Retailers hate markdowns. Discount an item too late, and
stores are stuck with truckloads of inventory. Too early,
and they lose profits as people snap up items thrown on the
bargain table prematurely.
- Wall Street Journal.
Seasonal products pose a unique problem : A limited selling
season during which profits must be maximized while residual
inventory minimized. When demand falls below forecasts, markdowns
must be employed to keep the inventory moving.
Markdowns have become an increasingly complicated problem
- now representing up to 40% of total sales in the retail
sector. Correctly determining when and how deep to discount
can make the difference of millions of dollars to the bottom
line. However, manually evaluating the right price to charge
in particular stores with differing inventory positions and
demand becomes a virtually unmanageable problem for any retailer.
IA Markdown Optimizer© can help. Markdown Optimizer automatically
determines the right price to charge for every SKU in every
store you have. Markdown optimizer firstly utilizes historic
POS data to forecast SKU-demand. IA's proprietary optimization
engine then determines the optimal pricing strategy to follow
given the inventory position and the remaining time left in
selling season. Markdown optimizer will ensure that you maximize
your profits while minimizing your residual inventory for
Sophisticated Forecasting - Markdown Optimizer uses IA's
proven demand forecasting engine which accurately predicts
the price and promotional responsiveness of every SKU in every
store you have. In addition forecasts are continually adjusted
as sales figures come in, thereby ensuring the markdown profile
matches actual demand.
Scenario Analysis - Markdown Optimizer gives you the flexibility
to perform optimization under differing demand and competitive
Inventory Optimization - Determining the amount to buy before
the selling season is as crucial as determining the optimal
markdown schedule. Markdown Optimizer uses historic category
trends to optimize opening inventory by SKU.