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The Markdown Optimization Challenges Retailers Must Solve
GENERIC MARKDOWN STRATEGIES
Overreliance on gut feel or blanket discounting erodes margins and brand value.
LACK OF REAL-TIME INSIGHTS
Without accurate data, retailers struggle to optimize timing, depth, and location for markdowns.
MARGIN AND TURNOVER PRESSURE
Balancing inventory turnover with profitability is a constant challenge for short-lifecycle products.
Digital Wave’s AI-Native Markdown Optimization
Smarter Markdown Decisions with AI
Unlike manual or reactive markdown processes, Digital Wave Technology’s Markdown Optimization is AI-native and embedded within the ONE Platform. It anticipates demand, models financial outcomes, and delivers real-time recommendations with clear business rationale, so every action is explainable, trusted, and margin-protective.
Localized Markdown Precision
The solution enables retailers to tailor markdowns by store, region, or channel, avoiding blanket discounts and ensuring promotions align with actual demand. By factoring in sales velocity, inventory position, seasonality, and external demand signals, markdowns become more targeted and profitable.
Connected to the Retail Pricing Ecosystem
Markdown Optimization shares a unified data model with Price Optimization, Promotion Planning, and Lifecycle Pricing. This ensures pricing strategies are consistent from launch through clearance, giving retailers one intelligent, end-to-end pricing engine.
Why It’s Different
Native to the ONE Platform: Unlike standalone markdown tools that rely on manual rules or disconnected systems, Digital Wave Markdown Optimization is AI-native and fully embedded in the ONE Platform for real-time precision and execution.
Foundation for Smarter Lifecycle Pricing: Centralizes pricing, promotions, inventory, and allocation data to deliver governed markdowns that align with enterprise financial goals, protect margins, and accelerate sell-through.
Enterprise-Ready Advantage: Eliminates guesswork and blanket discounts with explainable AI, localized recommendations, and unified workflows—reducing total cost of ownership while ensuring consistent execution across stores, regions, and channels.
Key Features & Capabilities of AI-Native Markdown Optimization
AI-Driven Markdown Timing & Depth
Intelligent recommendations maximize sell-through while protecting margins.
Unified Lifecycle Pricing Integration
Connect markdowns seamlessly with Price Optimization and Promotion Planning for consistency.
Localized Markdown Execution
Tailor markdowns by store, region, or channel to reflect real demand instead of blanket discounts.
Decide with Inventory & Allocation Insight
Factor in live inventory and allocation rules for more accurate and balanced execution.
Scenario Simulation & What-If Analysis
Model financial outcomes in advance to prevent unnecessary margin loss.
Governed Business Rule Controls
Configure rules by category, margin targets, or financial plan to ensure governance and compliance.
Dynamic Auto-Adjustments
Update markdowns in real time as sales velocity, weather, or demand conditions change.
Explainable AI Recommendations
Each markdown decision includes transparent rationale to build trust and accelerate adoption.
What Retailers Can Expect from Markdown Optimization
Accelerate sell-through. Move seasonal and slow-moving products faster with demand-driven markdowns.
Reduce waste & over-discounting. Scenario modeling and AI prevent excessive price cuts and margin erosion.
Protect margins while clearing inventory. Smarter markdowns reduce unnecessary discounting and preserve profitability.
Enable unified pricing strategy. Connected workflows align markdowns with pricing, promotions, and financial planning.
Increase local relevance. Store- and channel-specific markdowns match customer demand patterns.
Enhance customer trust. Consistent, data-backed markdowns improve pricing fairness and shopper confidence.
Works with Your Existing Ecosystem
Digital Wave’s Markdown Optimization solution integrates with POS, ecommerce, planning, and fulfillment systems.
As part of the ONE Platform, it shares real-time data and workflows with Allocation, Replenishment, Assortment, and Pricing solutions to ensure full cross-functional alignment.
Why Digital Wave Technology
GROWTH ENGINE
Transforming mission-critical processes to drive revenue, margin, cost savings, and efficiency.
AI-NATIVE PLATFORM
Purpose-built to unify retail strategy and execution in one intelligent ecosystem.
CLEARANCE WITH CONFIDENCE
Move inventory profitably with AI-optimized markdowns tailored by channel and store.
SCALABLE EXECUTION
Built to deliver measurable results at enterprise scale, across every channel.
EXPERTLY DESIGNED
Developed by retail experts who understand how to turn data into real-world action.
Watch Markdown Optimization in Action
See how Markdown Optimization turns end-of-season clearance into a margin win.
Explore the Power of AI-Native Markdown Optimization
Frequently Asked Questions about Retail Markdown Optimization
What is Markdown Optimization in retail?
Markdown Optimization uses AI and real-time data to determine the optimal timing, depth, and location for markdowns maximizing sell-through while preserving margin.
How does AI optimize markdown timing and depth?
AI analyzes sales velocity, inventory trends, seasonality, and demand signals at the product-location level to recommend precise markdown timing and depth.
Can markdowns be tailored by store or region?
Absolutely. The platform delivers granular markdown recommendations by store cluster, region, or channel to match localized demand and inventory dynamics.
How does this solution integrate with promotion and pricing plans within the ONE Platform?
Markdown Optimization shares data and workflows with Pricing, Promotion Planning, Allocation, and Replenishment, ensuring end-to-end strategy alignment and execution.
Can I simulate markdown scenarios before execution?
Yes, the solution includes scenario planning and what-if analysis so you can model markdown impact across financial and operational outcomes.
Is the markdown logic transparent and configurable?
Definitely. It features explainable AI logic, configurable business rules, fit-to-budget modeling, and proactive alerts to support governed decision-making.
The Bottom Line: Leaner Markdowns, Healthier Margins
Digital Wave’s Markdown Optimization solution helps retailers increase margin and reduce inventory risk through intelligent, real-time markdown pricing. As part of the ONE Platform, it connects forecasting, fulfillment, allocation, and GenAI-enhanced product data into a single source of truth. Automate pricing, simulate strategies, and clear inventory profitably at scale.