How Retailers can Implement Markdown Strategies with Planograms?

Retailers are in the business of making a profit, which means it includes a plan to calculate budget, price, and execution. And sometimes, that plan involves – markdowns, which help retailers in liquidating inventory. In the United States alone, markdown costs retailers 12% of their total sales. That is why it is important to take a step ahead in planning an effective marketing strategy to move the inventory out of the store while staying profitable. 

Today, shoppers are likely to purchase during the markdowns that include discounts, price reductions and clearance sales when they feel like they are getting a good deal. For example, if you set the retail price for shoes at $100, and eventually the sales of the shoes are slow after a few months, you decide to markdown the price to $90. After the markdown, your store’s margin drops high, but instead of losing all the profits, you will be able to sell the shoes at high prices. Markdowns can be strategically used to reduce outdated inventories with the help of planogram software. Planograms are visual merchandising software, that helps retailers to reduce overstock products before they reach dead stock by efficiently planning what items should be placed on shelves. So, the following are four planogram triggers for markdown processes in retail: 

1. Use historical sales data to make shelf space for assortment change: Your planogram software can be your best friend, as it provides you with the data on what items your customers have bought for the last season, and what items you have left. Such small details will help you markdown items on a good baseline like for 60 days – 30%, 75 days – 50%, 90 days – 70%. This will clear out old merchandise and entice more shoppers to visit the store. 
2. Localize markdown strategies by store attributes: Markdowns can be selected specifically for store-wise clustering of attributes. Attributes like demographics, store formats, and other factors are used to localize markdowns. If you have both online and brick-and-mortar stores, you can markdown the store which has low sales and optimize such markdown strategies to preserve the profit margins.  
3. Sell seasonal items before the end of the season: If you still have seasonal items in the store at the end of the season, you cannot make available shelf space for other items, respectively. That is where the markdown strategies can be useful. Implementing such strategies with the planogram could reduce the chances of positioning items for another full year until the next season comes again. With planograms, retailers can reduce the price of winter jackets after the season ends when the items are still on store shelves. 

Overview of Nexgen POG 

Nexgen POG is a robust and user-friendly cloud-based visual merchandising tool. It is designed for quick and efficient planogramming with minimal effort. Planograms can be designed by easily dragging and dropping the products. The multi-device compatibility feature of POG allows you to obtain, share and edit planograms on any device, including your phone. It helps in designing store-specific planograms for increased product visibility and sales. 

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