Summary

In this chapter, we have dived into the details of sales analysis and markdown applications. As discussed, there is a trade-off between reducing the price of items to increase sales and reduce stock-related costs and the amount of revenue that is lost due to that decrease in price. In the case of retail, these outcomes are impacted by multiple factors, among which are the location of a given store, the environmental and economic conditions, and seasonality, as we saw with the analysis of sales during different holiday seasons.

The analysis and prediction of sales and markdowns can be applied to fine-tune the price reductions applied to maintain the equilibrium between profitability and sales, as well as to have a deep understanding of the variables involved and their relative impact that can lead to the design of better markdown strategies.

In the next chapter, we will dive into the specifics of learning the consumer behavior at e-commerce retailers, understanding consumer...