AI is changing how we shop and how stores operate, and that technology is moving into brick-and-mortar stores. At this year’s NRF conference, as highlighted in the Business of Fashion article “The Next Step for Retail AI Is Bringing It Into the Store”, brands like H&M and Tapestry explored how technologies like computer vision, RFID, sensors, and machine learning are transforming physical stores. From tracking customer behavior to improving inventory accuracy, AI is bridging the gap between e-commerce-style data insights and in-store experiences.
Below, we’ll dive into how merchandise planning software can use these innovations to revolutionize demand forecasting and real-time inventory management. Let’s break it down.
Digging into the Data
Stores are full of data: who’s shopping, where they walk, what they pick up, and even how long they stay in certain areas. This gets even more advanced when you add AI tech.
Here’s a quick look at the AI tools reshaping brick-and-mortal retail:
- Computer Vision: Cameras act as “AI eyes,” tracking how customers move, what they look at, and which products they touch. This helps stores optimize layouts and product placement.
- Machine Learning: AI’s “brain” finds patterns in data—like predicting rainy day bestsellers or suggesting ideal product pairings (e.g., coffee and pastries).
- Sensors: These small devices track time spent in sections and whether customers pick up or put back items, helping stores refine their layouts.
- RFID: Tags on products track inventory in real-time, ensuring shelves stay stocked and items are in the right place.
- Smart Badges: Worn by employees, these devices provide alerts for restocking, misplaced items, and online order fulfillment, keeping everything running smoothly.
These tools combine to generate a treasure trove of in-store data. But without the right tools to analyze it, that data can only go so far. This is where merchandise planning software steps in to elevate AI’s potential.
Accurate Demand Forecasting
By integrating in-store AI data into merchandise planning software, brands can more accurately forecast demand. The software can analyze factors gathered by AI like customer behavior, product interactions, weather trends, and even local events to predict which items will sell and when.
For example:
- If the in-store AI detects an increase in customer interactions with outerwear during a cold front, a merchandising platform can recommend boosting inventory before a spike in demand.
- It can also account for patterns like seasonal shifts or local preferences, ensuring the right products are stocked at the right time.
With smarter forecasting, brands can avoid costly overstocking or understocking, reduce waste, and maximize sales opportunities.
Personalized Shopping Experiences
AI can help merchandise planning software adapt to local customer preferences, creating personalized merchandising strategies. Here’s how:
- Localized Assortments: The merchandising software uses AI insights to identify style preferences in specific areas, ensuring stores stock products that match local tastes.
- Tailored Product Mix: If one location sees higher demand for athletic wear while another prefers formal attire, the software adjusts assortments accordingly.
This ensures each store caters to its unique customer base, driving sales and improving the shopping experience.
Real-Time Inventory Management
Gone are the days of guessing if the shelves are stocked. Merchandise planning software, powered by in-store AI technologies like RFID and sensors, takes real-time inventory management to the next level. Here’s how it works:
- RFID Integration: Merchandise planning software uses RFID data to provide real-time updates on inventory levels, automatically generating restocking recommendations.
- Replenishment Alerts: Smart badges worn by employees collect data passed to the merchandising software, notifying staff when specific items need restocking.
- Stock Optimization: The software also analyzes inventory turn to forecast replenishment needs, ensuring popular items are never out of stock.
This seamless system ensures shelves stay stocked, and customers always find what they’re looking for.
Sales Associate Feedback
AI can process and analyze feedback from sales associates quickly and efficiently. Merchandise planning software uses this data to make smarter decisions. Here’s how:
- Inventory Adjustments: The software analyzes associate feedback to recommend inventory changes based on direct customer interactions, ensuring the right products are always available.
- Merchandise Optimization: Associates’ input about what customers want is used to fine-tune assortments, displays, and product offerings.
Combining sales associate insights with merchandising software, brands can ensure their inventory strategies align closely with customer needs.
Supercharged Strategy: In-Store AI + Merchandise Planning Software
By pairing in-store AI technology and merchandise planning software, stores can make smarter, faster, and more informed decisions. It’s a win-win: customers get a better shopping experience, and brands cut costs and improve efficiency.
Ready to elevate your merchandising strategy? Find out how Toolio can help you leverage AI technology to optimize your inventory, enhance customer experiences, and drive results. Speak to an expert!
