system using RFID, AI, and computer vision across 1,200 stores. It enables real-time inventory tracking and smoother omnichannel fulfillment with fewer out-of-stocks. Employees can now quickly locate and restock items, mimicking e-commerce efficiency in physical retail.

Japan: Recent Industry Developments

✅ In April 2025, Japanese convenience chains like FamilyMart and Lawson accelerated the rollout of unmanned stores using AI for self-checkout, entry systems, and automated restocking via camera and sensor tracking. Lawson's "walk-through payment" store at Nakamozu Station allows seamless entry, shopping, and checkout without scanning or lines. This automation addresses labor shortages while maintaining consumer convenience.

✅ In January-March 2025, Rakuten introduced high-performance Japanese large language models (LLMs) and its AI Link assistant to deliver chat-based customer support and hyper-personalized product recommendations. The rollout powers Rakuten's e-commerce and mobile platforms with next-gen personalization capabilities.

AI in Retail Market: Drivers

The AI in retail market is driven by rising demand for personalized shopping experiences and data-driven decision-making to enhance customer engagement. Retailers are adopting AI-powered recommendation engines, chatbots, and virtual assistants to improve customer service and conversion rates. Growing availability of consumer data from online platforms, mobile apps, and loyalty programs is fueling AI adoption for predictive analytics. Advancements in computer vision and natural language processing are enabling smarter inventory management and checkout-free stores. The push for operational efficiency and reduced costs is encouraging widespread integration of AI solutions across retail chains.

Market growth is further supported by the rapid expansion of e-commerce and omnichannel strategies requiring intelligent automation and customer insights. AI is increasingly being used for dynamic pricing, fraud detection, and demand forecasting to optimize profitability. Retailers are investing in AI-driven supply chain optimization to enhance real-time tracking, reduce waste, and meet consumer expectations. Integration of AR/VR with AI is enhancing immersive shopping experiences, both online and offline. Continuous innovation and partnerships between tech providers and retailers are accelerating AI adoption, driving the transformation of the global retail landscape.

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Segment Covered in the AI in Retail Market:

➥ By Anchor Deployment Type: Online, Offline

➥ By Technology: Interactive AI, Functional AI, Analytical AI, Text-based AI, Visual AI

➥ By Application: Supply Chain Logistics & Production, Sales & Marketing, Delivery Services, Payment Services, Customer Relationship Management, Security & Surveillance, Planning & Inventory

➥ By End User: Supermarkets, Hypermarkets, Other Sales Channels

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