United States Artificial Intelligence (AI) in Retail Market

What is the United States Artificial Intelligence (AI) in Retail Market Size?

As per the survey report on United States artificial intelligence (AI) in retail market, the market is expected to foresee a CAGR value of 12.4% during 2026-2036, and further generate a market size of USD 9.6 billion by the end of 2036. In 2025, the market size was value at USD 2.6 billion revenue.

• The United States artificial intelligence (AI) in retail market’s growth is driven by rising demand for personalized experiences.
• KDMI analyst’s growth analysis foresees lack of skilled workforce as restraint for United States artificial intelligence (AI) in retail market.
• In the United States artificial intelligence (AI) in retail market, component segment is playing significant role.

United States Artificial Intelligence (AI) in Retail Market Analysis

Retail AI is the application of artificial intelligence (AI) technologies—such as machine learning, computer vision, and generative AI. It helps to optimize operations, enhance customer experience, and improve decision-making across both online and physical stores. It also leverages data to personalize shopping, manage inventory, and automate processes. The United States artificial intelligence in retail market is rapidly expanding due to increasing adoption of AI technologies to enhance customer experience, streamline operations, and improve inventory management. According to a 2025 report by the U.S Chamber of Commerce, approximately 58% of small businesses used generative AI, up from 40% from 2024. The small businesses used AI for technology and finance service sectors, indicating 77% and 74%, respectively . Furthermore, Retailers are leveraging AI to analyse consumer behaviour, optimize pricing strategies, and personalize marketing efforts, leading to significant growth of United States market.

United States Artificial Intelligence (AI) in Retail Market Growth Drivers and Restraints

Growth Drivers

• Rising demand for personalized customer experiences – The increasing demand for personalized shopping experiences is a major driver of AI adoption in the United States retail market. According to study, the implementation of artificial intelligence (AI) and machine learning (ML)-driven personalized strategies increases conversion rate by 10-15% and customer lifetime value by 20-30%. A report by McKinsey & Company suggests, personalization can deliver fiver to eight times the ROI and can expand retail sales by 10% or more. As artificial intelligence (AI) is already high – 78% - in the United States firms, the productivity is expected to rise by 2.25% over the next three years . Moreover, as competition among retail companies and startup intensifies, personalization has become a key differentiator, driving retailers to invest heavily in AI-driven solutions to enhance customer experience, further accelerates market expansion.
• Rapid growth of e-commerce – The rapid expansion of e-commerce across the United States retail sector is accelerating the adoption of AI technologies, as retailers wish to provide seamless omnichannel experiences to customers. According to the Census Bureau of the Department of Commerce, retail e-commerce sales reached USD 316.1 billion in the fourth quarter of 2025, up from 1.7% in the third quarter of 2025. The e-commerce sales of fourth quarter accounted for 16.6% of total sales. Therefore, the rapid increase in sales volume is further supporting adoption of AI-driven solutions in retail sector. As AI plays crucial role in enabling features such as chatbots, virtual assistants, visual search, and recommendation engines, encouraging individuals to opt online shopping in their lifestyles. This also enhances customer experience and drive sales volume, contributing to the market growth.

Restraints

• Lack of skilled workforce – The major challenge for market expansion is shortage of skilled professionals to operate with AI-driven workflows. Implementing AI, machine learning, and data analytics into legacy systems also demands technical expertise, which increases overall cost for companies to provide training to people. Many companies lack in-house capabilities and are required to rely on outsourcing, which further increases costs, thereby limiting market growth.
• Data quality and reliability issues – As AI systems depends heavily on high-quality, accurate, and historical data, any inconsistency or gaps can lead to incorrect predictions or poor decision making. This challenge can deter organizations to opt AI-driven personalization in retail sector, which slowdowns market growth.

United States Artificial Intelligence (AI) in Retail Market Segmentation

Our experts at KD Market Insights have segmented the United States artificial intelligence in retail market research report as:

Analyst’s Observation on United States Artificial Intelligence (AI) in Retail Market Recent Developments

Over the years, the experts at KD Market Insights have been observing the recent developments associated with United States artificial intelligence in retail market trends. Our expert’s market forecast analysis has recorded the market players adopting plentiful of key strategies including new product launches, mergers & acquisitions, and collaborations.

Novella, an AI-powered wholesale insurance broker, has raised $21m to expand its brokerage operations across the US. The fresh funding will be used to recruit additional brokers, further develop the company’s AI capabilities and support geographic expansion across the US.

Afresh has announced the expansion of the Afresh platform to every department across the grocery enterprise — including center store, frozen, general merchandise, and health and beauty, in addition to the fresh perimeter where Afresh built its foundation. This makes Afresh the only grocery AI platform capable of managing every item across departments.

United States Artificial Intelligence (AI) in Retail Market Competitive Landscape

Some of the significant participants who top the United States artificial intelligence in retail market growth:

• Amazon.com, Inc.
• Walmart Inc.
• Target Corporation
• The Home Depot, Inc.
• Best Buy Co., Inc.
• Macy's, Inc.
• Lowe's Companies, Inc.
• Alibaba Group Holding Limited
• eBay Inc.
• Shopify Inc.
• Kroger Co.
• Costco Wholesale Corporation
• CVS Health Corporation
• Nordstrom, Inc.
• Wayfair Inc