Markdown Price Optimization
Optimize Your Markdown Strategy with Precise AI-based Demand Forecasting to Maximize Revenue and Reduce Overstock.
Predict, Plan, and Profit
Optimize Markdown Strategy for Increased Sales and Profits
Minimizing the need for unnecessary markdowns is a complex challenge. Improper discounting often leads to wasted revenue, slow-moving inventory, and unclear pricing strategies. Before we can decide how much to markdown, we must first determine what items need attention and when the ideal time periods are to take action.
Our Markdown Optimization solution tackles this challenge by optimizing the timing, levels, and stages of markdowns. It enhances product lifecycle visibility, minimizes profit erosion, and boosts sell-through rates, all while aligning markdown strategies with customer demand. This ensures each pricing decision drives profitability, clears inventory efficiently, and maximizes sales potential.
Enhance Product Lifecycle Control
Identify Candidates for Markdown
Optimize Price Discounts
Minimize Margin Erosion
Churchill’s Markdown Price Optimization™ (MPO) software empowers retailers to manage item pricing across the entire lifecycle by predicting when and how to adjust markdown prices. These recommendations are engineered to meet the retailer’s predetermined business objectives. By combining Churchill’s powerful Short Life Cycle Demand Forecaster™ (SLC) with our industry-leading price elasticity engines, retailers can identify what items are underperforming and eligible for a pricing action, when to take markdowns, and the best price discount to maximize revenue and clear inventory.
Key Benefits
Improved Product Lifecycle Management
By predicting the full season demand for an item through it’s entire lifecycle, retailers can enhance profitability and pinpoint underperforming product. This approach ensures products are sold at the best price based on their age, demand, and seasonality, helping to improve their sell-through performance and minimize the risk of unsold inventory.
Optimized Pricing Decisions
Optimizing markdowns ensures that price reductions are implemented at the right time, based on accurate demand forecasting and market trends. This leads to more sales at the optimal price point, increasing total revenue without eroding profit margins. Instead of random markdowns, a strategic approach uses data to ensure each price cut continues to maximize profits rather than simply clearing inventory.
Maximize Gross Margins
Without a proper markdown strategy, retailers can face unnecessary losses through excess discounting. Optimizing markdowns ensures that you avoid drastic price cuts that severely impact profits. The key is to apply the right level of markdowns that still maintains an acceptable profit margin while driving the necessary volume of sales.
Retail-Specific Features
Our Markdown Optimization solution is built to support multiple roles across various departments. From Pricing Managers to Retail Analysts and Revenue Leaders, we provide the insights needed to optimize markdown strategies, forecast demand, and align promotions with your business goals.
Pricing Manager
- ✔Predict the impact of markdowns on sales
- ✔Forecast when markdowns are most likely to drive increased consumer demand
- ✔Refine markdown strategy and drive revenue growth
- ✔Predict demand and ensure that inventory is aligned with actual sales trends
- ✔Forecast the effectiveness of different markdown levels and promotional timing
Demand Planner
- ✔Use advanced analytics to predict consumer demand at the SKU, item, store or region level, helping inform pricing adjustments for optimal sales
- ✔Forecast when markdowns are most likely to drive increased consumer demand
- ✔Align markdown strategies with inventory levels
VP of Finance
- ✔Ensure that promotional activities are aligned with revenue targets and profitability objectives
- ✔Drive increased revenue by ensuring markdowns are strategically applied to match demand
- ✔Gain a comprehensive, data-driven perspective on pricing and markdown strategies across the entire organization
- ✔Minimize unnecessary discounting that erodes profitability
- ✔Achieve more accurate revenue forecasting by understanding the impact of markdowns on sales