Skip to main content

Retailers Raise Investment in Artificial Intelligence Apps

The common goals of artificial intelligence (AI) in computer programs can be described as problem-solving and task completion. In general, these productivity enhancements are intended to either replace or complement human functions.

In particular, AI has a significant transformative potential for most retailers, with a potential that's based on changes already underway within the retail industry, which are making AI apps more applicable.

Retailer AI Application Market Development

According to the latest worldwide market study by Juniper Research, global retailer spending on AI will reach $7.3 billion per year by 2022 -- that's up from an estimated $2 billion in 2018, as retailers target new avenues to increase personalization of the customer experience.

The study found that retailers will heavily invest in AI tools that allow them to differentiate and improve the services they offer customers. These range from automated marketing platforms that generate tailored, timely offers, to chatbots that provide instant customer service.


The Juniper market study also found that spending will be strongest in customer service and sentiment analytics, where AI can be applied to understand customer reaction to the products purchased and the service received.

This will prove to be a key tool for retailers seeking to improve their customer experience. Retailer spending in 2022 will be shared as follows:

  • Customer Service & Sentiment Analytics - 54 percent
  • AI-based Automated Marketing - 30 percent
  • Demand Forecasting - 16 percent


Juniper also predicted that savvy retailers will use AI insights to design and target new product ranges, as well as to create promotional offers.

"Retailers are looking to replicate the success of Amazon in making AI a core part of their operations, with retailers increasingly turning to solutions such as AI-optimised pricing and discounting, as well as demand forecasting," said Nick Maynard, analyst at Juniper Research.

Outlook for New Growth in Retail AI Apps

The research found that AI-backed demand forecasting is increasingly becoming a key tool for retailers. With the advent of specific days for shopping, such as the Black Friday phenomena, understanding customer demand and correctly planning based on this is more important than ever.

Juniper believes that retailers must invest in this area in order to stay competitive, particularly in low-margin retail segments. It noted that the cost of AI tools, currently uneconomical for many players, will drop by 8 percent over the next 4 years, helping realise a 300 percent increase in software spend.

Popular posts from this blog

Worldwide Contactless Payments will Exceed $1 Trillion

There's a huge upside opportunity for digital payment innovation in America. As of December 2017, Juniper Research estimates that only 9 percent of the total payment cards in circulation within the U.S. market was contactless-enabled -- this translates into just over 100 million cards. While this is a significant installed base -- around 13 percent of total chip cards issued in the U.S. market -- Juniper estimates that only 5.5 percent of the cards were actually used to make contactless offline point-of-sale purchases in 2017. This translates into about 6 million contactless cards used for payments. That's relatively low in comparison with more advanced markets such as Canada (60 million) and the UK (108 million). Contactless Payment Market Development Juniper Research forecasts that driven by payment cards and mobile wallets, in-store contactless payments will reach $2 trillion by 2020 -- that represents 15 percent of the total point of sale transactions. Furthermore

Digital Identity Verification Market to Reach $16.7B

As more enterprise organizations embrace the ongoing transition to digital business transformation, CIOs and CTOs are adopting new technologies that enable the secure identification of individuals within their key stakeholder communities. A "digital identity" is a unique representation of a person. It enables individuals to prove their physical identity during transactions. Moreover, a digital identity is a set of validated digital attributes and credentials for online interactions -- similar to a person's identity within the physical world. Individuals can use a 'digital ID' to be verified through an authorized digital channel. Usually issued or regulated by a national ID scheme, a digital identity serves to identify a unique person online or offline. Digital Identity Systems Market Development Complementary to more traditional forms of identification, digital identity verification systems can enhance the authenticity, security, confidentiality, and efficiency of

Software-Defined Infrastructure: The Platform of Choice

As more organizations adapt to a hybrid working model for their distributed workforce, enterprise CIOs and CTOs are tasked with delivering new productivity-enabling applications, while also seeking ways to effectively reduce IT cost, complexity, and risk. Traditional IT hardware infrastructure is evolving to more software-based solutions. The worldwide software-defined infrastructure (SDI) combined software market reached $12.17 billion during 2020 -- that's an increase of 5 percent over 2019, according to the latest market study by International Data Corporation (IDC). The market grew faster than other core IT technologies. The three technology pillars within the SDI market are: software-defined compute (53 percent of market value), software-defined storage controller (36 percent), and software-defined networking (11 percent). "Software-defined infrastructure solutions have long been popular for companies looking to eliminate cost, complexity, and risk within their data cente