In an effort to enhance operational efficiency and ensure better product availability, Macy’s Inc. is fast-tracking the deployment of a new artificial intelligence-powered forecasting solution designed to improve how it replenishes inventory across its stores.
Company Expands Implementation of AI Forecasting Technology
During its earnings call on September 10, the company revealed its plans to move an AI forecast overlay capability beyond initial testing. According to Tom Edwards, Macy’s Chief Operating Officer and Chief Financial Officer, this initiative directly supports efforts to place the correct merchandise at each store precisely when needed. Macy’s is targeting higher in-stock rates and enhanced inventory productivity as part of ongoing transformation objectives.
Transformation Roadmap Prioritizes Supply Chain Efficiency and Savings
Further reinforcing this direction, Macy’s “Bold New Chapter” transformation plan—which began in 2024—sets out a multi-pronged strategy for supply chain optimization and cost savings. The company aims to realize $235 million in savings by 2026 by upgrading operations from end to end. The plan encompasses moves such as closing less profitable supply chain locations and launching a new automated distribution center in North Carolina.
Edwards highlighted in the same earnings call that significant supply chain performance improvements are anticipated in the second half of 2026, with positive implications for the company’s gross margin. The company expects these operational investments to not only increase revenue and bolster customer satisfaction but also substantially reduce operating costs moving forward.
Retailers Embrace Data and AI to Sharpen Inventory Control
As the fall season commences, Macy’s reports that it remains in a strong inventory position, with levels rising by 2.5% in the second quarter, mirroring the company’s sales growth over the same timeframe. The adoption of sophisticated analytics and AI to drive inventory decisions is becoming the norm in retail.
Among Macy’s competitors, similar investments have been announced. Target is making use of AI and machine learning to improve inventory planning and has rolled out a digital twin for inventory positioning to upgrade its overall supply chain agility. Meanwhile, Lowe’s is broadening its adoption of AI via a partnership with Relex Solutions, empowering the company to analyze demand more deeply and keep shelves stocked, using wider data sources as reported in recent coverage.
Additional adjustments come from Kohl’s, which has fine-tuned its approach to inventory by updating allocation procedures and inventory depth. The retailer’s leadership indicated in March that modifying these processes has already allowed for smoother seasonal inventory turns—such as spring stock arrivals (full details).
Industry Outlook
With heightened competition and rising consumer expectations, the move toward AI-powered forecasting tools such as Macy’s system is increasingly recognized as essential among leading retailers. Macy’s commitment to supply chain optimization and data-driven upgrades is set to help the company respond to customer needs, streamline operations, and sustain financial growth for future periods.