Christmas shopping may feel months away, but Arizona retailers are already stocking up. And some are using artificial intelligence to guide their orders.
Hitendra Chaturvedi, a supply chain management professor at Arizona State University’s WP Carey School of Business, said many retailers began placing holiday orders months ago, with some starting as early as April and May.
“While most of us are on vacation holidays and the Arizona heat — sitting by the pool — retailers are already ordering,” Chaturvedi told KTAR News 92.3 FM.
How are tariffs influencing the decisions retailers make?
Tariffs are a major reason retailers have been ordering earlier this year, Chaturvedi said, explaining that imports through the Port of Los Angeles were about 5% higher year over year as of April before jumping 26% in May.
“They were trying to get away from tariffs, so they tried to order a bunch of stuff earlier on so that they can beat the tariff,” he said.
But that doesn’t mean retailers are overstocking. Chaturvedi said retail sales have been up about 5% on a three-month rolling basis, while inventories have increased about 3%.
“They are front-loading it, but they are not buying a lot,” he said. “They are being very, very cautious.”
What can shoppers expect closer to the holidays?
Chaturvedi said September will be a key month for retailers and supply chain experts because that is when companies will have a clearer picture of whether early expectations are turning into actual sales.
“It is only around September when they are going to see the real data come in,” he said. “It is when the reorders start to happen.”
AI is also expected to play a bigger role this holiday season. Chaturvedi said many retailers are investing in AI tools to help forecast demand and decide which products to stock.
“This Christmas, it is not going to be Walmart wins or Target wins,” he said. “It’s going to be Walmart’s AI versus Target’s AI.”
He said the holiday season could become a major test of whether AI can help retailers better predict what shoppers want while avoiding excess inventory.
“If AI really enables retailers to buy what the customer wants and we come out with very low inventory and good retail sales, AI is here to stay,” Chaturvedi said.
KTAR News 92.3 FM’s Chris Havlin contributed to this report.
