Markdown Optimization

Markdown Optimization & Planning

Retailers' solution for the optimal clearance of inventory

Revionics Markdown optimization solution removes the guesswork of how deep and when to take a markdown to achieve your financial or inventory objectives. Retailers can set their Markdown objectives to optimize by profit, or by inventory reduction, enter the date parameters, and let the system recommend the best sequence of markdown steps to achieve their goals.

Use Markdown Optimization for a variety of reasons

• Seasonal products – Clear inventory at the end of a season or holiday (Pool Toys, Halloween Candy, Christmas Decorations).
• Assortment changes – Markdown products that have been discontinued or are no longer carried by the retailer.
• Date sensitive products – Ensure perishable products or date-sensitive products are cleared by their expiration date. Reduce shrink in the process.
• Store closings – Retailers can ensure they are not leaving money on the table when closing a store or a category.
• Forward buys – Take advantage of vendor price incentives to buy in bulk, while ensuring the product is cleared in the timeline desired.

Markdown Planning Includes On-Demand Modeling

Revionics Markdown features a variety of planning tools enabling retailers to plan and model markdown scenarios, real time.  Add or remove stores, change product associations,  or adjust inventory levels to see how different scenarios forecast. 

Localize your Markdowns

Uses item-store demand to predict inventory depletion as a function of time and price.   The system can predict consumer-level demand before the markdown begins, then adjusts proactively as new inventory depletion information is received. This on-the-fly adjustment ensures the system is responsive to the most granular of levels.

Benefits for Retailers

Increase sell-through & margin:  Revionics Markdown Optimization turns unwanted inventory into cash by improving sell-through rates and squeezing additional margin out of products identified for markdown or clearance.

Retailers have seen significant improvements in dollar sales, unit movement, and margin dollars as a result of implementing markdown optimization:

• Sales improvement of up to 5%
• Unit movement improvement of up to 10%
• Gross margin improvement of up to 10%

Source: AMR Research: "Survival Tips for Retailers in Recessionary Times," 03/04/08