News

Markdowns costing retailers $300B in revenue

February 25, 2019

A Coresight Research and Celect study states retailers lost $300 billion in revenue in 2018 due to product markdowns.

The study, according to a press release, illustrates several other major inventory hurdles retailers are wrestling with, including poor optimization with inventory and merchandising decisions.

"Our research underlines the scale of the challenge retailers currently face — as well as the opportunity to sell more products at full price," said Deborah Weinswig, CEO and founder of Coresight Research, in the release. "Ever-expanding choice and rapid changes in consumer behavior are increasing the pressure on retailers to make smart merchandising decisions, and these pressures show no signs of easing."

The report highlights include:

• Respondents cited inventory misjudgments as a primary markdown driver and barrier to selling at full price, accounting for more than half (53 percent) of unplanned markdown costs.
• Multichannel retailers had a lower propensity to sell inventory at full price, demonstrating the overbuying/underbuying inventory tightrope getting even more complicated with channel expansion.
• The majority, 86 percent, of survey respondents identified specific ways in which advanced analytics could help their retail sector sell more product at full price.