In the last five years, inventory management practices have swung from just-in-time to just-in-case, then back again. Now retailers are trying to split the difference with a new focus on technologies, many of which are powered by AI, designed to optimize stock levels and mitigate supply chain risks regardless of what’s happening in the wider economy.
Despite challenges such as a lack of integrated data and a high failure rate for AI-related pilot projects, retailers are investing in new technology to help track and manage the flow of inventory. Here are a few examples of what’s being tested:
Power in your pocket
In May, Lowe’s launched an AI-powered app in partnership with OpenAI called Mylow Companion that gives employees on the sales floor the ability to quickly access relevant information.
The home improvement retailer touted the app’s ability to answer customer questions in real time, like “What kind of fertilizer works best for Bermuda grass?” However, outside of answering these kinds of technical product questions, simply knowing what’s available in the store is another challenge for employees, so the app will also provide updated inventory information.
“Through our collaboration with Lowe’s, AI is making it faster and easier for their associates to help customers find exactly what they need for their most important projects,” Open AI’s Chief Operating Officer Brad Lightcap said in a statement.
High visibility
PetSmart offers similar capabilities with its gStore platform, which launched earlier this year in partnership with SaaS company GreyOrange. Through a combination of 3D location management, SKU assignment, and process flow optimization, the platform allows store associates to rapidly track and locate inventory. The upside is “greater inventory visibility,” according to Troy Siwek, gStore general manager at GreyOrange.
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Staying on the topic of visibility, GNC is experimenting with drones to improve inventory tracking on the back end of its retail operations. The vitamin outlet this year started using AI-powered drones to conduct more regular and rapid warehouse audits, vastly improving the accuracy of its inventory counts, a process that had previously been highly error-prone.
Smarter predictions
Another kind of visibility is whether retailers can accurately anticipate what’s coming next, and lately the biggest stores are tapping AI to produce more accurate predictions around demand.
Big box chains such as Walmart, Target, and Home Depot have recently revealed they are using AI to help get their inventory levels just right amid an uncertain global trade environment. Even before the latest trade debacle, Walmart said it was using predictive analytics to forecast demand ahead of the holiday shopping season, and that it was incorporating weather data into its models, a practice that is spreading throughout the industry.
There are also hints of more innovations to come: Target CEO Brian Cornell teased shareholders back in May when he said “we have some compelling technology projects” aimed at modernizing and streamlining inventory management.
“I’ll have far more details to share over time, but for now I want to emphasize that our team is fully committed to this work so we can more quickly deliver on the long-term aspirations we have for our business,” he said.