Artificial Intelligence (AI) in Retail Market Report 2026

The artificial intelligence (AI) in retail market size has grown exponentially in recent years. It will grow from $15.4 billion in 2025 to $20 billion in 2026 at a compound annual growth rate (CAGR) of 29.9%. The growth in the historic period can be attributed to growth of e-commerce platforms, increasing retail data volumes, adoption of cloud-based retail systems, demand for improved customer experience, reduction in operational inefficiencies.

The artificial intelligence (AI) in retail market size is expected to see exponential growth in the next few years. It will grow to $57.06 billion in 2030 at a compound annual growth rate (CAGR) of 30%. The growth in the forecast period can be attributed to expansion of omnichannel retail strategies, rising investment in AI-powered analytics, growing demand for real-time consumer insights, increasing automation of retail operations, scalability of cloud-native ai solutions. Major trends in the forecast period include hyper-personalized customer engagement, real-time inventory optimization, AI-driven dynamic pricing strategies, computer vision-enabled in-store analytics, conversational commerce adoption.

The digital transformation in the retail industry is expected to propel the growth of artificial intelligence (AI) in the retail market going forward. Digital transformation refers to the comprehensive and strategic integration of digital technologies, processes, and capabilities across various aspects of an organization. Retailers globally are adopting digital processes and enhancing customer experiences, resulting in an increased demand for AI solutions. This integration of AI in retail, driven by the imperative of digital transformation, fosters innovation in tasks such as automation, personalized marketing, and trend prediction, improving operational efficiency and providing insights into customer behavior. For instance, in January 2024, according to a survey of 400 respondents conducted by NVIDIA Corporation, a US-based manufacturing and technology company, 69% of retailers reported increased annual revenue with AI adoption, 72% experienced lower operating costs, and over 60% plan to boost AI investments in the next 18 months. Therefore, the digital transformation in the retail industry is driving the growth of artificial intelligence (AI) in the retail market.

Major companies operating in the artificial intelligence (AI) retail market are developing advanced technologies, such as cloud-based solutions, to drive innovation and enhance efficiency in the retail sector. Cloud-based solutions refer to computing services, including storage, processing, and software applications, that are delivered over the internet (cloud) instead of relying on local servers or traditional computing infrastructure. For instance, in October 2023, Flipkart Private Limited, an India-based e-commerce company, launched Flipkart Commerce Cloud, which aims to help retailers across the world grow their businesses and solve business needs through intelligent and AI-driven solutions. This platform offers retail technology solutions for international retailers, marketplaces, and e-commerce platforms. The suite of solutions includes a complete marketplace technology stack, retail media solution, pricing solution, inventory management, and forecasting solutions, all built using artificial intelligence and machine learning.

In July 2023, ServiceNow Inc., a US-based provider of digital workflow solutions, acquired G2k Group Gmbh for approximately $0.5 billion. This acquisition is aimed at boosting ServiceNow's AI capabilities and broadening its footprint in the retail IoT sector, enabling the development of an AI-powered end-to-end workflow solution on the ServiceNow platform that connects real-time data and intelligence, ultimately transforming retail experiences and creating opportunities across diverse industries. G2k Group Gmbh is a Germany-based cutting-edge technology company specializing in artificial intelligence (AI) and IoT solutions for the retail industry.

Major companies operating in the artificial intelligence (AI) in retail market are Alphabet Inc, Microsoft Corporation, Amazon.com Inc, International Business Machines Corporation, Oracle Corporation, SAP SE, NVIDIA Corporation, Salesforce Inc, Baidu Inc, C3.ai Inc, Databricks, Dataiku, Shopify Inc, Ocado Group, Trigo, Standard AI, Trax, ViSenze, Bloomreach Inc, Featurespace, Interactions LLC, Symbotic Inc, RetailNext, Pathr.ai, Graymatics, Focal Systems, Afresh Technologies, Standard Cognition, Brain Corp, Cortexica Vision Systems.

North America was the largest region in the artificial intelligence (AI) in retail market in 2025. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the artificial intelligence (AI) in retail market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East and Africa. The countries covered in the artificial intelligence (AI) in retail market report are Australia; Brazil; China; France; Germany; India; Indonesia; Japan; Taiwan; Russia; South Korea; UK; USA; Canada; Italy; Spain.

The artificial intelligence (AI) in retail market includes revenues earned by entities by predictive analytics, personalized marketing, recommendation engines, fraud detection, visual search and recognition. The market value includes the value of related goods sold by the service provider or included within the service offering. The artificial intelligence (AI) in retail market consists of sales of computer vision, voice commerce, dynamic pricing systems, and augmented reality (AR) systems. Values in this market are ‘factory gate’ values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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