How Inventory Intelligence Is Becoming the Single Biggest Divider Between Leaders and Laggards

This week’s Retail Reality Check newsletter is packed with stories about retailers and brands investing in technology. From Amazon launching one-hour delivery to Costco’s AI-powered personalization engine driving $470 million in a single quarter of e-commerce sales, from Boggi Milano achieving 99% inventory accuracy with RFID to AWG grocers using AI meal planning to boost basket sizes 22%, the headlines all point in the same direction.

The retailers that are investing in knowing what they have, where it is, and how to get it to customers faster are pulling away from everyone else. The gap is no longer closing. It is accelerating.

Walk into any retail store and you are looking at a level of operational failure so normalized we barely notice it anymore. Empty shelf spots. Products in wrong locations. Price tags that do not match what is actually stocked. IHL Group research puts the global cost of inventory distortion, including out-of-stocks and overstocks, at more than $1.7 trillion worldwide. That is roughly 5% of global retail revenue depending on the segment.

Two-thirds of that $1.7 trillion, approximately 66.9%, comes from out-of-stocks. The remaining 33.1% comes from overstocks. Both problems share a common root: retailers simply do not know what they have on their shelves with the precision that modern commerce demands.

And the relational damage runs deeper than the financial losses. According to IHL’s Shelf Intelligence Report, 65% of retailers report that inventory problems are creating moderate to extreme strain on their most valuable business relationships with brands and suppliers.

This Week’s Evidence: Technology Leaders Are Not Waiting

The newsletter this week reads like a case study in the divergence IHL has been tracking across our research. The retailers and brands that are investing in inventory intelligence, supply chain automation, and operational visibility are generating measurable returns. Those that are not are falling further behind.

Boggi Milano: From 90% to 99% Inventory Accuracy with RFID

Premium Italian menswear retailer Boggi Milano deployed Zebra Technologies RFID solutions across 105 of its 130 owned stores worldwide. The result: inventory accuracy jumped from 90% to above 99% in some stores. Boggi Milano had been using AI for restocking since 2019, but the AI system needed far better data accuracy than manual processes could deliver.

In our research, RFID is the number two all-time technology in terms of impact on the sales needle, second only to giving store managers mobile devices and getting them out from behind the desk. In IHL’s Closing the Execution Gap study, sales winners were 16x more likely to be using RFID than those who were not, and retailers using RFID reported 56% higher sales growth on average.

Costco: $470 Million in One Quarter from AI Personalization

Costco reported that AI-powered personalized product recommendation carousels on its online store drove more than $470 million in e-commerce sales in a single quarter, with digitally-enabled comparable sales surging 22.6%. Online traffic was up 32% and app traffic up 45%.

AWG SmartMeals: Independent Grocers Competing Through Intelligence

Associated Wholesale Grocers deployed the SmartMeals AI-powered meal planning assistant across nearly 100 member stores, with deployment at a member with more than 150 stores expected in Q2. The results so far: a 22% lift in average basket size and a 72% increase in loyalty signups at participating stores.

The SmartMeals platform was specifically designed to be accessible for independent operators that do not employ large IT teams, with the provider handling integration with existing loyalty and e-commerce systems. Platforms like this are precisely the kind of technology pathway mid-market retailers need to close the gap.

Amazon: Compressing the Last Mile to One Hour

Amazon debuted 1-hour and 3-hour delivery options for more than 90,000 products across hundreds of U.S. cities and towns. Prime members pay $9.99 for 1-hour delivery and $4.99 for 3-hour delivery, while non-members pay $19.99 and $14.99 respectively. Amazon’s same-day delivery now covers more than 9,000 cities and towns, and the company is also testing Amazon Now for 30-minute delivery on everyday essentials.

The Data Behind the Divide

IHL Group has been tracking this technology-driven performance separation across multiple research studies. The data is unambiguous.

Sales growth leaders (10%+ sales growth in 2025) are 482% more likely to be early technology adopters compared to sales growth laggards (flat or negative sales). And these same leaders experienced 343% higher agreement that technology delivers ROI within 12 to 18 months.

When it comes to inventory specifically, 2025 Profit Winners (10%+ profit growth) prioritize inventory visibility 208% higher than profit laggards (flat or negative profit growth). They invest 740% more in IT growth than laggards. And they are 94% more likely to be early technology adopters across categories.

The Checkout-Free Lesson: When Technology Outpaces the Customer

Not every technology bet pays off on the timeline retailers hope for. Aldi UK closed its only Shop & Go checkout-free store in Greenwich, converting it to a standard Aldi Local with self-service. The store launched in 2022 during a wave of enthusiasm for checkout-free retail. Amazon similarly retreated from its Just Walk Out powered Amazon Fresh stores in the UK.

IHL Group data shows that fast followers are 191% more likely than average to agree that technology delivers ROI within 12 to 18 months, while early adopters are 300% more likely to strongly disagree. Early adopters take more chances in hopes of gaining competitive advantage, but fast followers often demonstrate proven ROI because they implement technologies that early adopters have already validated. The checkout-free experience illustrates this dynamic: the concept may eventually prove transformational, but the market was not ready for it at this scale.

Supply Chain Intelligence Goes Global

Several stories this week point to the global expansion of supply chain intelligence.

Bonduelle Group, operating 113 distribution centers and managing approximately 10,000 SKUs across canned, frozen, and fresh portfolios, selected RELEX Solutions to unify its entire supply chain planning. Daiso, one of Japan’s most recognized discount retailers with 4,625 stores and 20-plus distribution centers, made the same choice to replace rule-based ordering with AI-driven forecasting and replenishment. Norwegian beauty retailer Fredrik & Louisa expanded its RELEX deployment with AI-assisted diagnostics to proactively identify and resolve stockouts across 60 stores.

Perry Ellis deployed RAIN RFID tunnels at its Atlanta distribution center to automate post-picking validation, processing up to 1,000 boxes per hour and reading up to 600 items per box. The result: a 17% reduction in discrepancies and substantial savings in chargeback penalties, which can reach up to 20% of invoice value.

The common thread across all of these deployments is a shift from manual, judgment-based processes to automated, data-driven operations.

Lightning Round: More Notable Moves This Week

Dollar General reported $42.7 billion in FY 2025 net sales (up 5.2%), with plans for 450 new U.S. stores in 2026 plus 4,000 remodeling projects. Its retail media network delivered approximately $170 million in volume, and the retailer now has more than 100 million marketable customer profiles.

Levi Strauss & Co. is 60% through a global SAP ERP overhaul, upgrading distribution centers with Maersk automation and building an agentic “super-agent” AI orchestration system with Microsoft.

Dine Brands Global (IHOP, Applebee’s, Fuzzy’s Taco Shop) reported a 60% interaction rate with its AI recommendation engine, far above the 20% many brands achieve with digital marketing tools. VP Chris Padilla attributed this to predictive machine learning trained on known menu data rather than generative AI.

Lowe’s now fields about a million questions per month between its customer-facing Mylow assistant and the associate-facing Mylow Companion, tailoring responses across DIY and professional customer segments.

Coca-Cola detailed its multi-year digital roadmap focused on connected global data and local precision, appointing a new CDO to unify digital teams across the enterprise and investing in AI-powered personalization at the point of sale.

Walmart continues to apply technology to sustainability, deploying AI-enabled void-fill automation in e-commerce fulfillment and testing RFID-enabled labels in fresh food departments to improve inventory visibility and reduce food waste.

Nestlé USA deployed SPARETECH’s AI-powered tool integrated with SAP to standardize spare parts data across factories, cutting part search time by 50% and enabling cross-site inventory collaboration that reduces redundant stocking of high-cost critical spares.

Vusion and Qualcomm launched the “AI-Native Store” concept already adopted by Walmart and Carrefour, integrating embedded AI and Bluetooth Low Energy into retail shelves. Employees could save 60 to 90 minutes of manual checking per person per day, and retailers expect 1.5 to 2 points of operating margin improvement.

Skullcandy partnered with Riskified for AI-enabled fraud prevention through Shopify, achieving a 4x increase in approved revenue while maintaining a 0.06% chargeback rate and reducing fraud review time from 30 minutes to 5.

What This All Means

Every story in this week’s newsletter reinforces the same conclusion that IHL Group research has been documenting across multiple studies: inventory intelligence separates winners from losers in modern retail.

The retailers winning today are investing in the operational foundation that makes every other technology work: accurate, real-time visibility into what products exist, where they are, and how to move them to the customer.