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Our Thought Provoking Insights

3 Reasons Why Markdown Software Implementations Fail

It is widely known that significant profit can be generated by using a more sophisticated data science-based approach to Markdown rather than the traditional Merchandiser and Excel-led approach. But if a Markdown Optimisation software solution is chosen and its implementation is costly or at risk of failing to successfully launch, then the business case will never materialise.

Buying a Markdown software solution does not equal buying a Markdown strategy and process, nor an understanding of how the solution works. A service-based Markdown Optimisation approach offers much greater support and business intelligence than a software tool and regularly leads to greater benefits being generated.

So why do the majority of Markdown Optimisation software initiatives fail and how can these mistakes be avoided?

Reason 1: Choosing Style Over Substance

Glitzy software can look appealing in a demo room, but looks can be deceiving. Effecting real change is not just about a magic bullet, but about the hearts and minds of the users and organisation going through the change. Software companies, by definition, are not skilled in change management and do not recognise that the solution ought to fit the right process, not the other way around.

Using a Service for Markdown Optimisation, as opposed to a piece of software, ensures that real substance is at the heart of the journey; bringing the experience and expertise of the Markdown Optimisation Service together with the Brand and Product in-house knowledge within the business.

Reason 2: ‘Drop & Go’ Solutions Appear Easy but are Not Flexible

Rigid solutions are a problem for businesses that don’t have mature Markdown processes, or businesses looking to test alternative Markdown strategies. Any software that requires your process to fit to the standard of the solution rather than the other way around risks a lack of user adoption which results in users continuing with their current ways of working. When users end up working around the solution instead, the benefits of the implementation are at risk.

‘Drop & Go’ solutions, by design, guarantee the “Go”, as the implementation team leaves at the end and does not offer change management support or further business training. Teams can end up overriding the tool too much as they do not trust it; again risking benefits.

Buying a tool does not equal buying a strategy which is what a Service-based approach to Markdown ensures. The close partnership of a Service guarantees the business process is not interrupted and is supported in evolving its strategy as the Service team’s experience and expertise are leveraged for each business. Services will also naturally employ better technologies over time and trend towards increasing sophistication and automation to improve the ROI of the Service for its duration.

Reason 3: Technical Over Business Expertise Risks Financial Success

Software companies have software experts and data scientists at their core, rather than Markdown experts. Markdown specialists who have successfully deployed a variety of solutions are rare but valuable in a deployment and critical to its success.

Software teams run by developers and implementers lack real-world business expertise and tend to be comprised of an inexperienced junior team of “experts” that are missing fundamental skills to be able to lead a successful implementation and business change.

Markdown Services are successfully run by Markdown experts with real-world Markdown experience, supported by world-class data scientists capable of applying the right AI and Machine Learning techniques. They know how to implement Markdown Optimisation in retail businesses.

To conclude...

Markdown Optimisation as a Service repeatedly delivers greater margin and sell-through benefits than attempting Markdown with a traditional Merchandiser-led approach. Services are far quicker to implement than Software, are lower cost, deliver more benefit and have the highest success rate. They are a partnership relationship that brings year-round pricing and retailing expertise and insight to complement that of merchandising teams. They also help Markdown events to perform better due to strategic advisory support which can be accessed to aide phasing, timing, and messaging of Markdown.

Here at TPC, all of our Markdown Optimisation consultants have a background in merchandising and we have successfully managed markdown optimisation projects all over the world. This combination of real retail experience, world-class data science & AI capability and expertise in change management are the main reasons why our Markdown Optimisation services have a 100% success rate. Get in touch via LinkedIn or email us to find out more – let's work together!



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