Macy's Inc. is adding an artificial intelligence forecast overlay capability to its replenishment operations, according to a Sept. 10 earnings call (Retail Dive - Technology). The implementation is part of the retailer's initiative to strengthen inventory replenishment and ensure "the right product in the right place at the right time," COO and CFO Tom Edwards said. The AI capability is currently moving from pilot to broader rollout to improve in-stock levels and drive inventory efficiencies.
This deployment fits within Macy's broader "Bold New Chapter" transformation plan launched in 2024, which focuses heavily on supply chain optimization and was expected to drive $235 million in savings by 2026 (Retail Dive - Technology). Macy's is entering the fall season in a good inventory position, with Q2 inventory up 2.5%, in line with sales growth (Retail Dive - Technology). For commerce practitioners, the shift underscores how AI-driven demand forecasting and allocation optimization are becoming table-stakes capabilities for competing on margin and inventory turns.
Macy's move reflects a broader retail trend. Target is exploring AI and machine learning for inventory decisions and has built a digital twin of its middle-mile inventory positioning system, while Lowe's has partnered with Relex Solutions to use AI for in-stock improvements and demand analysis (Retail Dive - Technology). As more retailers deploy AI-powered replenishment at scale, the competitive advantage will shift from tool adoption to execution quality and data integration depth.