Inventory planning in 2026 has become harder because historical demand patterns are no longer stable. Tariff volatility, changing consumer spending behavior, and rising operating costs have made traditional forecasting models less reliable for SMB retailers.
The historical sales data that used to anchor forecasts has become less reliable because buying behaviour changed during tariff uncertainty (consumers pulled forward purchases, then went quiet), which means models trained on that data are producing distorted forecasts currently.
Safety stock levels set in 2023 are irrelevant in 2026. Lead times have changed (nearshoring shifts, freight volatility), supplier reliability has changed, and consumer demand patterns have shifted. Most companies still use arbitrary rules rather than data-driven calculations for safety stock - meaning they're carrying either too much or too little buffer against a supply chain that is measurably more volatile than when those rules were set.
Tariffs of 10-30% that raise landed cost overnight mean a retailer's margin model can be invalidated by a trade policy announcement. Retailers who don't have real-time visibility into their true landed cost per SKU are making ordering decisions based on cost assumptions that may already be wrong. This is an inventory planning problem as much as a financial one. You can't optimise order quantities if you don't know your true carrying cost.
89% of US companies still use outdated forecasting methods. Many of those methods use 12-24 months of sales history. But the last 12-24 months includes COVID-era buying patterns, tariff-anxiety pull-forward purchasing, and post-pandemic normalisation. Inventory imbalance and margin erosion are becoming permanent challenges, not seasonal exceptions - meaning the historical patterns retailers relied on no longer reflect true underlying demand.
E-commerce overselling increases 340% during peak seasons for multichannel retailers. A retailer selling across their own site, Amazon, and a physical store is allocating the same inventory pool across three demand streams with different velocity profiles. Without real-time allocation and forecasting per channel, they're either underselling online because they're holding too much back for physical, or overselling online and disappointing in-store customers.
The average company holds 30-60% excess inventory, while simultaneously losing 40% of sales to stock-outs. Both problems exist in the same business at the same time across different SKUs. The retailer is over-invested in slow movers and under-invested in heroes.
In a high-interest-rate, tariff-pressured environment, retailers must manage margins carefully and control inventory because every dollar of inventory needs to be pulling its weight.
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