Why is inventory squeezing profits? — AI Data Inc. announces "AI RetailBooster on IDX" AI optimization model to rebuild retail with "demand and price optimization"

AI Data Inc. (Headquarters: Minato-ku, Tokyo; President: Takahito Sasaki; hereinafter "AI Data Inc."), a company specializing in the utilization of corporate data and AI, has launched a new "demand and price optimization solution" within "AI RetailBooster on IDX," which utilizes the optimization AI "AI Komei on IDX." This solution focuses on "inventory structure," a major cause of declining profitability in the retail and distribution industries.

The purpose of this solution is to comprehensively optimize demand forecasting, pricing, and inventory management, thereby fundamentally restructuring the profit models of the retail industry.

## Background: Why do retailers make sales but not profits?

Currently, the retail industry faces the following intensifying challenges:

- Simultaneous occurrence of excess inventory and stockouts
- Profit pressure due to markdowns
- Increase in disposal losses
- Intensification of demand fluctuations

Despite maintaining and expanding sales,
- Profit margins are declining
- Inventory costs are increasing

Such situations are occurring in many companies.

The structure of "selling but not making a profit" has become the norm.

## The essence of the problem: Inventory is not a "result" but the "core of management"

In the retail industry, inventory is not merely a result.

It is a collection of decisions such as:
- Which products to procure
- At what price to sell
- When to replenish

However, currently,
- Demand forecasts and procurement do not align
- Pricing strategies are not adjusted in real-time
- Optimization is done department by department

This creates an "inventory structure that squeezes profits."

## Solution: Demand and Price Optimization AI "AI RetailBooster on IDX"

"AI RetailBooster on IDX" supports decision-making in the retail industry with AI, achieving optimization of inventory, pricing, and procurement.

1. Data Integration (IDX)
- POS data / Inventory data / Procurement and sales data / Customer and purchasing behavior data
Are aggregated in IDX, and AI Komei analyzes and visualizes them across the board.

2. AI Analysis and Prediction
- Demand forecasting / Sales trend analysis / Product turnover rate analysis
AI analyzes best-selling products and demand trends based on accumulated data.

3. Optimization Engine
- Optimization analysis of inventory levels
- Analysis of pricing strategies and recommendation of optimal price ranges
- Proposal for optimizing procurement plans
AI supports and proposes decision-making for maximizing profits.

4. AI PMO (Execution and Operation Optimization)
- AI prepares progress management documents for inventory and pricing strategies
- Regular generation and analysis of KPI reports
- Continuous support for improvement cycles (Loop)

Achieving "retail management where AI continuously supports business decisions"
Achieving "retail management where optimization continuously cycles"

## Expected Benefits of Implementation

- Optimization of inventory and reduction of unnecessary excess inventory
- Reduction of disposal losses
- Improvement in the accuracy of markdown strategies
- Support for decision-making aimed at balancing sales and profits
- Contribution to cash flow improvement

*Effects vary depending on the scale of implementation and utilization.

Transforming inventory from a "cost" to a "profit-generating asset."

## Message

Until now, the retail industry has grown through:
- Sales expansion
- Store operational capabilities

However, from now on, it will be an era where "companies that can optimize inventory and pricing" will win.

Inventory is a management area that must be optimized.

## Future Development

Following the manufacturing, logistics, and retail industries, AI Data Inc. will expand "Optimization AI x AI PMO" to various other industries, including:
- Construction
- Finance
- Healthcare
- Energy

"All industries are optimization problems."

## About AI Data Inc.

Company Name: AI Data Inc.
Established: April 2015
Capital: 100 million JPY (Capital reserve: 1.525 billion JPY)
President and CEO: Takahito Sasaki
Location: Metro City Kamiyacho Bldg. 4F, 5-1-5 Toranomon, Minato-ku, Tokyo
URL: https://www.aidata.co.jp/

AI Data Inc. has been protecting and utilizing corporate and individual data assets for over 20 years, based on data infrastructure and intellectual property infrastructure. It has earned the trust of over 10,000 companies and more than 1 million customers. Its "Data Ecosystem Business," which encompasses data sharing, backup, recovery, migration, and erasure, has won the BCN Award for 17 consecutive years as the top-selling product. In data infrastructure, it provides IDX cloud data management and recovery services, and has also gained high recognition in the legal field through forensic investigations and evidence disclosure services, which received the Minister of Economy, Trade and Industry Award.

Meanwhile, in intellectual property infrastructure, it supports IP management and monetization through the construction of its group company's patent search and application support system 'Tokkyo.Ai' and an IP marketplace that enables patent trading. Integrating these, it offers a data and intellectual property fusion platform powered by generative AI 'AI Komei TM'.