The Art of Data-Driven Business

9

Using Historical Markdown Data to Predict Sales

Many retailers have no choice but to follow the industry trend of increased use of discounts and special marketing to maintain a competitive edge in today’s oversaturated market. This is because most of the new customers are more price-sensitive and will check prices across websites to discover the bests offers for specific products.

Discounting, however, has its drawbacks. While promotions can speed up sales, businesses also run the danger of further profit loss when offering discounts without conducting adequate research. One challenge of modeling retail data is the need to make decisions based on limited history. If Christmas comes but once a year, so does the chance to see how strategic decisions ...