AI for Inventory Management in the Retail Industry

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With the term “fast fashion” evolving quickly, fashion enthusiasts are constantly trying to stay one step ahead of the newest and hottest trend. For many footwear retailers, meeting consumer demand is becoming more difficult. While customization has created novelty for consumers, this approach makes the design process overwhelming, and often means the retailers design the latest and greatest footwear without ever talking directly to their customers. For brands in the footwear industry, analyzing which shoe model to focus on and which models to avoid is all done easily today with the help of AI for inventory management. It is very important for retailers to identify the trends and patterns in buying behavior to boost their annual revenue.

AI for Inventory Management and Sneaker Design

AI can recommend new sneaker styles, with similar taste, to its users. Many big retailers such as Nike and Under Armour are partnering with software companies to take advantage of AI in their space. With the goal of creating of the most sought-after sneaker, retailers create their base concept and then augment design features using an AI tool. The program then tweaks, iterates, and tests new innovative designs to see what will most likely be desirable to consumers.

Footwear Retailers Sizing up with AI

On August 5, 2019, Nike announced its acquisition of Celect, a predictive analytics company. With the hope to improve their new strategy of selling directly to customers, Nike implemented Celect’s technology into their SNKRS app and website. Over the past year, Nike have been slowly shifting its business toward direct sell to the consumers rather than through a third-party retailer, such as Footlocker, Champs, etc. With the help of AI for inventory management and the strategy of direct sales to consumer, Nike shares are up more than 10% year to date. This allowed Nike to have a 12% increase in direct business sales and accounts for roughly 30% of Nike’s total revenue.