AI in Fashion Market size was valued at USD 1.6 billion in 2023 and is expected to reach USD 91 billion by the end of 2036, registering around 40% CAGR during the forecast period i.e., between 2024-2036. In 2024, the industry size of AI in fashion is assessed at USD 3 Billion.
Over the years, the fashion industry has witnessed significant growth due to globalization, the rapidly expanding online sector, and the adoption of advanced technologies like artificial intelligence (AI). AI solutions are widely used in the fashion industry to improve the customer experience by understanding their behavior, purchasing patterns, and preferences. This information helps in tailoring marketing strategies, and product offerings to align with the customer experience.
In May 2024, Oracle Corporation announced the new generative AI capabilities of Oracle Fusion Cloud Applications Suite to help consumers improve decision-making, and enhance their experience. The latest addition AI is embedded in existing business workflows across HR, sales, supply chain, marketing that enables organizations to focus on meaningful tasks to engage buyers and accelerate purchase decisions in a more precise manner through automating repetitive processes.
Growth Drivers
Challenges
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Base Year |
2023 |
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Forecast Year |
2024-2036 |
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CAGR |
40% |
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Base Year Market Size (2023) |
USD 1.6 billion |
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Forecast Year Market Size (2036) |
USD 91 billion |
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Regional Scope |
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Categories (Beauty & Cosmetics, Accessories, Clothing, Others)
Clothing segment is poised to hold AI in fashion market share of over 35% by the end of 2036, owing to the surging demand for personalized experience in the clothing sector. AI uses historical purchase information from customer data, and makes predictions for customer preferences for new purchases, leading to a reduction in the clothing return percentage. AI smart mirrors are steadily gaining popularity among customers to visualize their outfits in different colors, sizes, styles without the need of changing them. For instance, in February 2022, MySize launched an AI-powered smart mirror to analyze the customer’s body style preferences and shape to suggest outfit combinations. Smart mirror technology eliminates the guesswork of picking a size and works to speed up the try-on process.
Application (Creative Designing & Trend Forecasting, Inventory Management, Product Search & Discovery, Virtual Assistant, Others)
The inventory management segment in AI in fashion market is set to hold a significant revenue share by 2036 due to the increasing need to maintain the inventory level for future sales in the fashion industry. AI-powered inventory systems by using algorithms such as market trends, historical sales information, and others help retailers, and manufacturers to never face the problem of under or over-stock. In January 2024, SAP SE launched new AI-driven capabilities to help retailers optimize their business processes. New SAP predictive replenishment will consider demand volatility, constraints, and business targets to determine the optimal order quantities with the lowest cost.
Our in-depth analysis of the global market includes the following segments:
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Deployment Type |
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North America Market Statistics
North America AI in fashion market is estimated to dominate over 32% revenue share by 2036. owing to the presence of major key players such as Microsoft Corporation, IBM Corporation, Adobe Inc., and others. These key players are continuously investing in R&D for the launch of new AI technologies in the fashion sector. In addition, the key players are adopting new AI tools in the fashion industry for the management of clothes, and other fashion accessories with sustainability.
The market growth in Canada is set to grow over the forecast period due to the increasing government initiatives for the advancement of AI technologies. In June 2022, the Artificial Intelligence and Data Act (AIDA) was introduced in parliament to promote the development and use of AI systems in Canada’s private sector. Additionally, the surging use of smartphones and other devices among consumers for getting along with the new trend in fashion is another factor that is anticipated to foster market expansion in the country.
The AI in fashion market in the U.S. is projected to experience significant growth by 2036. This growth can be attributed to the growing use of different social media platforms such as Facebook, Instagram, and Snapchat, providing different fashion ideas to customers.
APAC Market Analysis
By 2036, Asia Pacific AI in fashion market is set to hold more than 27% share. due to the growing e-commerce industry. AI provides different benefits to customers over the e-commerce platforms, such as product recommendations, chatbots, virtual assistants, and others.
The ongoing fashion trend and rising availability of clothes, and accessories at discounted rates is contributing to the expansion of the sector in China. The manufacturing and labor costs of producing clothes are low in this country owing to low tax & duty rates and strong business ecosystem.
The market in India is projected to experience notable growth by 2036, fueled by the increasing investment by the companies for marketing strategies and rapidly expanding fashion sector. AI analyzes the purchasing patterns of customers to understand the influencing fashion choices, which helps in tailoring marketing strategies. As a result, companies in the country can offer products as per the needs of the customers.
Japan's AI in fashion market is anticipated to grow over the forecast period due to surging use of AI robotics to manufacture better fashion products. AI robotics uses a 3D imaging lens to scan the clothing products and pack them accurately. Additionally, Japan is one of the major suppliers of industrial robotics to various countries such as the U.S. and China.
The integration of AI in the fashion sector is proving to be a game changer. Brands such as H&M, Zara, Nike, and Levi’s are a few examples that have incorporated AI into their business operations to enhance personalize shopping experience, and improve customer service. The AI fashion market comprises multiple key players across the globe competing for a larger market share. To stay in front of competitors and uphold their position, these companies frequently employ various tactics such as mergers, acquisitions, and partnerships with other companies. Some leading market players are mentioned below:
Author Credits: Abhishek Verma
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