When seasonal or fashion merchandise does not meet sell-through or turn objectives, the most common method to stimulate sales is through markdowns. The issue for any markdown decision becomes how much, when, and at what cost to the bottom line. Retail-1 Red Line provides the business intelligence to identify opportunities to stimulate sales and achieve optimized performance. Retail-1 Red Line helps our retailers to identify and prioritize markdowns with GMROI simulations and help them quantify "best case WHAT-IF scenarios" by taking advantage of their existing sell-through information and peak sales cycle.
Retail-1Red Line meets three (3) main goals. First is to provide buyers with a comprehensive online list of suggested styles targeted for markdown according to set business rules such as inventory turn. Second is to integrate the markdown list that has been approved into Retail-1 and have the price changes reflected at store level. Third is to provide complete analysis reporting on the performance and impacts of the applied markdowns. Key performance indicators include gross margin dollars, gross margin percent, inventory turns and a simplified gross margin return on investment (GMROI) value.
Typically the suggested markdown list is produced at the very beginning of each week and prices at store level are affected as quickly as possible in order to maximize sales potential. The system provides the capability of managing up to 4 markdowns, the last being liquidation price.
Retail-1 Red Line provides the flexibility to support a variety of business models. Some retailers assign styles to buyers who are responsible for the performance of the styles throughout the retail chain. Other companies do not have styles assigned to buyers. The list of suggested markdowns must be user driven from a given starting point and must accommodate the above scenarios.
The markdown suggested list contains all items according to the following business rules:
- All items with less than X inventory turns and have been on store shelves for more than X weeks or where the last markdown is more than X weeks.
- Include or exclude items which have been transferred during this period. If included, indicate the date of last transfer.
- Rank the items by worst sales performance.
