Markdown & Clearance Optimization
What you'll learn
- 1Use AI to determine optimal markdown timing, depth, and cadence
- 2Create sell-through models that balance inventory clearance with margin protection
- 3Build end-of-season exit strategies using AI-generated markdown schedules
The Markdown Trap
Retailers face a painful paradox: mark down too early and you sacrifice margin on items that might have sold at full price. Wait too long and you need deeper discounts to clear the same inventory. Most retailers wait too long — the psychological pain of taking a markdown is greater than the mathematical reality that earlier, shallower markdowns almost always recover more total margin.
AI-Driven Markdown Timing
Use AI to determine when to initiate markdowns:
"You are a markdown optimization expert. This product has these characteristics: current on-hand [X] units, weekly sales velocity at full price [Y] units, weeks remaining in the selling season [Z], current margin [W]%. Calculate: the probability of selling through at full price, the recommended markdown initiation point, and the total margin impact of marking down now versus waiting 2, 4, and 6 more weeks. Show me the math so I understand the trade-off."
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What you'll learn:
- Use AI to determine optimal markdown timing, depth, and cadence
- Create sell-through models that balance inventory clearance with margin protection
- Build end-of-season exit strategies using AI-generated markdown schedules