Sports Unlimited Case Study

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After segmenting products, we visualize historical Revenue Ratio averages with markdown no markdown, 50% and 60% in different number of weeks by pivot table for each group. For short lifecycle and low sell-through rate products, we could see figure 2 as below.

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Figure 2

Revenue Ratio for no markdown is 17.73%, marked as yellow. Meanwhile, we can also observe Revenue Ratio with 50% markdown in different weeks, here week 4, 7, 8, 9, by doing 50% markdown all show increase in Revenue Ratio, the best week is week 9 with 29.75% Revenue Ratio. For 60% markdown, we don’t recommend doing markdown in week 9 since it only got 12.26% Revenue Ratio, which is lower than no markdown policy. Best week of 60% markdown is week 7. This analysis could be applied to other 8 product segments as well.

Recommendations

Based on our visualization tool, buyers are easy to compare revenue between different weeks and different markdowns with no markdown policy. And Intuitively, with different clusters, buyers can recognize which week has the biggest revenue achievement, and which week is not suitable for markdown. If more information like how long this markdown policy should last is required, we might need more data information to make reliable recommendations.

We strongly feel confident about our recommendation is because the PO tool only took week 3 sell-through rate into considerations. However, our model considers not only week 3 sell-through rate, but also corporate lifecycle length as significant potential factor for customizing markdown policy. And with more data provided, we could use the same methodology to get finer product segmentations. Hence, our model is easy to implement and update.