Turning costly end-of-lifecycle markdowns into a strategic advantage
C&A is a leading European fashion retailer known for pioneering ready-to-wear clothing. It operates approximately 1,300 stores across Europe, with headquarters in Belgium and Germany.
Like many fashion retailers, C&A faces the constant challenge of balancing profitability, clearing stock, and adapting to rapidly changing market dynamics.
In today's competitive landscape, end-of-lifecycle markdowns have evolved from being viewed as just a cost to becoming a strategic lever for driving profitability. During key sales moments—such as mid-season sales, Black Friday, and end-of-season clearances—finding the right pricing balance is crucial to avoid overstock and make room for new collections.
Yet, markdowns continue to be one of the most prominent cost lines in any fashion retailer's profit and loss statement. Managing markdowns at C&A's scale—across 17 countries and thousands of products—demands precision, consistency, and speed.
To address these challenges, C&A sought to replace error-prone spreadsheets with an AI-driven solution that could provide greater control over markdowns and drive better results.
We spoke with two key leaders at C&A driving this transformation:
The complexity of markdown management: What challenges does C&A face?
Managing markdowns at C&A is an utterly complex task. Here are the key factors that make this so complex:
- High Decision Volume: Markdowns involve 5,000 items across 17 countries, creating 170,000 decision points across multiple sales phases.
- Manual Processes: The previous process relied heavily on spreadsheets, so C&A's teams faced an error-prone and time-intensive workflow.
- Balancing Objectives: The team must navigate the delicate balance between margins and stock level, achieving sell-through targets while maximizing profitability. This requires a nuanced approach that considers both short-term sales needs and long-term financial goals.
- Operational Complexity: Implementing markdowns requires reticketing, reorganizing store layouts, and aligning visual merchandising, which must be executed accurately across 1,300 stores. This means you can't change markdowns as often as you want.
The process at C&A was run with the help of several teams and team members, each with a unique role. Let's dive a bit deeper into Markus's role as VP and Stephan's role as Commercial lead to understand how Markmi has transformed their way of working.
Achieving consistency and efficiency: How Markmi helps Markus transform C&A's EU-wide markdown management
"Markdowns represent the difference between the price we want and the price we can actually achieve. Managing these costs tightly is essential for us as a fashion retailer."
For a commercial leader like Markus, managing costs more precisely has become increasingly important. Therefore, speed, alignment, and consistency across markets are crucial challenges.
Let's break that down:
- Strategic Oversight:
- Managing markdowns as a significant cost line required greater accuracy and alignment across teams.
- Managing markdowns as a significant cost line required greater accuracy and alignment across teams.
- Consistency Across Markets:
- Aligning hundreds of thousands of markdown decisions across diverse markets, each with its cultural nuances, is genuinely challenging.
- The lack of uniformity led to inefficiencies in profit and loss management.
- Speed and Execution:
- The traditional process required 3–4 days to finalize markdowns, resulting in lost opportunities.
Markus recognized that it has become increasingly difficult for merchandise planners to perform their roles effectively in today's fast-paced retail environment. They are tasked with managing extensive markdown processes across vast product catalogs and multiple countries, often with fewer resources and smaller teams.
Balancing the complexities of cultural nuances in pricing strategies with the operational realities of tight deadlines and budget constraints adds to the pressure. Repetitive tasks, such as reviewing thousands of items line by line, naturally lead to fatigue and errors, making it harder to maintain consistency and precision.
Enter Markmi.
Markmi has fundamentally transformed how Markus and his team tackle the challenges of markdown management, addressing each critical pain point with an effective solution.
By delivering forecast consistency, the tool ensures accurate and aligned projections across all markets. This eliminates discrepancies caused by cultural differences or manual errors, creating a reliable framework for more data-driven decision-making that fosters alignment and trust within the organization.
"Machines are just much more consistent in decision-making than humans. The system helps us find the sweet spot between reaching the end of life cycle with maximum margin for each of the markets."
Moreover, Markmi unlocks more strategic focus. Markmi frees up valuable "brain capacity" within the team, allowing them to focus more on strategic decision-making rather than merely checking one spreadsheet line after the other.
"I can manage my profit and loss statements much better and see that the strategy fits.”
Markmi also dramatically enhances go-to-market speed, reducing markdown decision time from three to four days down to just 30 minutes. This speed enables the team to act swiftly, seizing market opportunities and maintaining a competitive edge in the fast-paced retail environment.
Together, these benefits fundamentally changed the way Markus and his team operate. With Markmi, markdown management has shifted from a reactive, labor-intensive challenge to a proactive and more efficient process—one where they even learned to look at the challenge from a new strategic perspective.
As Markus concludes:
"Everybody is now looking at the same data, the same dashboards. It’s a completely different way of working—simpler and more aligned."
So, key benefits for Markus are:
The appropriate markdown at the appropriate time: How Markmi empowers Stephan to craft the perfect markdown strategy for his DACH region
"Markmi is a tool that truly understands fashion retail. It provides life cycle management insights and helps us compare and simulate strategies to make informed decisions."
As the commercial lead for the DACH region, Stephan is tasked with ensuring optimal stock positioning, addressing seasonality, and managing markdown timing. These responsibilities are crucial for delivering a seamless customer experience and maintaining profitability. For Stephan, the primary challenges lie in finding the right balance:
Let's break that down:
- Timing, Pricing, and Volume:
- The key to successful markdowns is identifying the optimal moment to act, determining the right level of price reductions, and managing the appropriate volumes—all within a structured framework.
- The key to successful markdowns is identifying the optimal moment to act, determining the right level of price reductions, and managing the appropriate volumes—all within a structured framework.
- Strategic Flexibility:
- Stephan must balance the need to move inventory efficiently with profitability goals, all while keeping the assortment relevant for the customer.
Stephan recognized that traditional methods were no longer sufficient to address the complexities of modern retail. The scale and pace of operations required a smarter, more agile approach to markdown management.
Enter Markmi.
Markmi has revolutionized how Stephan and his team approach markdowns, providing the insights they need to tackle these challenges with precision and foresight.
Through easy-customizable business rules, the assistant can absorb the specific way of doing business at C&A. With AI-driven sales forecasting, Markmi can predict the sales at any given discount for every item in the catalog. As such, Stephan can understand the expected sales based on historical patterns and what sales uplift to expect when applying a specific discount.
By enabling multiple scenario analysis, Markmi allows Stephan's team to compare multiple markdown strategies. As a user, he can determine the markdown intensity, embracing higher or lower markdowns for a given category. This empowers them to make informed decisions based on clear, data-driven insights into how different scenarios will evolve.
Markmi doesn't stop at today's challenges—it opens the door for future opportunities. Stephan envisions expanding AI's role beyond markdowns to earlier planning stages, further streamlining operations and boosting efficiency.
"Markmi has given us a better base for decision-making. I’m excited to see how we can expand AI’s role in our operations."
So, key benefits for Stephan are:
Markmi: A new dawn for setting markdowns in fashion retail
With Markmi, C&A's markdown process is no longer reactive or inconsistent. Instead, it's a data-driven, AI-powered approach that ensures:
- Consistency: Across all 17 countries, with aligned dashboards and strategies.
- Efficiency: Freed resources and improved forecasting accuracy.
- Speed: Rapid decision-making, reducing go-to-market time.
More importantly, these benefits directly drive the core value of an AI-driven markdown assistant: leaving less money on the table.
Or, as Markus notes:
About C&A Europe:
With over 1,300 stores in 17 European countries and approximately 25,000 employees, C&A is one of the leading fashion companies in Europe. Every day, C&A welcomes millions of visitors to its stores across Europe and its online shop. C&A offers high-quality and durable fashion at affordable prices for everyone. For more information, please visit our website.
Like to learn more about how Markmi can help your fashion retail business maximize profits and make smarter, faster markdown decisions, contact us!
