The smart retail market is set to witness a CAGR of 26.45% as it grows from $39.92bn in 2023 to $329.03bn by 2032, according to a report from SNS Insider.

The market is rapidly evolving as retailers increasingly adopt AI, IoT and data analytics to enhance customer experiences and improve operational efficiency. These technologies allow retailers to streamline operations, process more transactions quickly, track inventory and personalise marketing efforts.

Innovations such as smart shelves, automation and digital signage are reducing traditional store capabilities while boosting efficiency and customer interaction. The US market, valued at $9.33bn in 2023, is projected to see a 26.2% CAGR from 2024 to 2032, driven by the widespread adoption of IoT, AI and data analytics.

Additionally, demand for cashless, contactless and digital payments, accelerated by the pandemic, is further propelling market growth. Augmented and virtual reality are enhancing in-store experiences, and the rise of omnichannel strategies is fostering greater customer engagement.

Leading market players according to the report include Amazon, Microsoft, IBM, Intel, Nvidia, Cisco, Google, Samsung, LG, Oracle, SAP, Honeywell, Zebra Technologies, Alibaba and Fujitsu.

In 2023, the hardware segment dominated the market with a 63.5% share, driven by the widespread adoption of smart devices such as smart shelves, electronic shelf labels, PoS systems and digital signage. These technologies are key to enhancing customer interactions, store automation and inventory management. The IoT-powered devices and sensor-based systems have further bolstered the hardware segment’s growth.

From 2024 to 2032, the software segment is expected to see the highest CAGR, fuelled by the growing use of AI-powered analytics, cloud options and CRM tools for personalised marketing and data-driven decision-making.

In 2023, the visual marketing segment led the smart retail market with a 29.7% share, driven by rising demand for digital signage, interactive displays and video walls that enhance customer engagement and improve in-store experiences. These tools enable retailers to offer dynamic content, personalised promotions and targeted ads, boosting sales and customer loyalty.

The smart payment segment is expected to experience the fastest CAGR from 2024 to 2032, fuelled by the growing adoption of contactless payments, digital wallets and mobile payments. Enhanced biometric authentication and QR code-based payments are also improving transaction speed and security.

In 2023, North America dominated the market with a 32.6% share, driven by the rapid adoption of innovative technologies and robust digital infrastructure. Retailers such as Walmart, Amazon Go and Best Buy invested heavily in AI-driven inventory management, voice-activated smart shelves and cashierless stores. Amazon Go, for instance, uses computer vision and sensor fusion for checkout-free shopping. Additionally, the region’s fast-growing adoption of smart payments and contactless options has spurred mobile wallet usage.

The Asia-Pacific region is set to experience the highest CAGR from 2024 to 2032, supported by rapid urbanisation, widespread smartphone use and retail digitisation. Countries such as China, Japan and India are rapidly adopting smart retail technology. Notable examples include Alibaba’s Hema stores in China, which use smart carts and face recognition payments, and Japan’s 7-Eleven, which has automated restocking and self-service checkout kiosks.

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