JDA Markdown Optimization

Key Capabilities of JDA® Markdown Optimization, powered by Manugistics®:

• Complete markdown event profile
• Time-phased price adjustments
• Multi-dimensional planning framework
• Forecasted spend, revenue and gross margin

One of the most important questions for many retailers is: "How do I know when and how to begin marking down this product?" Determining when the markdown should start, what price to start with, and when to adjust it are all challenging queries that need to be answered when items are at the end of season or end of life.

For retailers with fashion-oriented goods with short life cycles, markdowns are a critical component of an item life cycle strategy. The markdown process can be extremely costly to your business if not managed correctly. Retailers need a solution that can determine the optimal markdown strategy to ensure margin goals are met. Within a markdown event, the JDA Markdown Optimization solution recommends a set of optimal prices that will liquidate a specified inventory quantity at the maximum revenue and margin over a set amount of time.

For retailers to recognize the highest margin possible, prices must be adjusted. JDA Markdown Optimization determines when to adjust the price and to what level as part of a complete end-of-life seasonal pricing strategy. The solution uses a set of business rules that control minimum/maximum price reductions, the number of reductions, and the price formats. To ensure that maximum margin is squeezed from your products, the solution supports regular re-optimizations of the markdown price profile during the markdown period.

JDA Markdown Optimization leverages a multi-dimensional planning framework that can plan markdowns across multiple important dimensions including product, location, channel and vendor. By leveraging our framework, you can move away from employing "blanket" markdown strategies, which might be good for some stores in various locations, but not good for others. JDA Markdown Optimization determines the optimal strategy for each product and store, along with the other dimensions you choose.