The rapid advances in AI technology have meant that machines are now being used in many new areas. For example, when you buy a jacket online, it is often an AI rather than a human that decides the price. In stores, an AI system monitors your behavior, and AI systems also help with software programming and text translation. Virtual assistants, controlled by voice recognition, are now present in many homes, and self-driving cars are becoming more and more real. In recent years, AI systems have even helped to solve some of the most complex scientific problems.
In retail, AI has already brought about significant changes and is influencing the entire value chain. This includes not only product design and supply chain logistics, but also marketing, sales, customer service and the shopping experience online and in-store. According to McKinsey, the retail and consumer goods industries could benefit significantly from AI, especially generative AI, with a projected value uplift of between $400 billion and $660 billion per year.
Retail, which relies heavily on analytics, points to huge growth opportunities, especially with increasing adoption and investment in AI.Overall, the transformative power of AI could make a significant contribution to the global economy, with generative AI alone potentially generating $2.6 trillion to $4.4 trillion. This is particularly important as global retail sales are expected to exceed $30 trillion by 2024. The use of AI technology has become essential for retailers who want to remain competitive in today's market landscape. AI systems can analyze vast amounts of customer data and provide valuable insights for businesses. This information enables companies to customize their product range, improve the customer experience and increase operational efficiency.
Due to its impressive development trajectory, global AI deployment in retail is expected to reach $10.76 billion by 2023. This rapid increase demonstrates retailers' continued commitment to integrating AI technology to improve the customer experience, streamline processes and maintain competitiveness in an ever-changing market.
Long-term estimates suggest that the use of AI in retail will rise to over $127 billion by 2033. The industry views AI as a revolutionary force that is reshaping the way retail organizations operate, from supply chain management to personalized consumer interactions. According to Future Market Insights, demand for AI in retail is expected to grow at a remarkable compound annual growth rate (CAGR) of 28% between 2023 and 2033. This continued growth underscores the retail sector's commitment to fully harnessing the power of AI technology.
Source: GHARAGE AI Report Q4 2023