Some retailers view markdowns as a necessary evil to sell through inventory. When based upon estimates and calculations, experience and best guesses that’s exactly what they are. But retailers that use science, insights and analytics turn necessity into opportunity.
Coop Danmark is one of Denmark’s largest retailers. Generating annual revenue equivalent to approximately USD11 billion, the company operates a comprehensive range of store formats across the country.
Coop Danmark replaced its complex markdown spreadsheets with Markdown Optimization solutions from IBM. Today, the company has deep insight into the optimal percentage and duration for markdowns, based on customer demand forecasts and inventory data at each retail store. This helps the company to boost sales while protecting margins.
“We can now understand which products should be reduced at each of our stores, and for how long – helping us to execute a more profitable pricing strategy nationwide,” said Kent Bredahl, former Customer Insights Manager at Coop Danmark.”
“With a week-by-week view of the sales performance of markdowns at each store, we can ensure that we start each non-food discount at the right time and optimal amount,” said Bredahl. “We predict that by driving additional sales in this way, we will boost our return on markdown investment by up to 10 percent.”
Watch how Coop Danmark is using IBM Markdown Optimization to help them make better, fact based store-level decisions to drive profit increases across their non-foods business:
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