Markdown Price Optimization™ (MPO)

Manage the lifecycle of each item in a category by store by reducing/ maximizing markdown prices.

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Churchill’s Markdown Price Optimization™ Software

Two Powerful Forecasting Applications in One Optimized Solution

Churchill’s Markdown Price Optimization software solution combines the power of two proven Churchill products: Short Life Cycle Demand Forecaster™ (SLC) for sell-through forecasting and Promotional Demand Forecaster™ (PDF) for price lift forecasting.

Recommended pricing action include:

  • When to take markdowns
  • The number of markdown levels (stages) that are best for the category
  • The specific price discount that best achieves the business objectives (revenue, clear inventory, etc.)

Targeted Price Changes

Identify and Act on Underperforming SKUs

Churchill’s Markdown Price Optimization™ (MPO) starts by tracking seasonal SKU locations, flagging those projected to miss, meet, or exceed sell-through targets.

Once potential problem areas are identified, MPO analyzes various pricing options to maximize financial benefit. If a profitable alternative is found, MPO provides a recommended pricing action for approval, allowing for targeted, data-driven adjustments to optimize sales and margins.

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Enhance Profitability and Optimize Pricing Outcomes

Each markdown decision directly impacts your bottom line. Instead of broad markdowns that risk eroding margins or leaving inventory untouched, we use data-driven insights to help you reach your business goals with precision.

How to Maximize Profit Without Holding Excess Inventory?

Halloween items, close-out merchandise, seasonal apparel, and other short lifecycle products present a unique challenge: how do you protect margins without holding onto inventory longer than necessary?

Once these SKUs hit store shelves, the options for adjusting strategy are limited. While moving inventory between locations is possible, your most effective tool for managing sell-through is pricing.

With pricing as your primary lever, the question becomes: how do you optimize these adjustments to maximize profitability and maintain inventory flow? 

Churchill’s Markdown Optimization Solution

This low-cost, quick-to-implement service requires no software installation and delivers actionable pricing recommendations within 90 days.

Each week, Churchill’s team provides tailored suggestions aligned with your pricing rules, including options for:

  1. In-season promotional markdowns
  2. Clearance markdowns
  3. A blend of promotional and markdown pricing — whatever approach will outperform your current strategy.

These recommendations are delivered in easy-to-read reports for Merchants and as system-ready files for seamless integration, ensuring smooth and effective implementation.

Boost Open-To-Buy Funds and Improve Gross Margins

With Churchill’s Markdown Optimization Solution, retailers can unlock additional Open-To-Buy funds and significantly improve gross margins.

In a large-scale, controlled test last year, this service helped a Five Billion Dollar Retailer boost its GMROI by a full two percentage points (+2%).

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Quick Implementation

Fast rollout, requiring no software installation and delivering actionable insights within just 90 days. With minimal setup, your team can start receiving weekly, tailored pricing recommendations that align with your unique business goals.

Increased Open-To-Buy Funds

By strategically managing markdowns, the solution frees up capital tied to unsold inventory. This creates additional Open-To-Buy funds, enabling you to reinvest in fresh stock and high-demand items.

Maximized Profitability

By aligning markdowns with true demand and sales potential, this solution minimizes unnecessary discounts and protects margins, ensuring that each pricing adjustment contributes to your overall profitability.

Relevant Resources

Industry-News

Lifecycle Pricing and Consumer Psychology

Pricing shapes how customers perceive value and make buying decisions. This blog explores how AI-based pricing strategies—from regular pricing to clearance—can influence shopper behavior, maximize revenue, and maintain brand integrity throughout the product lifecycle.

March 21, 2025

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