PROBLEM
Our client, a big retail chain with hundreds of stores, was facing challenges in managing markdowns efficiently. Markdowns are price reductions on products that are implemented in order to clear out excess inventory or boost sales. The client was struggling to manage the markdown process across all of their stores, resulting in inconsistent pricing and sales results, as well as excess inventory.
SOLUTION
Our team was brought in to help the client optimize their markdown process. We started by conducting an analysis of the client's current markdown process and identified key areas for improvement. Our solution involved implementing a centralized markdown strategy that would be managed at the corporate level and rolled out to all stores.
To achieve this, we developed a markdown optimization model that would take into account various factors such as product performance, seasonality, and regional sales patterns. The model would help determine the optimal markdown prices and timing for each product, and provide guidance to store managers on how to implement the markdowns in their stores.
We also developed a web-based tool for store managers that would provide them with real-time information on markdown pricing and timing for each product, as well as performance metrics for their store. This would help them to better manage their inventory levels and sales results.
Finally, we worked with the client to train their store managers and employees on the new markdown process and tools, to ensure a smooth transition and successful implementation.
RESULTS
The client saw significant improvements in their markdown process and results after implementing our solution. Some key results included:
- A reduction in excess inventory levels, resulting in cost savings and improved profitability.
- More consistent pricing across all stores, leading to improved customer trust and satisfaction.
- Increased sales results, with the optimized markdown strategy resulting in more effective promotions and better overall sales performance.
- Greater visibility and control over the markdown process, allowing the client to make more informed decisions and react more quickly to changing market conditions.
Overall, our solution helped the client to achieve a more efficient and effective markdown process, resulting in improved profitability and customer satisfaction.
