How to Turn Markdowns into Marketing

AsktheExpertsQ: Mr. Pruitt, I have read your column in MR and have a question for you. You have discussed the idea of turning a markdown into a marketing dollar. Could you elaborate on this idea and also explain the timing of this action?

A: Sure, this is a good question, and I’m not surprised you asked because the concept is a little odd. First, a markdown is a markdown no matter when you take it. The difference is the effect. If a markdown actually creates demand (lifts the sales trend) I consider this to be a marketing effect. If the markdown just reduces prices, and sales don’t lift as a result, then this is not an effective marketing strategy.

As for the timing, the conversion from markdown to marketing dollar usually happens in the face of demand (pre-peak of season). Markdowns are not effective as marketing tools after the peak of the season.

Share / Print

  • Facebook
  • Twitter
  • Digg
  • StumbleUpon
  • Yahoo! Buzz
  • Print
avatar About Steve Pruitt

Steve Pruitt is founder and Senior Consultant of Blacks Retail Analysis and Blacks Consulting. With over 30 years of experience, Steve is one of the most respected merchandise analysts in the industry. His specialty is apparel merchandising and he has worked with clients in every sector of this category. Steve’s approach is highly customized; he tailors his analyses to the particular needs and market of each client. His work ties together the merchandising piece of the business with the client’s overall financial goals to increase sales and streamline operations. Steve is also a trusted general business consultant, known for his ability to help retailers plan growth and manage change.
Ask Steve about merchandise planning and strategy
Note: MRketplace collects promotional fees from site experts.

Speak Your Mind