By Retail Brew Staff
less than 3 min read
Definition:
Inventory management is the process of tracking products through their entire life cycle: from purchase to sale. It’s a balancing act between having enough product to meet demand and not over-ordering, which ties up cash and shelf space. Today’s retailers lean on software that crunches real-time data to optimize restocks, forecast trends, and avoid productions being out of stock. Whether it’s RFID tags, barcode scanners, or AI-driven analytics, the tech is smarter than ever. Poor inventory practices can crush margins. Overstock can result in markdowns; understock, in missed sales. Good inventory management means happier customers and a healthier bottom line.
Origins of inventory management
The 1970s made modern-day inventory management possible, and it continues to evolve to this day. What changed then? The invention of the barcode. Suddenly, every SKU had a digital twin. In the 1980s and ’90s, ERP (enterprise resource planning) systems and just-in-time (JIT) inventory came along, helping trim excess and stock shelves with greater precision. Today, it’s all about real-time data, AI-driven demand forecasting, and tracking products from factory floor to front porch. With omnichannel retail and sky-high customer expectations, inventory management isn’t just ops—it’s strategy.
Inventory management in context
“Streamlined inventory management that’s organized and well connected wherever a product is stored and sold can boost sales, deliver a better customer experience, and keep budgets and margins in check. It’s about balancing how much retailers have invested in products versus how quickly customers are buying those products, Jonah Ellin, chief product officer at 1010data, told Retail Brew.”
“Walmart uses an AI-powered inventory management system to predict demand, and this year it’s testing out a new and improved version designed to help meet demand without building up excess inventory like it did in 2021.”
