Before, there were 2 sales periods in the year.
But that was before.
(and it was already a hassle for purchasing and procurement managers).
Today, your commercial operations calendar is a marathon. Because online or offline, flows are the lifeblood...
Private sales, sales, special days, boosters and in general, regular commercial transactions: sell off your stock is a mission to be carried out throughout the year, with the main challenge being the preservation of your margins.
What strategy should be put in place to find this The right balance between flow, acceleration of markdowns and achievement of margin objectives ?
Together, we will see how to create different discount scenarios and increase the ROI of your commercial operations.
Quick quiz before you start
- Are you able to Define the various markdown strategies in advance (sales, turnover and/or margin strategy) that optimize your targeted margin target at the outset?
- Are you able to quantifying the impact of a change in strategy on margins ?
- Are you sure that the discounts you set today optimize your margins?
- Are you able to know Upstream the acceleration rates by markdown and product (identify for example beforehand that in DM1 such product will have a 20% discount, then 30% in DM2 and then 50%, where the same product of another color will have a 20% discount in DM1, will remain at this rate in DM1, will remain at this rate in DM2 and will switch to DM3 at 50%)?
- Do you know today the rates offlow per size per product (for example, if black velvet pants size S flow better than the same pants in size M)?
... if these questions speak to you, this article is for you.
We continue 👇
Why do you have to get out of Excel
Excel is a fantastic tool, there's no denying it.
But when it comes to managing balances and commercial transactions, using them is painful AND counterproductive (in terms of time and money).
Does that mean anything to you?
At each commercial highlight of the year, it's the same thing: you end up with very large files, complicated to update, on Background of complicated formulas that no one really dares to question, and that involve Line-by-line analysis (😱).
Beyond the headaches caused and the cumbersome Excel files that row away for the slightest modification or any back and forth between teams, using this tool causes mistakes that cost a lot and prevents creating real scenarios beforehand.
The result?
Renewed products that should not have been sold (hello the chasm on the margin!) , slow processes, the impossibility of identifying whether the discounts applied to each product really optimize sales without threatening margin objectives...
And when it comes to strategy, well...
Um (***awkward silence***)
There is no strategy that is really foreseeable and quantifiable in this way.
For example, you cannot easily define different strategies for commercial operations in advance, by product categories to name but a few.
Illustration of what Excel does not allow you to easily calculate:
Strategy 1: I optimize my turnover in the ROBE category while respecting the margin objective
Strategy 2: I optimize my margin in the ACCESSORIES category while respecting the margin objective
Strategy 3: I optimize my sales in the LINGERIE category while respecting the margin objective
Another example: can you use your current method to calculate the real impact of a change in rates on a margin/ flow/ turnover strategy?
The alternative: Revenue Studio (+15% additional margin)
To overcome all these problems, we have developed Revenue Studio, a software that allows you to implement markdown strategies that optimize your margin goals while maximizing sales.
How?
Thanks to an algorithmic model that adjusts to your product specificities and determines the acceleration rates and the optimal discounts per product and or product category.
Unlike other tools that use Artificial Intelligence modules to predetermine rates, Revenue Studio makes it possible to really take business expertise into account and not to depend on the very vague history of episodes such as the health crisis.
Today, our customers generate 15% additional margin thanks to our solution.
For example, Revenue Studio allows you to split by product, by country, but also by size for maximum optimization of discount rates and markdown trains.
Do you want to test a scenario?
The tool allows you (among other things) to project the impact of a modification (e.g. X% in S2 vs X% in S3 on such a product) on your global strategy beforehand.
