Analyst firm Omdia has predicted that the expenditure on AI software for retail uses across the world will grow to $9.8 billion (£7.96bn) in 2025, compared to $1.3bn in 2019.
The report, titled Artificial Intelligence for Retail Applications, also says that retailers will have invested $37.3bn on AI-driven solutions from 2019 through 2025 globally.
Plenty of use cases are driving the artificial intelligence market within retail, such as reducing cost and improving the effectiveness of inventory management. Not surprisingly, the ongoing Covid-19 pandemic has seen AI retail software becoming ‘ever more important’. “Improving operational flexibility, in-store and for retailer online efforts, [are] particularly critical with the expectation of production delays and decreased sales due to the virus,” Omdia noted.
Supply chain and inventory management is set to be the largest retail use case for spending between now and 2025, the report added.
Mark Beccue, principal analyst at Omdia, said: “Giant online sellers like Amazon, Alibaba and Walmart—along with hundreds of hungry startups—have built lean, analytics-driven organisations that leverage their scale and efficiency to drive revenue and reduce costs.
“As a result, revenue and margins for brick-and-mortar retailers are under pressure as these more efficient and scalable online disruptors draw more buyers and sales with sharper pricing, personalised customer journeys and finely tuned product assortments.
“In response to this challenge, pioneering retailers are adopting AI-driven software solutions to improve the efficiency of customer service and consumer targeting,” Beccue added.
Last August, a report analysing over 60 UK-based fashion retailers exploring their omnichannel strategies and experiences published by Veeqo found 37 per cent were online only, while 49 per cent had a dedicated mobile app and 62 per cent had both a physical and online store. Three quarters of brands supported multi-device checkout.
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