11.1 The mechanics of a promotion

Ideally, all retail generally aim to have their assortments at full price at all times while maintaining high sellout rates. However, markdowns are sometimes inevitable – and merchandisers use promotions as a tool to boost sales for slower-moving items and keep inventory in check.


Consumers may think sales are sporadic offers that generate more profit, but the main objective is really to clear inventory. Which is why plenty of analysis and planning are carried out prior to promotions, so that there are no further losses.


Merchandisers are typically in charge of analysing numbers, markdowns and tactical promotions, while marketers handle marketing promotions. With that said, both parties have a common aim – to clear stock without facing heavy losses.


Often, some retailers opt to markdown at a ridiculously low price in hopes to clear as fast as possible. However, this practice not only damages your profitability but gives off a certain brand image too. On the flip side, there are others that offer a promotion that isn’t enticing enough for consumers.


In this course, we’ll take you through the steps to planning an efficient markdown strategy – one that benefits both you and your customers.