Markdown Optimization

Align Inventory Clearance with Business and Financial Objectives 


Markdown Management, Optimization & Analysis

For leading retailers, optimizing markdowns to local shopper demand provides an opportunity to maximize margin, sell-through, and inventory value while improving velocity of product assortment.

Providing one solution to plan and manage localized cadence and discount for both short and long life cycle merchandise, Revionics® Markdown Optimization simulates performance on-demand and adaptively remodels to trends in order to recommend strategic, granular markdowns that are prioritized to objectives.

Using this proven process and taking the emotion out of markdown decisions enables retailers to rapidly respond to local shopper behavior and inventory depletion rates. Capitalizing on the low hanging fruit found beneath the ‘too everywhere’ cover of enterprise-wide markdowns eliminates:

  • ‘Too much too soon’ causing stock outs & margin loss
  • ‘Too little too late’ causing excess stock & impacting new product sales

From Food to Fashion: Science-Based Markdowns

Markdown Optimization combines best-in-class science with thoughtful workflow designed to minimize markdown spend while maximizing inventory potential for all products- from basic replenishables to seasonal and fashion merchandise:

  • Process

    Supports both event driven markdown item selection and ongoing in-season item recommendation, ensures proper timing, frequency and depth, prioritizes recommendations within constraints, and continuously adapts ongoing markdown plans to achieve objectives.

  • Science

    Leverages local shopper price sensitivity, inventory, allocations, on order, seasonality, holiday, event and promotional impacts, opportunity cost of delay, vendor deals, weather data and more.

  • Strategy

    Drives to profitability, inventory clearance, sell-through, exit date, salvage value and blended strategic objectives.

  • Rules & Constraints

    Recommendations are prioritized within the bounds of business rules, operational constraints and budget limitations to ensure the most impactful marks are selected.

Key Solution Features

Make in-season merchandise plans a reality and execute assortment rationalization decisions as profitably as possible by planning, budgeting, executing, analyzing and adapting to trends more effectively with Revionics® Markdown Optimization.

Revionics best-in-class features include:

  • Markdown calendar management
  • Promotional conflict visibility
  • Store/item level optimization
  • Weekly, on-demand & adaptive modeling
  • Daily/weekly POS & inventory data update
  • Real-time 'what-if' strategy simulation & comparison
  • Recommendation prioritization to budget, opportunity cost
  • DC Inventory allocation recommendations
  • Forecast-to-actual reporting with flexible rollups
  • Markdown approvals process
  • Automated rules management
  • Flexible rule-sets:
    • Consistency
    • Markdown eligibility
    • Ending numbers
    • Preferred step number & frequency
    • Execution gaps/lead-times
    • Min/max discount

Scenario simulation and recommendation prioritization enable users to select the most effective strategies and execute the most impactful markdowns when faced with labor and budget constraints. Flexible rule-sets ensure consistency groupings (i.e. style, color, size, attribute, price family) are maintained and only products eligible for markdown are selected. Adaptive remodeling capabilities adjust next marks to current trends, ensuring that discounts and steps that are not required to meet objectives are removed while underperforming stores and items are accelerated.

Markdown Optimization Benefits

Retailers who use Revionics® Markdown Optimization see 11-20% Sales Increases, 5% Gross Margin Gains, 4.5-12% Capture Rate Improvements and a 91-94% Forecast Accuracy.

  • Minimizes markdown spend & controls budget expenditures
  • Maximizes inventory value, sell-through rates & profitability
  • Permits a granularity in decision-making not achievable in spreadsheets
  • Models & recommends location specific start dates, cadence & discount
  • Integrates most current data & trends into ongoing markdown decisions
  • Drives to strategic objectives for profit, inventory clearance & exit-dates
  • Simulates impact of alternative scenarios for timing & depth prior to execution
  • Prioritizes recommendations for opportunity cost, labor & budget constraints
  • Maintains consistency for style, color, size & other user-defined attributes
  • Automatically measures & adapts recommendations to current trends

Life Cycle Pricing Solutions

Promotion Optimization | Price Optimization| Markdown Optimization