What: In recent years, AI-driven inventory tracking has become increasingly sophisticated and popular, offering businesses the ability to form more accurate forecasts based on variables such as historical and current sales, price fluctuations, order quantity, seasonality, promotions, product launches, and even market outliers like natural disasters and pandemics. In addition to AI, technologies like RFID (radio frequency identification) are being used to provide real-time location tracking of inventory items.

Why it is important: These technologies have the potential to make inventory management much more efficient, reducing waste and helping businesses to grow in a more sustainable way. However, as discussed during the IADS Supply Chain Meeting, there is no consensus among IADS members.

Companies such as Fuse Inventory and Sparkbox.AI offer AI-driven inventory management solutions that help companies make more informed decisions about how much inventory they need and where to sell it. Fuse has seen great success with consumer packaged goods brands, particularly in the beauty and cosmetics industry. Sparkbox.AI, on the other hand, is targeting the fashion industry, aiming to overcome the challenges associated with managing inventory in this sector due to the quickly changing nature of fashion trends and the complexities of different sizes, colours and styles.

American Eagle Outfitters, for example, has partnered with startup Radar to install RFID sensors and tags on apparel in 500 of its stores, enabling them to know how much of a certain item is in stock, and exactly where it is.

How AI and RFID are helping retailers right-size inventory