What drives the need for markdowns?
The opportunity for making better informed markdown decisions is significant.
“Our market research indicates that markdown optimization can capture 5% to 15% of revenue subject to markdowns as virtually free incremental margin.
For example, a $1 billion retailer with 25% of revenue from markdown sales should be able to generate $12.5 million in incremental margin, 1.25 points, with an MDO program that generates a 5% improvement”.
How Abzooba can help
Abzooba’s Markdown Optimization solution empowers retailers to plan, optimize and execute more localized and profitable markdown decisions for short and long lifecycle merchandize. Our layered approach to data science solution starts with processing raw data using data cleaning, missing values and outlier treatment and standardization methods. This is followed by two core ML steps i.e. PED, Optimization. The algorithm then generates the optimal markdown sequence to optimize any particular objective.
Price Elasticity & Markdown Optimization
For one of the world’s leading beauty products manufacturer