The Artificial Intelligence in Retail Market has witnessed remarkable growth in recent years, primarily fueled by the increasing adoption of AI-powered technologies by retailers globally. According to MRFR analysis, the market size was estimated at USD 8.13 billion in 2024 and is projected to rise to USD 9.973 billion in 2025, with a forecast growth to USD 76.96 billion by 2035, exhibiting a compound annual growth rate (CAGR) of 22.67%.

The growth is driven by several factors. First, retailers are increasingly leveraging AI for personalized customer experiences, predictive analytics, demand forecasting, and supply chain optimization. AI-powered chatbots, recommendation engines, and inventory management tools allow retailers to streamline operations while providing customers with a seamless shopping experience. Second, the expansion of e-commerce and omnichannel retailing has necessitated the adoption of AI technologies, as businesses aim to improve efficiency and enhance consumer satisfaction.

Technological advancements in machine learning, computer vision, and natural language processing (NLP) are also contributing to market growth. Retailers can analyze vast amounts of data generated from online and offline channels, enabling informed decision-making and real-time responses to market changes. Moreover, AI-driven solutions help in identifying trends, managing pricing strategies, and mitigating potential losses due to inventory mismanagement.

Geographically, North America and Europe are leading the AI in retail adoption due to high investment in technology and digital infrastructure. Meanwhile, the Asia-Pacific region is expected to register significant growth due to increasing smartphone penetration, e-commerce adoption, and rising consumer demand for personalized shopping experiences.

With the retail industry becoming increasingly competitive, market players are investing heavily in AI-driven solutions to enhance operational efficiency and customer engagement. The adoption of AI technology is not just a trend but a strategic necessity that ensures long-term growth and profitability in the retail sector.

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