Macy’s adds AI forecast overlay to replenishment operations
Macy’s Inc. began rolling out an artificial intelligence forecast overlay to its inventory replenishment system after announcing the capability on a Sept. 10 earnings call. The tool is moving from pilot to broader rollout as part of a plan expected to generate $235 million in supply-chain savings by 2026.
The AI overlay is designed to improve in-stock levels and drive inventory efficiencies by refining replenishment forecasts. Macy’s said inventory was up 2.5% in the second quarter, aligning with sales growth, as it heads into the fall season. The initiative is part of the retailer’s three-point transformation plan launched in 2024, which includes closing unproductive supply‑chain centers and opening an automated facility in North Carolina. Macy’s expects to realize those supply‑chain efficiencies in the second half of 2026, a shift it says will benefit gross margin.
“In total, we expect to realize supply chain efficiencies in the second half of 2026, which will benefit gross margin,” Tom Edwards, COO and CFO, Macy’s said.
“The AI capability is currently moving from pilot to broader rollout in a bid to improve in-stock levels and drive inventory efficiencies,” Tom Edwards, COO and CFO, Macy’s said.
Macy’s launched its “Bold New Chapter” transformation plan in 2024 to improve end‑to‑end operations, including closing unproductive supply‑chain centers and opening an automated facility in North Carolina. Other retailers are also pursuing AI‑driven inventory improvements; Target has built a digital twin of its middle‑mile inventory system, while Lowe’s is expanding its partnership with Relex Solutions and Kohl’s has reported smoother spring receipts from allocation adjustments.
What we know
Macy’s Inc. is adding an artificial intelligence forecast overlay capability to its replenishment operations, according to a Sept. 10 earnings call.
The AI capability is currently moving from pilot to broader rollout in a bid to improve in-stock levels and drive inventory efficiencies, Edwards said.
Macy’s has been advancing on a three-point transformation plan that focuses heavily on its supply chain that was expected to drive $235 million in savings by 2026.
Inventory was up 2.5% in Q2, in line with its sales growth.
“In total, we expect to realize supply chain efficiencies in the second half of 2026, which will benefit gross margin,” Edwards told analysts during the earnings call.