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Coresight Matrix: Inventory-Optimization Software

Executive Summary

The Coresight Matrix series is designed to help Coresight Research clients better understand what is happening in key segments and with key players in retail technology.

  • In this report, we look at new developments in inventory optimization software, and use our Coresight Matrix to rate leaders and emerging players by innovation effort and market power.
  • Retailers remain under ever-increasing pressure to manage their inventories better to position the assortment at the right place, in the right amounts, at the right time, to prevent excessive discounting and stock-outs.
  • Optimizing inventory has significant financial implications for the cash flow and profitability of a retailer, since inventory requires working capital, discounting hurts margins and stock-outs hurt sales.
  • Continuing advances in computing power and software engineering enable ever more-powerful tools for analyzing inventory, which is enhanced by predicting demand.
  • Machine learning (ML) and other artificial-intelligence (AI) tools can help predict demand, and companies using AI and predictive analytics to forecast demand can use these tools to predict and move towards optimal future inventory configurations. Companies employing AI/ML include IBM, Infor, Optoro, Nextail Labs, SAP and Trax Retail.
  • Inventory-optimization software spans several multibillion-dollar markets, including supply chain management, warehouse management and analytics, and the software links to order-management and fulfillment systems.
  • Players in the segment include ERP-software giants such as IBM, Oracle and SAP, in addition to several emerging innovators, including Celect, Nextail, Optoro, Relex, and companies in between.

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