Global AI in Retail Market Expected to Hit $95.2 Billion Amid Focus on Customer Experience – Tuesday, January 20, 2026

The global Artificial Intelligence in Retail Market is projected to reach $95.2 billion, signaling a transformative shift in both customer experience and operational efficiency. AI technologies are increasingly being leveraged to personalize shopping journeys and streamline retail operations at scale.

Who should care: VPs of retail, store operations leaders, eCommerce directors, customer experience teams, and retail technology decision-makers.

What happened?

The retail industry is undergoing a significant transformation fueled by the rapid adoption of artificial intelligence, with market forecasts estimating growth to $95.2 billion. This expansion is driven largely by AI’s ability to enhance customer experiences through personalized recommendations and targeted marketing strategies. Retailers are deploying AI-powered tools such as chatbots and virtual assistants to deliver tailored shopping experiences that align with individual consumer preferences, thereby boosting engagement and loyalty. Beyond the front end, AI is revolutionizing back-end operations by improving inventory management and supply chain processes through predictive analytics. These capabilities enable retailers to anticipate demand more accurately, reduce waste, and optimize stock levels, resulting in greater operational efficiency and cost savings. This evolution marks a pivotal shift where AI is no longer a supplementary technology but a strategic imperative for retailers striving to remain competitive and responsive to evolving consumer expectations.

Why now?

The urgency of this AI-driven transformation stems from rising consumer expectations for personalized, seamless, and efficient shopping experiences. Over the past 18 months, accelerated by the global pandemic, digital interactions and eCommerce activities have surged dramatically, reshaping how consumers engage with retailers. This shift has created pressure for retailers to adopt innovative technologies to maintain relevance and meet heightened demands. Simultaneously, advancements in AI technology—both in capability and accessibility—have made it increasingly feasible for retailers to integrate AI solutions into their operations. These factors converge to drive the rapid market growth and compel retailers to invest strategically in AI to enhance customer satisfaction and operational performance.

So what?

The projected expansion of AI in retail highlights the critical need for retailers to adapt swiftly to changing consumer behaviors and operational challenges. From a strategic perspective, this means prioritizing investments in AI technologies that enable deeper customer personalization and more efficient operations. On an operational level, retailers must focus on integrating AI-driven tools that provide real-time insights and automate routine processes, thereby reducing costs and improving service delivery. Embracing AI will not only enhance customer engagement but also create more agile and resilient retail operations capable of responding to market fluctuations.

What this means for you:

• For VPs of retail: Prioritize AI investments to drive customer personalization and operational efficiency, ensuring your brand remains competitive.
• For eCommerce directors: Leverage AI to craft seamless, personalized online shopping experiences that increase conversion and loyalty.
• For customer experience teams: Use AI-driven insights to refine marketing strategies and deepen customer engagement across channels.

Quick Hits

• Impact / Risk: Rapid AI adoption may widen the competitive gap between technologically advanced retailers and those slower to adapt, potentially affecting market share.
• Operational Implication: Integrating AI solutions is essential for optimizing inventory and supply chain management, boosting overall efficiency.
• Action This Week: Assess current AI capabilities, identify gaps, brief executive teams on integration strategies, and evaluate potential AI vendor partnerships.