ORSAY Fashions Higher Profits via Reduced Markdowns

Leveraging AI for Smarter Pricing

Fast-fashion retailer ORSAY manages the complete supply chain, from design and production to operating over 700 stores, along with operating a busy e-commerce site.

With a trendy, highly seasonal product line, ORSAY is challenged to manage the pricing of its apparel products across their lifecycle, balancing profitability with sell-through.

ORSAY partnered with Blue Yonder to replace manual pricing analysis and guesswork with the artificial intelligence (AI) enabled capabilities of Luminate Clearance Pricing. ORSAY has decreased markdowns and improved its margins via data-driven, automated pricing.

Business Impact

Up to a 50% reduction in markdowns
10% Improvement in stock per discount percentage
Reduced Inventory Costs
Increased Staff Productivity

The Challenge

Profitably selling trendy, fast-fashion products in a competitive omni-channel environment represented a strategic challenge for ORSAY. In defining pricing, the retailer was trying to balance a range of complex objectives, including:

  • Understanding and meeting shoppers' value expectations
  • Increasing revenues and margins via fewer markdowns
  • Maximizing sustainability by eliminating waste
  • Reducing inventory costs by clearing stock more effectively
  • Optimizing staff productivity, both in the office and in stores

The depth of analysis required to balance these goals exceeded the capabilities of ORSAY’s human planners and manual pricing processes.

The Results

By leveraging AI to consider current and historical data — along with complex factors such as competitive prices, substitution and cannibalization effects ― Blue Yonder Luminate Clearance Pricing automatically determines the right level of price elasticity for each of ORSAY’s apparel items.

As ORSAY relies on this solution to make the most profitable and intelligent pricing decisions, the retailer is applying less frequent discounts. In the past, ORSAY applied three or four markdowns per item, each of which eroded profit margins. Today ORSAY applies only two or three markdowns per item. By relying on data-driven, automated decision making, ORSAY is maximizing both profitability and staff productivity, while reducing inventory and waste.

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