Retailers using high-tech solutions to manage inventory


At Lowe’s, store managers can whip out iPhones to look up whether any item at the home improvement store is in stock. (Michael Dwyer/AP)

At Lowe’s in Gaithersburg, Assistant Store Manager Chad Wallace can whip out an iPhone to look up whether any item at the home improvement store is in stock. Gone are the days of heading to a computer kiosk, checking the stock room or calling other stores in the area.

“It’s been a great tool for helping customers right there on the spot,” Wallace said. “A lot of customers are impressed that we’re able to use the phone to scan something on the shelf and find out the quantity.”

The store has about 25 mobile devices outfitted with store applications that allow employees to ring up sales, view competitors’ prices and track inventory without leaving a customer’s side.

Lowe’s purchased 42,000 iPhone 4s to for its stores across the country in September as a part of a larger information technology investment. The Mooresville, N.C.-based company is banking on the enhanced infrastructure to improve efficiency in customer service and product distribution. Lowe’s declined to discuss the results of its efforts.

Retailers are pouring more money into software and technology to better align and automate the distribution of goods. In a recent study by Auburn University and the Retail Industry Leaders Association, more than 80 percent of merchants surveyed planned to maintain or increase spending this year.

Tracking product demand via mobile devices, or other forms of technology, analysts say, can offer a more precise method for ordering, storing and restocking merchandise.

Keeping tabs on inventory

Merchants have been stingy in their inventory decisions as evidenced by the 0.6 percent increase in stockpiles in April, according to the most recent data from the Commerce Department. The instability of the recovery, with peaks and valleys in consumer spending, has made stores vigilant about inventory management.

“Retailers are using big data to shorten the replenishment cycle of their products. We’re seeing that more as networks have become more reliable, they can pull the data and have better tools to process and manage it,” said Steve Stone, senior vice president of cloud intelligence at MicroStrategy, a Tysons Corner-based data mining outfit.

Stone said more retailers are managing inventory with the use of radio frequency identification devices that use intelligent bar codes to track products. The high price per unit — starting at $25 — has given retailers pause.

Wal-Mart, Stone noted, has used the technology to tag and track denim apparel and menswear. Activity is generally strongest among big-box retailers and department stores, who frequently fall victim to high rates of theft.

MicroStrategy, for its part, provides retailers insight into their performance through software that allows them to analyze sales trends, operations and inventory. The company works with eight of the top 10 global retailers, including The Container Store and Royal Ahold, the parent company of Giant Food.

Newer entrants inretail intelligence are coming up with innovative ways of helping merchants move goods. Annandale-based Lemur Technologies has created an iPad app, Lemur IMS, to connect consumers with stagnant inventory. Stores input a customer’s desired product, then alerts them to sales.

“We’re looking at how quickly we can move a product before having to take a large markdown,” founder Will Fuentes said. “If the markdown is two weeks away and going to be 50 percent, we check whether anyone in the local area wants it at, say, 25 percent.”

Fuentes said the company, founded in 2011, is in the process of wrapping up its first contract with a national chain, whose name he declined to disclose.

Danielle Douglas covers the banking industry for The Washington Post.
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