Based on a recent market report published by Markets and Markets on the topic of AI in fashion, they estimate that the size of the market is expected to grow from USD 228 million in 2019 to USD 1,260 million by 2024. From this forecasted period, it is believed to grow at a Compound Annual Growth Rate (CAGR) of 40.8%.
Adapting to the changing consumer
Ever since the advent of social media and the continued rising adoption of its reach, customer behaviors have changed drastically, with more and more consumers looking online to find information, products, and services.
For this reason, fashion providers have been looking to find every possible service to keep them ahead of this massively competitive market, turning to technology to enhance trust and hold their customers for longer.
With growing e-commerce sales and an entirely different type of consumer at hand, fashion retailers are implementing AI-powered recommendation systems like Chain of Demand’s predictive analytics to make personalized product recommendations, leveraging a myriad of various data sources, from buying history, product attributes, weather, and promotions.
The fashion store end user is forecasted to hold the largest market size. It is also estimated that the deployment of cloud-based AI-powered solutions will only increase, as retailers begin to take note of how artificial intelligence is fashion’s perfect fit. Implementing AI has never been more important, as it has enabled brands to gain a clear competitive advantage.
Global adoption of AI technologies
This growth in AI integration is visible globally, with the five major geographic regions covered. As noted in the figure above, it displays how North America, Asia Pacific (APAC), Europe, Middle East & Africa (MEA), and Latin America are expected to grow in implementing artificial intelligence into the fashion market. Among these, North America holds the largest market size, with the APAC region showing rapid growth in the market.
As discovered in the study, one of the main reasons for this has been due to the growing adoption of social media and digital technology. Phone penetration serves to be one of the highest in the APAC region, with this area topping world growth in smartphone traffic. Moreover, greater investments by tech giants in this region have been further fueling the growth of AI-based solutions. As AJ Mak notes in Markets and Markets’ report,
Today, traditional forecasting methods where historical data is used as a single source of truth is not enough to help retailers succeed. Using predictive analytics can help retailers gain a holistic view of the existing situation and reduce inventory overstock.