Markdown Optimization: Transforming Markdown to Maximise Revenue

One of the most challenging tasks retailers face today is how to maximize gross margins while clearing goods and seasonal merchandise by a defined date. Understanding which items require a price change and how deep to price is a critical component in balancing demand with inventory throughout the life of a product.

Retailers too often take markdowns for the wrong products, at the wrong time, at the wrong price. Such markdowns tend to be priced either too low, which results in lower margins, or too high, which results in leftover stock or waste.

Three primary triggers for markdown processes in retail that include:

  • Clear stock to make room for a planned assortment change
  • Move seasonal items before season’s end
  • Sell products before their expiration dates

Billigence’s experienced team have solved this for multiple retailers

The Billigence team have unlocked the opportunities to what was once a painful-to-execute loss making centre for retailers into an automated and proactive opportunity to recoup otherwise lost sales and revenue. By removing predictable pain points (spreadsheets, manual planning) resulting from poor markdown processes and implementing data science solutions.

Our markdown optimization solutions provides a full understanding of markdown needs by providing data driven decision to retailers and then automating key points using machine learning and data science that will:

  • Maximize sales and margin through improved timing and more effective discounting
  • Reducing spoilage by accelerating inventory turnover while products are still sellable
  • Clearing stock for season and lifecycle ends to ensure space for new assortment


Our teams experience of building markdown optimization solutions provide a whole host of automation, allowing your teams to focus on performance insights that will help improve outcomes in the future.

Early Visibility & Insight. Monitor seasonal forecasts and receive real time updates to ensure early action.

Accurately Identifying Items.  Quickly and accurately identify items for markdown and location level.

Scenario Building. Optimization that evaluates every possible pricing scenario to provide the most optimal markdown recommendations.

Real-time Recommendations. Facilitate decision-making based on most recent data – new sales, inventory, price levels, planned promotions and other key information.

Automated to Budget. Optimize markdowns while remaining within the constraints of your monthly budget.

Standardized Markdown Process. Maximize gross margin and meet defined sell-through targets, while conforming to your business constraints.

Centralized Information. Allows you to quickly focus on goods and merchandise that needs special attention.

Benefits Markdown Optimization Drives Measurable Results

  • Timely, using integrated, real-time access to forecast and inventory balance data to create inventory projections
  • Optimized through price elasticity calculations
  • End-to-end, so that data processing, recommendations, and planner actions take place within the same system
  • Automated, yet flexible enough to accommodate different pricing tactics

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