AI in Retail Market: Virtual Assistants — The Fastest Growing Use Case

The global artificial intelligence (AI) in retail market was valued at USD 11.61 billion in 2024 and is projected to reach USD 40.74 billion by 2030, growing at a CAGR of 23.0% from 2025 to 2030. This growth is primarily driven by the increasing number of internet users and smart devices, the rising need for physical store surveillance and monitoring, and supportive government policies promoting digitization.

Artificial intelligence has significantly influenced how retail businesses operate, transforming traditional processes through digital technologies like big data analytics and AI. These technologies are now essential in enhancing customer experience and streamlining business operations. The increasing adoption and awareness of AI and big data analytics in retail are supported by rapid technological advancements, widespread use of applications and smart devices, growing implementation of machine learning services, and the expanding reach of the Internet of Things (IoT).

For example, in February 2020, Baker Hughes—a provider of oil field services—partnered with C3.ai to launch BH3 Production Optimization, an AI-based application that enables real-time monitoring and optimization of production, enhancing oil and gas output.

AI in retail supports quicker decision-making in areas such as product management, marketing, e-commerce, and other core business functions by minimizing the gap between insights and execution. For instance, in June 2021, Talkdesk, Inc. launched Talkdesk Retail Smart Service, an AI-based solution that delivers automated self-service experiences to consumers, allowing support agents to focus on more revenue-generating tasks. These tools provide personalized recommendations and foster better customer engagement.

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Key Market Trends & Insights

• Regional Insights: North America led the global AI in retail market in 2024 with a 33.4% revenue share, driven by significant investments in AI projects and R&D. Retailers in the region are actively leveraging data analytics to improve customer service and operational efficiency.
• By Component: The solution segment dominated the market in 2024, accounting for over 62% of total revenue. The increasing complexity of retail operations is prompting the adoption of AI-driven technologies for warehouse management, logistics, supply chain optimization, and enhancing consumer experiences.
• By Technology: Machine learning emerged as the leading technology in 2024. It enables the delivery of personalized customer experiences and supports improvements in demand forecasting and supply chain efficiency. For instance, Amazon SageMaker, a machine learning service from Amazon, helps apply predictive analytics to enhance user experience.
• By Sales Channel: The omnichannel segment led the market in 2024, driven by increasing digitization in both developed and developing regions. Retailers are utilizing headless commerce to integrate products and payment systems across various platforms, including kiosk screens, smartwatches, mobile apps, and progressive web apps.
• By Application: The Customer Relationship Management (CRM) segment was the top application area in 2024. The growing need to improve customer retention and service has increased the adoption of AI-powered solutions like chatbots, virtual assistants, and intelligent search engines to build customer loyalty and engagement.

Market Size & Forecast

• 2024 Market Size: USD 11.61 Billion
• 2030 Projected Market Size: USD 40.74 Billion
• CAGR (2025-2030): 23.0%
• North America: Largest market in 2024
• Asia Pacific: Fastest growing market

Key Companies & Market Share Insights

The market remains highly competitive, with several global players holding a significant share. These companies are focusing on innovative product development to strengthen customer relationships and boost profitability.

• NVIDIA Corporation plays a major role in advancing AI technologies in retail. The company’s AI platforms help retailers build intelligent stores that improve customer interactions and streamline operations.
• Microsoft Corporation leverages its expertise in software and cloud technologies to empower retail businesses. Its Cloud for Retail platform uses AI-driven tools and analytics to help retailers meet the demands of modern shoppers and address operational challenges.

Key Players

• NVIDIA Corporation
• Microsoft Corporation
• Google LLC
• IBM Corporation
• SAP SE
• Oracle Corporation
• Sentient technologies
• Intel Corporation
• Salesforce, Inc.

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Conclusion

The artificial intelligence in retail market is undergoing rapid transformation, driven by technological innovations, increased digital penetration, and the need for improved business efficiency. AI is not only optimizing back-end operations like supply chain and logistics but also enhancing front-end processes such as customer interaction and personalization. As AI adoption grows, especially in emerging markets like Asia Pacific, the retail industry is expected to witness significant operational improvements and value creation through intelligent automation and data-driven decision-making.