AI in Retail Market Outlook:
AI in Retail Market size is valued at USD 14.4 billion in 2025 and is projected to reach a valuation of USD 123.7 billion by the end of 2035, rising at a CAGR of 24% during the forecast period, i.e., 2026-2035. In 2026, the industry size of AI in retail is evaluated at USD 17.8 billion.
The market is shifting rapidly as retailers increasingly use artificial intelligence to automate supply chain optimization, merchandising, and personalized customer experiences. One of the drivers of this is the need for unified commerce, where AI bridges online and offline channels and produces smooth shopping experiences. In a key announcement, IBM rolled out new generative AI offerings at NRF in January 2024, intended to unify shopping experiences and maximize store-level product assortment optimization with improved supply chain transparency and tailored service. This is part of a wider industry trend toward using AI to bridge the gap between customer expectations and retail execution.
Government actions are also significantly influencing the market by offering incentives for AI adoption as well as regulatory structures for its use. For example, the U.S. government's National Artificial Intelligence Research and Development Strategic Plan in May 2023 laid out nine strategies for developing trustworthy AI, such as long-term investments in research and building public datasets. These regulations are speeding up the creation of AI technologies for the retail industry while creating essential guidelines on data governance and security.
