merchandise, manually receiving inventory, and auditing stock, Naik says. Just as important, inventory accuracy often jumps from roughly 85 to 90% in a non-RFID environment to 98 to 99% with RFID, which reduces stockouts and errors, and improves omnichannel fulfillment. 10 POSITION INVENTORY DYNAMICALLY Rather than rely on fixed inventory allocation rules or historical sales patterns to position inventory, retailers today need to continuously adjust inventory locations based on changing demand, Ponce says. By combining real-time inventory visibility with AI-enabled demand forecasting and advanced analytics that considers historical sales along with real-time signals—such as customer searches and promotions—retailers can better anticipate where demand is likely to increase. They can then position inventory closer to customers even before orders are placed. 11 LEVERAGE SOURCE- TO-STORE DATA COLLECTION Source-to-store data collection systems enable retailers to make faster, smarter decisions, says Tony D’Onofrio, president of Sensormatic Solutions, a provider of retail technology. These systems collect item-level visibility data throughout a product’s journey, from manufacturing and distribution to the store floor and point-of-sale system. Retailers can better understand where merchandise is and how it moves through the supply chain. The data itself can be relatively simple, such as, “this item was detected at this location at this time,” D’Onofrio says. But when the information is connected across the supply chain, it helps retailers improve inventory accuracy, reduce shrink, and ensure products are available when and where shoppers expect them, among other benefits. Because the data creates a continuous
view of merchandise movement, it also helps retailers optimize labor and make more informed replenishment decisions. 12 INVEST IN TALENT Technology is only as good as the people who understand how to deploy it, Beitelspacher says. As technology becomes more sophisticated and strategically important, organizations need employees who are adaptable and critical thinkers to be effective stewards of this technology. 13 DEVELOP A REVERSE LOGISTICS STRATEGY The return rate for online purchases is nearly three times that for purchases completed at brick-and-mortar stores, at 24.5% versus 8.72%, according to Capital One Shopping. Given these return rates, along with tight margins and the expense and reputational costs of moving returned goods to landfills—where about 80% of returns end up, Petit estimates—or liquidating unsellable goods for pennies on the dollar, retailers need to prioritize reverse logistics as a real strategy, not a clean-up function, she says.
Once again, AI-powered tools can help. On the front end, solutions such as virtual try-on technologies can enable more informed purchasing decisions, Ponce says. That can reduce returns from the start. AI can also facilitate smarter and faster decisions about handling returns, Petit says. For example, it makes no sense to ship a returned product to a warehouse across the country if it’s not going to be put back into stock. One option, LiquiDonate, can identify nonprofits that can use the product and are within about 30 miles of customers’ homes, Petit says. To consumers, the process is no different from any other returns. 14 CREATE CONNECTED EXPERIENCES Over the next few years, successful retailers will integrate across all channels, so the consumer experience doesn’t feel disconnected, McManus says. Customers may discover a product on Instagram, ask about it at an event, buy it in-store, or reorder it online. “The supply chain has to support that full journey,” she adds.
Scenario Modeling in Retail Supply Chains Scenario modeling is the practice of creating digital “what-if” simulations to stress-test how a supply chain responds to potential disruptions or market shifts before they actually happen. In retail—where demand spikes, port congestion, supplier failures, and sudden freight inflation are constant risks—relying solely on static forecasts leaves businesses vulnerable. Scenario modeling allows supply chain teams to build dynamic digital twins of their network to simulate unpredictable variables: • Supplier crises. What if a primary overseas manufacturer shuts down for three weeks? • Demand volatility. What if a viral social media trend increases product demand by 50% overnight? • Logistics bottlenecks. What if shipping costs double or key transit corridors stall? By running these simulations, retailers evaluate trade-offs between speed, cost, and service levels. Rather than reacting blindly when a crisis hits, leaders can pre-script operational playbooks, such as automatically rerouting inventory, activating regional backup suppliers, or adjusting safety stock thresholds. Ultimately, scenario modeling shifts retail supply chains from reactive fire- fighting to proactive resilience, protecting both profit margins and customer trust in an unpredictable market.
August 2026 • Inbound Logistics 35
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