C&A maximizes the impact of its markdowns with new AI assistant Markmi

Markdowns are a crucial part of fashion retail. They present a strategic opportunity to maximize revenue and manage overstock during or at the end of a season, but they also bring significant complexity. C&A, one of Europe's largest fashion chains, recently made a fundamental shift in its markdown process by introducing AI. The AI-powered markdown recommendations from fashion AI company Markmi enable the retailer to execute markdowns more quickly and with better results across 17 countries and more than 1,300 stores.

The Challenge: Managing Large-Scale Markdowns

"Markdowns are ultimately about balancing revenue, demand, and inventory," explains Markus Krenn, Vice President and Head of Commercial Planning Europe at C&A. "Our goal is, of course, to maximize full-price sales. But we need to use markdowns strategically to sell through the right products or categories at the right time, with optimal margins."

Traditionally, this markdown process was largely manual. Merchandising teams worked with spreadsheets to price down up to 5,000 products per season, spread across 17 countries and often in multiple phases. This could result in as many as 170,000 individual decisions, an enormous task. "The first hundred decisions are often still accurate and efficient, but after that, accuracy tends to decline," says Stephan Gerke, Commercial Lead DACH at C&A. "Our process was too often time-consuming, inconsistent, and not scalable."

From AI in Marketing to Strategic Price Optimization

Many fashion retailers have integrated AI into areas like marketing automation and design, but its application in core processes such as pricing is still relatively new. "Markdowns are one of the largest cost items on a fashion retailer’s Profit & Loss Statement, yet decision-making in this area has long lacked the support of advanced technology," says Krenn. "That had to change."

That’s why C&A chose an AI solution specifically designed for fashion retail. Markmi, developed in collaboration with fashion retail merchandisers, takes into account seasonal patterns, inventory risks, and price elasticity per product category. The entire markdown assistant is also aligned with the typical workflow of a fashion merchandiser or planner. "At C&A, we work within a clear framework," says Gerke. "Markus coordinates the European strategy, and we translate that into a markdown approach tailored to our local markets. With Markmi, we can now test multiple scenarios and make better-informed, optimized decisions for each category or even individual items."

Beyond strategic planning, the tool also delivers operational efficiency. "Markdowns don’t just have a financial impact; they also affect logistics," Gerke adds. "Every price change means stores must adjust price tags and present products differently. Thanks to Markmi, we work faster and more accurately, allowing us to manage these steps much more effectively."

From Days to Minutes: AI Speeds Up and Improves Decision-Making

AI has had a major impact on decision-making speed. Where determining markdowns previously took three to four days, C&A can now make the right decisions within 30 minutes.

"Previously, merchandisers had to manually sift through data in spreadsheets to determine the right discounts. Now, we receive almost immediate recommendations based on price elasticity and a combination of historical and real-time sales data," says Krenn. "This gives us a significant competitive advantage." This advantage is crucial not only during traditional end-of-season sales but also for increasingly important discount events such as Black Friday and mid-season sales.

With AI, C&A can approach markdowns not only reactively but also proactively. "We can now make decisions 7 to 14 days earlier, with predictions providing a more accurate picture," says Gerke. "This helps us not only with pricing but also with store layouts, staffing, and marketing initiatives."

More Control, Better Margins with AI-Driven Markdowns

AI-driven markdowns have not only saved C&A time but also given the company greater control over its financial performance. "Thanks to Markmi, we can allocate our markdown budgets more effectively and achieve significantly better revenue and margins."

Although the transition to AI required a cultural shift, trust in the technology is growing. "Full confidence will always be a challenge, but with the right people and ambitions on both sides, our trust in this new way of working continues to grow," says Gerke. "We are more data-driven, less reliant on gut feelings, and can now make decisions based on proven data."

AI doesn’t just address today’s challenges, it opens the door to future opportunities. Stephan sees potential for expanding AI’s role beyond markdowns to earlier planning stages, further streamlining operations, and improving efficiency.

"Markmi has given us a stronger foundation for decision-making. I look forward to exploring how we can further integrate AI into our specific fashion retail operations," says Gerke.