Why markdown management has become fashion retail's most urgent conversation

You notice it at industry events. You notice it over coffee with merchandising leads. Fashion retail is again being squeezed into an uncomfortable position, between rising input costs, consumer reluctance to spend, and the ever-shortening window to sell at full price. The global unrest of 2026 will squeeze margins to their thinnest yet.

The lesson leading retailers learned from the COVID era is that getting the price right stops being merely a commercial advantage. It becomes a prerequisite for survival. And within pricing, markdown is the moment where the most margin is at stake.

Yet markdown management rarely gets the agenda space it deserves. The conversation moves to AI adoption, omnichannel orchestration, sustainability. Important topics. Just not the one where profitability is being decided.

At the same time, the role of the merchandiser is shifting. BCG surveyed 350 retailers this year and found that merchants spend 40% of their time on manual tasks that could be automated. The future is a leaner organisation, where fewer people shift from merchandiser to strategic category leader.

Most leaders agree with that vision. Most organisations are still far from it. That is why this article goes deeper on the fundamental shifts underway. If you want the full picture of what retail executives and experts across Europe told us, our 2026 Guide to Markdown Management in Fashion Retail is the longread. Here is the essence.

What has actually changed

For decades, the math was simple. Retailers aimed for 70 to 75% full-price sell-through. A manageable tail cleared through markdowns, and the bulk of inventory delivered healthy margins.

That baseline is gone. "The world has changed and sell-throughs have come down," says Philip Mountford, former CEO of Hunkemöller. "There are more fashion retailers with 50% full-price sell-through than there were pre-COVID, where 70, 75 was a really standard number."

Dropping twenty points of full-price sell-through changes the economics of every collection. More inventory moves at discount. Markdown decisions carry more weight than ever. And most retailers are still making them the same way they did a decade ago.

The operating reality has shifted too. "Everything is much more volatile and unpredictable," says Matthias Hindriks, CEO of ZEB/The Fashion Society. "There is so much to keep under control, otherwise things start to fall apart really fast."

Where the margin goes

Markdown strategy is one of the few levers left that fashion retailers fully control. "Pricing is really the crucial lever fashion retailers still control," says Jack Stratten, Director at Insider Trends. "They can't control saturation. They can't get rid of their stores. Supply chains remain challenging. Discovery happens on platforms they don't own. But pricing? Starting prices, markdown strategy, how you position discounts, which channels get what prices. They control all of that."

Control, though, is a function of the tools. Markdown decisions involve dozens of simultaneous interactions across categories, channels and regions. Human judgment handles a handful of variables at a time. Spreadsheets were never built for this.

The cost shows up in margin. It also shows up in where the energy of the team goes. Caterina Ticchio, Head of Merchandising and Planning at C.P. Company with senior leadership experience across Diesel, C&A, Guess, Ralph Lauren and Levi's, captures it sharply: "You are investing energy in the mistakes of last year's buying decisions. Next year, you will spend energy on this year's mistakes again."

What a different approach looks like

The retailers who have moved ahead of the shift describe the same change. The work has not disappeared. It has moved.

"Working with markdown optimisation tooling lets us price our assortment in a much more sophisticated way," says Luc De Baets, Buying Director at Torfs. "We don't put everything on discount from day one. We mark down select items to create initial traffic, then apply the right discount at the right moment."

At C&A, which makes markdown decisions across 1,300 stores in 17 countries, the reframe goes further. "Markdowns are one of the biggest cost lines in our P&L," says Markus Krenn, VP and Head of Commercial Planning Europe. The question his team now debates is not which product gets which discount, but which strategy serves the goals this season. Product-by-product becomes strategy-by-strategy.

The gap is widening

The retailers treating markdown management as a strategic capability and those treating it as a seasonal task are moving apart. The complexity is compounding. The margin pressure is structural. And the tools to close the gap exist today.

For commercial and merchandising leaders, the question is no longer whether the approach needs to change. It is how long the organisation can afford to wait.

Laurent Mainil is Co-Founder and CEO of Markmi, the markdown management assistant for fashion retail.

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