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Promotheus: An End-to-End Machine Learning Framework for Optimizing Markdown in Online Fashion E-commerce by Eleanor Loh; Jalaj Khandelwal; Brian Regan; Duncan A. Little is a scholarly article available to read on EtoBox.

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Managing discount promotional events ("markdown") is a significant part of running an e-commerce business, and inefficiencies here can significantly hamper a retailer's profitability. Traditional approaches for tackling this problem rely heavily on price elasticity modelling. However, the partial information nature of price elasticity modelling, together with the non-negotiable responsibility for protecting profitability, mean that machine learning practitioners must often go through great lengths to define strategies for measuring offline model quality. In the face of this, many retailers fall back on rule-based methods, thus forgoing significant gains in profitability that can be captured by machine learning. In this paper, we introduce two novel end-to-end markdown management systems for optimising markdown at different stages of a retailer's journey. The first system, "Ithax, " enacts a rational supply-side pricing strategy without demand estimation, and can be usefully deployed as a "cold start" solution to collect markdown data while maintaining revenue control. The second system, "Promotheus, " presents a full framework for markdown optimization with price elasticity. We des

Author

Eleanor Loh; Jalaj Khandelwal; Brian Regan; Duncan A. Little

Publisher

ACM

Published

2022

Language

EN