Background: Global apparel retail leader with shifting demand
This multinational apparel retailer operates over 2,300 stores and manages more than 85 brands across multiple platforms. Specializing in fashion, footwear and lifestyle, the company must constantly adapt to satisfy shifting consumer demand and stay ahead in the competitive retail industry.
Number of brands 85
Number of countries 14
Challenge: Optimizing markdowns across markets
In retail, the right markdown strategy can boost sales, customer satisfaction and profit margins. However, managing markdowns across multiple brands, channels and SKUs presents significant challenges. Over-discounting or under-discounting can lead to inventory imbalances, damage brand perception and reduce retail margin growth.
As a multi-brand, multi-market retailer, this company aimed to optimize pricing and inventory management to reduce markdown loss, improve sell-through rates and accelerate revenue growth. The retailer recognized that an AI-driven, data-powered approach could help its pricing teams determine the optimal timing, depth and frequency of markdowns throughout the season.
Additionally, the retailer needed a way to redistribute excess inventory efficiently across locations to minimize lost sales and markdown losses. It sought an intelligent markdown optimization solution that would seamlessly integrate with its existing inventory management system.
Solution: Integrated markdown and transfer optimization
Following an in-depth assessment of solution providers, the retailer selected invent.ai for its expertise in fashion retail and its AI-powered inventory and price optimization solutions. The retailer quickly implemented invent.ai’s markdown and transfer solutions across its global brand portfolio.
Invent.ai’s markdown optimization solution enhances markdown management through AI-driven demand forecasts, real-time pricing simulations and market-specific markdown strategies. It analyzes price elasticity, seasonality, special shopping days, inventory levels and consumer demand trends to determine what products should be marked down, at what percentage and when to apply the discount.
The solution enables real-time “what-if” scenario simulations, allowing the retailer to compare future outcomes of different markdown strategies and select the most effective approach. These capabilities help the retailer strategically apply markdowns, minimize revenue loss, improve sell-through rates and ensure products sell at the right price to maximize margin growth.
Alongside markdown optimization, invent.ai’s intelligent inventory transfer solution further reduces markdown losses by reallocating excess inventory across the retailer’s network. The solution moves unsold stock from underperforming stores to locations where it can sell at full price. This dynamic inventory redistribution strategy enhances inventory availability, increases sales and maximizes revenue growth.
The smooth integration of invent.ai’s solutions into the retailer’s existing inventory management system was key to success.
Results: Strategic markdowns, precise inventory positioning
Today, the retailer relies on invent.ai’s markdown and transfer solutions to:
- Utilize markdown-specific demand forecasting throughout the season
- Accurately predict seasonal demand for new products with limited sales history
- Analyze product attributes and adjust markdown strategies at the market-option level
- Maximize revenue growth by optimizing pricing across each product’s lifecycle
- Redistribute inventory across locations to minimize lost sales and markdown losses
With invent.ai, the retailer now confidently answers the critical retail optimization question: what, where, when and how much should we markdown? Through the power of AI-driven retail intelligence, the retailer implements strategic pricing solutions to optimize markdowns, reduce revenue loss and unlock the full potential of its inventory.
The retailer also maximizes profit margins by effectively managing excess inventory. Using invent.ai to transfer products from underperforming stores to locations with higher consumer demand, the retailer reduces lost sales and ensures that inventory is always positioned where it’s needed most. By strategically managing markdowns and transfers, the company boosts full-price sales and reinforces its ability to meet market demand while driving revenue growth.
For the retailer’s pricing and inventory teams, invent.ai’s intelligent solutions have automated time-consuming manual processes, enhancing operational efficiency. The company now responds faster to shifting market conditions, maintaining its competitive edge in the apparel industry.
Following the success of its markdown and inventory optimization project, the retailer expanded its collaboration with invent.ai. The company implemented AI-driven pricing and inventory planning solutions across additional brands and regions, further strengthening its ability to optimize reorder points, adapt to market conditions and manage lead time constraints.