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July 25, 2023 : The global image recognition in the retail market is poised for substantial growth, with a projected Compound Annual Growth Rate (CAGR) of approximately 23% between 2023 and 2035. By the end of 2035, the market is expected to generate a revenue of USD 14 billion, a significant increase from about USD 3 billion in 2022. This remarkable growth can be attributed to several factors, including the rising demand for automated processes, the increasing utilization of artificial intelligence (AI) and cloud technologies in the retail sector, and the growing desire for personalized customer experiences. Notably, in 2022, 77% of retailers were making significant progress in their cloud investments.
The adoption of cloud technologies by retailers has facilitated the rapid processing of customer images and the efficient detection of objects within them. This capability allows retailers to swiftly identify products and provide customers personalized recommendations, enhancing the shopping experience. Furthermore, the digitalization of the retail industry is a major driving force behind the global expansion of image recognition in the retail market.
A key takeaway from this market trend is that North America is expected to witness the highest growth rate, with the marketing and advertising segment projected to experience the most significant expansion. Additionally, the Asia Pacific region is anticipated to demonstrate the highest growth rate in the market, driven by increasing internet penetration and the adoption of facial recognition technology in retail stores.
The focus on customer satisfaction has become paramount for businesses, with companies recognizing that exceptional customer service is vital for their success. Investments in customer-friendly policies, improved customer service, and the incorporation of customer feedback have become commonplace. Many consumers are willing to pay more for outstanding customer service, and customer loyalty is greatly influenced by the quality of service received.
Adopting image recognition technology by retailers fosters a more personalized shopping experience for customers. This technology enables the recognition of customer preferences and facilitates the suggestion of tailored products or services, ultimately elevating customer satisfaction and loyalty. Moreover, image recognition has the potential to revolutionize the way customers interact with products, allowing for virtual “try-on” experiences and personalized product recommendations based on previous purchases.
Global image recognition in retail is divided into five major regions: North America, Europe, Asia Pacific, Latin America, Middle East, and Africa. North America is expected to lead the market due to its advanced technological landscape and widespread implementation of image recognition solutions in the retail industry. The region’s mature retail market, with numerous physical and online stores, presents ample opportunities for companies to leverage image recognition to improve customer service and enhance sales.
The Asia Pacific region’s revenue in the retail image recognition market is projected to witness substantial growth by 2035, driven by the increasing adoption of facial recognition technology in retail stores and the rise in internet penetration, leading to a surge in online shopping.
Among the different types of image recognition, digital image processing is expected to hold the largest revenue share by 2035. Its advantages over traditional methods, such as enhanced accuracy, cost-effectiveness, and speed, have contributed to its significant growth. Online shoppers, in particular, find digital images helpful in purchasing decisions.
The marketing and advertising segment is set to become the largest revenue contributor by 2035 among various image recognition applications. The demand for personalized and targeted ads and promotions drives this growth, with companies leveraging image recognition technology to deliver customized experiences to individual customers. The rise of big data analytics also contributes to the demand for marketing and advertising solutions, as companies can now identify customer preferences and buying patterns and analyze customer feedback in real time.
Image recognition in the retail market is further segmented based on components, deployment methods, and key players. Companies such as Amazon Inc., Google LLC, IBM Corp., and Huawei Technologies Co., Ltd. are prominent market leaders.
Recent developments in the market include Hitachi, Ltd.’s creation of human action recognition AI technology capable of identifying obscured faces or subtle motion fluctuations in videos through advanced artificial intelligence analysis. Additionally, Brazilian company InbraTerrestre has developed lighter-weight helmets for military and police enforcement agencies using Honeywell’s Spectra Shield technology.
Overall, global image recognition in the retail market is witnessing significant growth, fueled by the adoption of advanced technologies, the increasing focus on customer satisfaction, and the transformation of the retail industry through digitalization and personalized customer experiences.
