Retailers face the ongoing challenge of moving products while maintaining profitability. Two common strategies for driving sales are markdowns and promotions, but knowing when to use each can make or break a promotional campaign. Here’s a simple breakdown:
Markdowns involve permanently reducing the price of an item. This strategy is most effective in:
Markdowns are ideal for reducing losses on items with dwindling demand. However, they don’t create the same buzz as promotions and can potentially erode perceived value if overused.
Promotions, on the other hand, are temporary offers designed to boost sales within a set timeframe. Examples include discounts, buy-one-get-one deals, or loyalty rewards. Promotions work best for:
Promotions are excellent for generating traffic and engagement, but they must be carefully planned to avoid training customers to wait for deals.
Striking the right balance ensures you meet sales goals while keeping customers satisfied and engaged.
Founded by experienced data scientists and retail experts, Cognira is the leading artificial intelligence solutions provider.
