Project Description

Improving margin by establishing better markdown management through rule-based framework, training, and reporting.

The Client

A $15B+ specialty retailer of hardlines and softlines with multiple channels, store formats and brands.

The Challenge

The retailer was transforming its $500 million softlines business.  A large component of the expected business benefit would come from shifting clearance margin to regular/promo and increasing the clearance margin rate through better markdown management.  Challenges in the current markdown process included:

  • No seasonality visibility
  • Limited markdown rules in place
  • Markdowns taken at national level
  • No integration to merchandising or marketing calendars
  • No visibility or control at item level after first markdown
  • No “what if” capability

The Parker Avery Solution

The Parker Avery Group helped the client address the challenges identified in the current state by recommending six initiatives:

  1. Establish a markdown rules framework by product type
  2. Add markdown rules to the assortment planning process
  3. Improve reporting to provide visibility to markdown performance
  4. Implement rule-based, localized markdown capabilities
  5. Establish a markdown training program for merchants and planners
  6. Implement markdown optimization

The Result

As a result of the project, the client expects to achieve the following benefits:

  • +3% shift from clearance to regular/promo margin
  • +1.3% clearance selling margin rate
  • Maximized sales
  • Improved sell-thru
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