When the Covid-19 pandemic hit, retail operations changed overnight.

Brick-and-mortar locations closed. Customers shopped online at record levels, with knock-on effects in cybercrime and fraud. Supply chain disruptions led to product shortages and unpredictability. Forecasting models were rendered moot.

AI for retail took a hit in 2020 as pandemic-related uncertainties shook investors’ confidence. Funding to the space fell 30% yearoveryear in 2020, and deals reached a 4-year-low. Well-known vendors like autonomous store startup Stockwell AI (backed by GV, New Enterprise Associates, and others) closed shop.

But as new problems arose in the retail space, new AI solutions emerged. These tools helped brands adapt to the swift and unprecedented change, and they will continue to impact the industry long after the pandemic subsides.

Retail AI has already hit a record funding level in 2021, driven by mega-rounds ($100M+) to vendors tackling issues like e-commerce fraud, e-commerce fulfillment, and first-party data analytics.

In this report, we examine 7 retail AI trends that accelerated in 2020 and dig into what comes next for the space.