Science and demand forecasting to identify and execute optimal markdowns

Use data-driven markdowns

Coop Danmark boosts sales and profits with analytics

IBM® Markdown Optimization, formerly DemandTec® Markdown Optimization, uses science and demand forecasting to help design markdown plans with optimal timing and depth. It helps optimize profitability and meet inventory on-hand objectives for virtually every clearance item in stores and online.

IBM Markdown Optimization can help you:

  • Optimize markdown timing and depth to achieve inventory, profit and revenue objectives.
  • Develop plans for individual stores, zones or chains based on store-specific customer demand.
  • Automate weekly markdown pricing processes to reduce manual tasks and streamline the markdown process.

Optimize markdown timing and depth

  • Use the advanced science of consumer demand management to optimize markdown timing and depth.
  • Work with item-level modeling and optimization to capture the elasticity of individual items at the store level.
  • Set primary and secondary goals to reduce inventory, optimize profit or increase revenue.
  • Specify a maximum number of markdown price changes, the depth of each change and other constraints to help create markdown plans that comply with existing retailer policies, processes and infrastructure.

Develop plans for individual stores, zones or chains

  • Devise markdown plans based on the price elasticity and inventory position at individual stores.
  • Allow stores or zones to share the same schedule, or let individual stores execute their own schedule to optimize overall plan performance.
  • Create, forecast, compare and evaluate multiple markdown pricing scenarios to fine-tune markdown strategies before prices become effective in stores.

Automate weekly markdown pricing processes

  • Create and initiate automated markdown plans and scenarios based on category or class-specific rules defined by the retailer.
  • Enable merchants to log into the system to review the results of planned optimizations.
  • Closely monitor the performance of markdown plans through extensive reporting capabilities.
  • Automate the process of weekly re-optimizations to adjust markdown intervals and tactics midway through a markdown plan based on sales performance and plan objectives.

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