Purpose

Slow seller management in Merchandise and Assortment Planning is a tool for time-based planning of markdown proposals. This helps you reduce your warehouse stock at the end of a season and reduce markdown losses due to planned price reductions.

The following diagram provides an overview of slow seller management.

Process Flow

The slow seller management process is divided into markdown planning and markdown controlling. In the planning phase, you define strategies and rules for how markdown proposals will be created in the subsequent control phase.

The control phase for products starts with the planned start of their presentation period or with the time of their first goods receipt in a store. Markdown proposals are determined based on the sales and stock data and the rules that you have defined. You can transfer the markdown proposals to a system in which the proposals are examined and, if necessary, operational price changes are carried out. The data can be exchanged using the open XML standard and the SAP Exchange Infrastructure (SAP XI). Another option is for markdown proposals to be copied directly to the pricing worklist of an SAP R/3 Retail System and processed there (see also Release Workbench) .

Markdown proposals form the central regulations for controlling price reductions during the season. Markdown proposals are automatically created in a worklist in Merchandise and Assortment Planning based on markdown profiles and stock and sales data.

The following diagram shows the sequence of events:

The markdown profile can be shown in the form of a matrix:

The rows represent the selling period of a product. The columns represent possible sales ratios (SR). In the example shown, if the sales ratio is between 20% and 40% after a selling period of four weeks, a price reduction of 35% will be proposed for a product that is assigned to this profile. This price reduction refers to the original sales price of the product.

As an illustration, a (planned) target sales ratio can be shown in addition to the selling period. This target sales ratio represents an ideal sales profile.

Markdown profiles can be classified by the following attributes:

The central characteristic for the strategic orientation of a profile is the fashion grade. It can be used, for example, to classify the markdown risk or the typical sales period of a product. The fashion grade “high fashion” can, for example, be used to indicate profiles with a maximum selling period of 2 months (high risk of markdown), while profiles with the fashion grade “fashion” could be used for merchandise with a maximum selling period of 6 months (lower risk of markdown).

Process Flow