Case study
New markdown solution enables a national retailer to substantially reduce waste
Client
Leading multinational retailer
Competitors
Amazon, Costco, Kroger
A leading retailer needed a consistent, accurate method of marking down end of life grocery items. So, they partnered with Retail Insight to create a new approach - one that leverages their data to deliver the most effective markdown prices.
Find out how they saved millions in base waste costs with an analytical and dynamic markdown solution.
Retail Insight Solutions
Takeaways
£40m
savings
A leading national retailer needed to update their decade old process for marking down end of life grocery items, as waste was no longer being accurately monitored and costs were rising significantly.
The same discount was applied to all items, regardless of time, day, category or stock level. There was no consistent process across the store estate, with many store managers having developed their own approaches, independent of head office guidance and inefficiently utilising store labour.
As a trusted partner, RI developed a new markdown solution leveraging historically available markdown data, which wasn’t being used due to its unstructured nature. Item level price and sales data was modelled to isolate the impacts of each historic markdown and the specific circumstances, to build an accurate picture of what had previously worked and why.
The analytical solution was supported with simple store guidelines, delivering markdowns to handheld devices as part of the existing process, considering time of day in discount value. Once foundational consistency had been achieved through compliance reporting, the RI product was evolved to utilise increasing data richness and store capability to become truly dynamic.
The closed data loop of item level reporting delivers insight to head office to
inform ranging and forecasting decisions to avoid store issues, while the living
database continually enhances the recommendation engine.
Each year, base waste costs have reduced substantially, yet we are still continuing
to deliver incremental year on year benefits, cumulatively in excess of £40m of
retail cost substantially reducing the environmental impact. This is being efficiently achieved, even with a reduction in labour through improving processes in store.
£40m
saved in direct costs
The retailer has saved over £40m by partnering with Retail Insight
Together, RI and the retailer built a new markdown solution that leverages historical markdown data
The solution has reduced base waste costs substantially each year
Item-level reporting delivers actionable insight to head office
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