The increasing importance of markdowns in the eyes of retailers mirrors that of pricing and it’s apparent that substantial profits can only be achieved through science rather than assumption. Coupled with this, the multiple complications involved within the markdown process has shifted it to prime position in the emerging “science” of optimization. So where is the market heading next?
George Coleman, Lead for Accenture's Retail Price and Profit Optimization practice believes that many of the factors that play into the models of markdown management such as inventory position, sell through rates, item and category price sensitivities make it very difficult to manage the markdown process; “It is extremely difficult for merchants to make accurate, fact-based -- and most of all profitable -- decisions when there are so many of these moving parts on so many seasonal and short lifecycle items.”
Coleman continues, “There are two areas where I see the market going. The first is in tightly linking the entire pricing lifecycle. The second area is in better linkages to consumers and consumer price sensitivities.”
Mike Gold, Senior Retail Industry Strategist within the Retail & Consumer Markets vertical for Acxiom and speaker at the Retail Clearance and Markdowns Conference agrees with George on the consumer element; “The retail market has clearly become a consumer's market. Even more compelling is that there is no ‘average' consumer anymore... What has emerged as the next great plateau of opportunity is ‘localization', the ability to achieve greater intimacy with your customer and insight into their attitudes and behaviors, not just demographics.”
Gold concludes, “Ultimately it will be the blend of merchandising art and science that will emerge as the TRUE optimal [markdown] solution.
Coleman and Gold are just two of the retail clearance and markdown experts confirmed to speak at the first ever Retail Clearance and Markdowns Conference, in Chicago, June 20-21. The meeting is a purely retail focused event addressing the biggest clearance and markdowns challenges that retailers are facing.
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