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While robotics is already implemented in the e-commerce industry and commerce-related warehouses, the coming years will see machine learning and artificial intelligence contribute to the reduction of the risks of overstocking and understocking – among other benefits, boosting retailers’ revenue.

Overstocking costs retailers about $470 billion annually, according to one of the most recent estimates, this one from IHL Group. Understocking is even more expensive — about $630 billion in global annual costs. Algorithms — most notably, the ones used by Amazon — already help assuage both problems by predicting consumer demand “for hundreds of millions of products it sells, often as much as 18 months ahead,” according to The Economist. […]

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