At Markmi, we sat down with European fashion retail leaders to understand the emerging category of markdown management. Enabled by AI and advanced analytics, specialized tools are replacing spreadsheets and protecting millions in margin.
This guide captures what retail executives learned making this shift
Fashion retailers are bleeding value at the markdown stage. Markdowns consume 20-50% of net sales, yet most retailers manage them with outdated tools. McKinsey estimates disciplined markdown optimization can improve margin rates by 400-800 basis points. For a €500M retailer, this represents €3M-€7M in annual EBITDA alongside 80-95% time savings.
The baseline collapsed. Full-price sell-through dropped from 70-75% to 50% at many retailers, fundamentally altering the economics of every collection. More inventory now moves at discount. Supply chain lead times doubled to 67 days. Retailers now often pay suppliers before merchandise reaches stores, breaking cash conversion cycles at the worst possible moment. From July 2026, EU has stricter rules on unsold textiles, eliminating traditional clearance options.
But here's what most retailers don't realize: pricing strategy and markdowns remain the lever they still fully control. Discovery happens on platforms retailers don't own. Supply chains face structural challenges. But markdown timing and discount depth? Fully controllable.
The gap between leaders and laggards isn't technology adoption. It's mindset. Teams spend weeks "investing energy in last year's buying mistakes" instead of next season's strategy. Markdown decisions involve dozens of simultaneous interactions across categories and channels that human judgment alone can't optimize.
This guide explains why markdown management has become critical, how modern approaches differ, and what implementation requires.
Executive Summary
The financial stakes, why this matters now, and the three actions C-suite teams should take. Start here if you're building the internal case or need to forward something to leadership.
Part I: Why Markdown Management Matters Now
The structural changes forcing retailers to rethink pricing discipline. Full-price sell-through collapse, supply chain disruptions, new EU regulations, and why the old playbook no longer works. Essential context for CEOs and anyone making the strategic case.
Part II: How Fashion Retailers Have Been Managing Markdowns
The traditional playbook and why it's breaking down. Merchandising and commercial leaders will recognize this immediately. It articulates the daily reality of managing markdowns with spreadsheets and describes exactly where the cracks appear.
Part III: The Modern Approach
How modern markdown management works in practice, from setup through execution. Features interviews with retail executives from C&A, Zizzi, Torfs, E5 Fashion, and others. Commercial teams should read this alongside Part II to see how the workflow transforms.
Part IV: How to Evaluate Solutions
Business case frameworks with worked examples, ROI calculations for different retailer sizes, capability checklists, and vendor evaluation criteria. CFOs can jump directly here after the Executive Summary. Technology and transformation leaders will find the build-versus-buy guidance and specialized-tools-versus-monolithic-platforms discussion particularly relevant.
Part V: Looking Forward
Perspective on where the markdown management category is heading and why specialized tools are replacing monolithic systems.
This guide combines published research from Bain, McKinsey, BCG, and Business of Fashion with insights from European retail executives:
PHILIP MOUNTFORD: Takko Fashion, Hush
CATERINA TICCHIO: C.P. Company
MARKUS KRENN: C&A
JACK STRATTEN: Insider Trends
KONRAD OLSON: Scandinavian MIND
and many others