Price markdown
Encyclopedia
The velocity of an article, typically for clearance
at the end of a season, or to sell off obsolete merchandise at the end of its life.
The timing and level of markdowns in a selling season is critical to maximising return on sales. This is often measured as revenue realization: the proportion of the potential original selling price achieved. For example, a revenue realization of 50% means that only half the potential full-price sales value was achieved by the end of the season. It is also important in minimizing terminal inventory, i.e. the amount of merchandise left when the season is finished.
A recent trend has been to use Demand Optimization
software to establish the most desirable timing and level of markdown. Optimization techniques can be used to determine where the best combination of revenue realization and terminal inventory is going to come from, for example, comparing a tactic of low-level markdowns from early in the season against one of later, deeper reductions.
Markdown strategy is referred to as "Markdown Optimization".
Closeout
A closeout or clearance is the final sale of an item or items to zero inventory. It may be a given model of item that is not selling well, or in the case of the final closure of a retailer because of a relocation, a fire , or especially because of a bankruptcy. In the latter case, it is usually...
at the end of a season, or to sell off obsolete merchandise at the end of its life.
The timing and level of markdowns in a selling season is critical to maximising return on sales. This is often measured as revenue realization: the proportion of the potential original selling price achieved. For example, a revenue realization of 50% means that only half the potential full-price sales value was achieved by the end of the season. It is also important in minimizing terminal inventory, i.e. the amount of merchandise left when the season is finished.
A recent trend has been to use Demand Optimization
Demand Optimization
Demand optimization is the application of processes and tools to maximize return on sales. This usually involves the application of mathematical modeling techniques using computer software....
software to establish the most desirable timing and level of markdown. Optimization techniques can be used to determine where the best combination of revenue realization and terminal inventory is going to come from, for example, comparing a tactic of low-level markdowns from early in the season against one of later, deeper reductions.
Markdown strategy is referred to as "Markdown Optimization".