Markdown Optimization

Improving the sale of discounted items

We are by far the leading consulting firm in the industry in helping retailers capitalize on markdown optimization technology.

In addition to being the only consulting firm to have successfully and fully implemented markdown optimization technology packages, we've done it 11 times for retailers. Further, we have helped a number of additional retailers get major returns on markdown optimization software that the software vendor had implemented before we were brought in.

Recently, PwC Canada’s Retail Consulting Services practice commissioned a major primary research study on 90% of the then-23 retailers that had previously implemented markdown optimization software packages. Key findings from the study found that chains that worked directly with the software provider and did not have a dedicated consulting firm to ensure the processes, policies and organization roles were appropriately considered and redesigned did not meet their goals. In contrast, the retailers that worked with PwC Canada's Retail Consulting Services in implementing markdown optimization software all met or exceeded their goals, generating financial returns far in excess of their investments in the software and our firm.

The results of the research study on markdown optimization were published in the prestigious fashion industry publication Women's Wear Daily.

We have implemented both leading markdown optimization technology providers: Oracle Retail (formerly Profit Logic), which today has more than 90% market share in this area, and SAS. And we have helped retailers that implemented these systems without us but struggled to get value from them generate high returns on their investments.

We have also helped many retailers develop ground-breaking markdown optimization approaches including both zone and regional markdowns and new or unconventional pricing cadences. We do so by introducing a rigorous approach that delivers meaningful payback in as quickly as six months.

We have extensive experience in helping retailers' buying and planning groups to adapt their key processes to deal with the impact of markdown optimization technology. These include the impact of promotional strategies and related markdown cadence, the introduction of key exit dates prior to the introduction of the following season's floor sets, and many others. These groups require customized coaching and training not just on the technology but also on the related process and role changes. This enables markdown technology to become an indispensable tool for the business, not just another piece of underused technology. Our deep "leading practice" experience in this area has generated meaningful returns for our clients.

Alternatively, because software packages can be expensive and take time to implement, we have developed a proprietary, less-costly, ROI-based approach to enhancing the markdown process with shorter time to benefits. This approach uses the Retail Consulting Services ROI first "rules-based" markdown approach, which draws from much of our learning from markdown optimization in the process, policy and reporting areas. It also provides a more standardized and objective process.

Markdowns can be an emotional and unscientific decision. We partner with retailers that want to reduce that subjectivity and improve their gross margin return on inventory investments (GMROII). Whether you are considering a markdown optimization software purchase or you just believe your markdown strategies need a "tuning," we can create value for your company.

Contact us to find out how we can help your business.