Typically, retailers take a historical approach when considering how much and when to mark down a product. They frequently allow their buyers to treat markdowns as an art rather than a science by employing their "instinct" to make subjective markdown decisions. This can often lead to missed opportunities to improve profit margins.
Smarter retailers know they need to leverage markdown effectiveness , deploying science-based approaches that make markdown decisions more objectively and strengthen the margin dollars on their exit strategies. The intention of markdown optimization is to streamline and standardize analysis and decision-making for the entire markdown process.
The following article from PwC Canada's Retail Consulting Services discusses the four principles of rules-based markdowns and how Canadian retailers can best leverage them to improve and strengthen their bottom lines.