What: Macy's is rolling out an AI forecasting overlay for inventory replenishment, moving the capability from pilot to broader deployment across its supply chain.

Why it is important: Macy's rollout puts it alongside Target, Lowe's and Kohl's in a broader industry convergence on AI/ML for inventory and demand planning, suggesting this is becoming table stakes rather than a differentiator.

Macy's Inc. is adding an AI forecast overlay to its replenishment operations, moving the capability from pilot to broader rollout, according to COO and CFO Tom Edwards on the company's September 10 earnings call. The goal is to have "the right product in the right place at the right time," improving in-stock levels and driving inventory efficiencies.

The initiative sits within Macy's three-point "Bold New Chapter" transformation plan, launched in 2024, which targets $235 million in supply chain savings by 2026 through closing "unproductive" centers and opening an automated facility in North Carolina. Edwards said supply chain efficiencies are expected in the second half of 2026, benefiting gross margin, with Macy's entering the fall season in a good inventory position after Q2 inventory rose 2.5 percent, in line with sales growth.

Peers are pursuing similar paths: Target has built a digital twin of its middle-mile inventory positioning system, Lowe's is expanding its Relex Solutions partnership to unify inventory planning, and Kohl's has adjusted inventory depth and allocation, crediting the changes with a smoother transition of spring receipts.

IADS Notes: Inventory optimization has become a recurring lever across the department store sector's efficiency and turnaround programmes. Kohl's overhauled its own inventory planning and supply chain processes to raise in-stock levels and protect replenishment receipts, describing agile, data-driven inventory management as central to countering demand volatility (Supply Chain Dive, March 2026). At Macy's, the fulfillment network itself has been under active restructuring, with the closure of its Cheshire, Connecticut center and the reallocation of resources toward more automated facilities forming part of the $235 million cost-savings target under the "Bold New Chapter" plan (Supply Chain Dive, January 2026). That plan's cumulative results were most recently confirmed by a fifth consecutive quarter of comparable-sales growth and raised full-year guidance, with analysts treating the pattern as evidence the turnaround has moved past a one-off recovery (Inside Retail, September 2026). Macy's CEO has also detailed the operational mechanics behind that progress — merchandising, staffing and store-experience changes running in parallel — as the programme enters its third year, offering a point of comparison against peers earlier in their own resets (WWD, September 2026).

Macy's rolls out AI inventory replenishment tool