SAS^® Markdown Optimization

Tight profit margins and intense competitive pressures require that retailers maximize the returns from their end-of-season and end-of-life merchandise. But markdowns are often taken at the wrong time, on the wrong items and at the wrong locations. Moreover, such markdowns tend to be priced either too low, resulting in lower margin; or too high, resulting in lost revenues and leftover inventory.

To optimize markdowns, retailers need a reliable way to predict the impact of markdowns before they are executed, determine the best time for markdowns, and monitor the performance of past and ongoing markdown activities against financial and operational goals.

Optimize markdown activities
SAS Markdown Optimization provides retailers the ability to determine which items should be marked down, by how much they should be marked down, when, and in which markets or stores. Retailers can base this analysis on critical factors such as inventory levels, base sales volume, price elasticity and local demand or preferences. With this solution you can develop and implement optimum pricing strategies at the local market level to maximize revenues and profitability while meeting end-of-season inventory goals.

• Improve markdown profitability. Using powerful demand forecasting and optimization, you can answer all your questions about markdown planning, including item, price, location and time. The solution also analyzes past markdown events and monitors events in progress.

• Free merchants for more valuable tasks. Because SAS makes markdown decisions easier to analyze and implement, merchants can focus on clearance exceptions and other critical tasks at the beginning of the merchandising life cycle.

• Implement comprehensive pricing strategies. For fashion and seasonal goods retailers, this solution provides markdown recommendations across the entire life cycle to help maximize the revenues and margins generated once merchandise is placed in the store.

Forecasting, monitoring and analysis
Specifically, SAS Markdown Optimization allows retailers to:

• Predict the demand generated from any user-defined markdown, as well as the resulting inventory, revenue and margin returns.
• Deliver alerts when progress deviates from goals. The solution will recommend corrective actions to get you back on track.
• Analyze performance of past markdowns against set targets.
• Create optimized markdown scenarios (price schedules) based on user-defined business rules and constraints.

Manage the entire merchandise life cycle
SAS Markdown Optimization is a component of the SAS Revenue Optimization Suite, the only software suite available today that helps retailers manage revenue and margin through the entire merchandise life cycle. This suite integrates advanced data management, forecasting and analytic capabilities to help retailers set and manage regular prices, plan optimal promotions and execute the most successful markdown strategies.