Retailers are turning to artificial intelligence to solve one of their biggest challenges: Inventory management.
A new report from the Info-Tech Research Group offered insight for leaders to move from outdated methods to data-driven systems that improve forecasting and optimize stock levels.
The report, Build Your AI Strategy for Retail Inventory Management, highlights how AI can reduce waste, improve operational efficiency and boost customer satisfaction by providing real-time insights and predictive forecasts. But adoption is not without hurdles.
Despite the benefits, many retailers struggle to align business stakeholders and develop a cohesive AI strategy, the report noted. Mature data infrastructure and advanced systems are often required to realize AI’s full potential. These are capabilities not all retailers have in place.
“Inventory management applications that are AI-driven can deliver where traditional inventory management falls short,” said Donnafay MacDonald, research director at Info-Tech. “By providing real-time insights backed by big data, these applications enable retailers to respond to market changes through predictive forecasts.”
To help overcome barriers, Info-Tech recommended a seven-step framework for AI implementation. It includes aligning AI strategy with business goals, establishing responsible AI principles, piloting targeted initiatives such as demand forecasting, and building a use-case library. The framework also advises evaluating ROI, prioritizing projects and mapping out a clear roadmap for rollout.
The report warned that with competitors already integrating AI into operations, the pressure to modernize is growing. Retailers that fail to act risk falling behind in an environment where customer expectations are evolving faster than supply chains can adapt.
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