Caterina Ticchio is Head of Merchandising & Planning at C.P. Company, with senior leadership experience across Diesel, C&A, Guess, Ralph Lauren, and Levi's. We spoke with Caterina about the realities of markdown management in premium fashion and what separates successful approaches from failed ones.

How the markdown process actually works across stakeholders

Markmi: Can you walk us through the typical markdown process and how different stakeholders are involved?

Caterina: The timing of markdowns is consistent across the industry. End of April for spring/summer, and October for fall/winter, always before Black Friday because some European countries start sales immediately after.

The process involves multiple stakeholders. First, the merchandising team defines the exclusion list. These are carryover items, continuity pieces being repurchased for the next season, key communication items, hero items, collaborations. Everything that shouldn't be marked down. This can come from collection merchandising in premium brands, or buyers in other models. It's the product-level team.

Then planning or merchandising runs simulations and defines the strategy proposal. They align with heads of e-commerce and retail on strategy and timing. It's crucial to coordinate online and offline approaches. Digital teams get involved for online communication and execution.

Once that's done, you present to the C-level for final approval. Their role is protecting margin while balancing business priorities. They need to see quantitative financial KPIs: margin, markdown rate, leftover. They want to understand where the business will end versus budget, versus forecast.

For premium brands, there's another dimension. The C-level also ensures brand consistency. You can't just optimize for numbers. You need to protect brand identity.

Finally, back office and e-commerce teams handle upload and execution. In-store staff manages the physical relabeling. In some countries, there are legal requirements around how markdowns are displayed.

Why Excel can't keep up with how fast the market moves

Markmi: You've worked with both spreadsheet-based processes and modern tools. What's fundamentally broken about the Excel approach?

Caterina: Excel cannot deliver what's needed today. The market is completely different than even a few years ago. The dynamics have changed, and everything moves much faster.

Let me give you a concrete example. Years ago, the sale in a country more or less officially started when Inditex started their sale. Today it's not like that anymore. The competitive landscape is fragmented. Marketplaces operate differently. You need to understand what competition is doing, not to copy them, but to understand how your brand is perceived.

But the real problems with Excel are deeper. First, communication fragmentation. When your exclusion lists and markdown decisions live in spreadsheets, you create misalignment across channels. One channel changes prices, another doesn't. You have the same product at different prices in different places.

Second, fragmented market insights. To build a good strategy, you need to reflect what's happening in the market. But that information is either missing or scattered. You end up reacting last minute, in a rush.

Third, everything relies on human experience and manual simulation. You're asking "how will we end with this strategy?" but you're running manual calculations based on historical patterns. The problem? Consumer preferences change fast. What worked last year doesn't necessarily work this year.

Why premium brands can't afford blunt markdowns

Markmi: You mentioned brand protection. Why is this especially critical for premium brands?

Caterina: When you're managing a premium brand, precision is fundamental. You can't use the mass-market approach of marking down everything at the same rate. Moreover, you need to match what you sell into wholesale with what actually sells through to consumers. If that balance is off, your partners end up sitting on stock they need to discount to clear. And those discounts happen in their stores, not yours, where you can't control them.

If you make mistakes, you don't just lose margin. You lose brand identity. And in premium, once you lose brand identity, it's very hard to recover.

This extends beyond your own channels. At C.P. Company, we work with major wholesale partners and key retail accounts such as Sports Direct, Galeries Lafayette, and Printemps, just to name a few. If markdowns are not managed correctly, why would those partners continue investing in the brand if we are the first to go 50% off?

We also use markdown discipline as a way to align with partners. When a marketplace goes deeper on discounts than we believe is optimal, we do not simply follow. We use data to help demonstrate the margin implications and support more balanced decision-making.

It's not easy. You need trust, you need proof. But you won't achieve that with Excel. You need certified data and tools capable of generating credible analysis.

The mistakes that keep repeating

Markmi: Can you share specific examples of markdown mistakes you've seen?

Caterina: The biggest one is marking down more than you needed to. Because everything is manual, you can't model the outcome precisely. So you default to the conservative move: go deeper than necessary, just to make sure the stock moves

Another common mistake: lack of coordination between product teams and retail teams. The merchandising team may be discounting a product while the design team is creating a sales campaign around a very similar product. That creates inconsistency in the customer message and weakens the overall brand strategy. I’ve seen this happen repeatedly.

Then there's cannibalization visibility. When you discount an item in Excel, you can't see the impact on full-price items around it. In a collection, there are relationships between items. Families, categories, complementary products. If you discount the blue version, what happens to black? What happens to the premium alternative? Excel can't model those dynamics.

The opposite problem hits when you introduce new items or categories. No historical data means you're just doing your best, relying on gut feeling. You need predictive analytics for new product launches, but spreadsheets can't provide that.

Where the real cost sits: time you should be spending on the future

Markmi: Beyond the financial mistakes, what's the organizational cost?

Caterina: Think about what markdown work actually is. You're investing energy in the mistakes of last year's buying decisions. In normal life, you never do this. You don't invest personal energy in something that didn't work. You invest in things that elevate you.

But in business with spreadsheets, we spend enormous time on last year's leftover instead of strategizing for next year's collection.

So you replicate the mistake. You're too distracted by cleaning up the past to think clearly about the future. Next year, you'll spend energy on this year's mistakes again.

It’s crazy when you think about it with common sense. Markdown planning happens at exactly the same time you should be strategizing for future collections.

During my experience at Guess, I was managing large teams across different functions, countries, and channels: outlet, retail, e-commerce, and wholesale franchisees. A very broad operational scope. Sometimes I would intentionally take time just to think and strategize for the future. Because otherwise, when a CEO asks "where are we heading?" I can't say "last year was very good." Leadership needs a clear vision of where the business is going next.

Time. Energy. Focus. That's the real cost.

What actually matters when evaluating markdown tools

Markmi: When evaluating markdown optimization tools, what capabilities matter most?

Caterina: I've evaluated these tools multiple times across different companies, so I have a clear checklist. Predictive accuracy. Scenario capabilities. Omnichannel synchronization. Brand protection logic. System integration. Intuitive user experience, especially for digital-native teams who expect agile and intuitive interfaces.

But let me highlight three that are most critical.

First, native integration. Does the tool connect directly with POS and e-commerce platforms? This is crucial because manual upload takes enormous time. If you change something, you're waiting overnight for systems to sync. That delay kills agility.

Second, advisor mode versus automated markdowns. The tool should support decision-making, not replace it. Generate recommendations, explain the logic, show alternative scenarios. Give teams options to review, challenge, and adjust before execution. Human judgment still matters in premium brands. Validate accuracy over time.

Third, transparent logic. How much can I understand about why the tool recommends what it recommends?

Markmi: That third point on transparent logic seems to come up a lot. Tell us more about that.

Caterina: People naturally hesitate when they do not fully understand the logic behind a system. When you present a new markdown tool, the biggest concern is "I don't master the logic." They're used to Excel where they control every formula, every assumption.

At Levi’s, we built an internal tool together with our engineering teams. In the early stages, the business teams did not yet have full visibility into how recommendations were generated, so the organization naturally needed time to build confidence in the model. The first season, we ran both systems in parallel to validate accuracy and progressively build trust in the model.

The compromise that worked: flexibility. The tool gave proposals, but we could modify them. We could upload our own lists for specific items. That reduced fear. Top management stayed confident because they could see our judgment layer on top of the system recommendations.

But transparency is what builds long-term trust. If I can't explain to my CEO why we're doing what we're doing, I have a problem.

Markmi: Based on all of this, what should retailers specifically ask vendors?

Caterina: Ask how they adapt to premium brands. And specifically, how they avoid overfitting historicals. Relying too heavily on historical data is risky because past performance reflects a context that no longer exists. If the model has been overfitted, it will replicate old behaviours even when those behaviours no longer reflect your customer, your pricing logic, or your competitive reality.

This becomes critical when key dynamics shift. If customers start buying differently, as we saw with our shift towards more premium products, historical patterns of demand and elasticity lose predictive power.

If your assortment moves into new price corridors, the old elasticity curves no longer apply. When you launch new product families, the past contains no comparable reference point at all. And if competitors have repositioned or changed their promotional strategies, historical sell-through no longer represents the competitive tension of the current season.

Beyond that, ask - as we talked about - how transparent the logic is. Can you set rules to protect hero items, collaboration pieces, communication products? What integrations are native, do they already have ready-made connectors for your ERP, POS, and e-commerce platform, or is that custom work for every client?

And most importantly: does the tool operate in advisor mode? I want the tool to generate recommendations, explain the logic, show alternative scenarios, and let teams review, challenge, and adjust before execution. Not apply changes directly to POS or e-commerce. That phased approach builds trust, ensures adoption, and lets the business validate accuracy before moving toward automation.

Where the merchandising role is heading

Markmi: How do you see your role changing as these tools mature?

Caterina: More time to strategize. Less time fighting fires from last season.

As we discussed, the timing of markdown planning overlaps with when you should be working on future collections. If you're distracted by manual markdown work, you're not identifying next year's opportunities. You're not developing the strategy that will drive the business forward.

Once you have the right KPIs and protection rules set up, markdown optimization should run itself with guidance. You protect margin, protect brand, protect positioning. Then you can focus on what actually creates value: understanding where the business is going, what customers will want, how to position next year's collection.

That's where leadership adds value. Not in grinding through spreadsheets, helping to mark items down one by one.

Markmi - May 2026