How Retailers Are Strategizing Smarter, Not Just Leaner

For retailers, growing margin isn’t as simple as slashing markdowns. The most forward-thinking retailers are reimagining their strategies; building more margin into their assortments and planning processes from the start, rather than trying to claw it back at the end.

Here’s how smart retailers are reframing the margin conversation, and where tools like Toolio can help.

1. Private Label Expansion with Guardrails

Many retailers are growing margin by increasing private label penetration. These products typically offer better initial markups and more control over cost structures. But expanding private label too fast, or without hitting minimum order quantities (MOQs), can introduce risk.

What’s working:

• Testing private label in high-margin categories like candles, drinkware, or accessories.
• Using long-range assortment plans to model MOQ feasibility before committing.

2. Assortment Optimization = Margin Expansion

Too much duplication or a long tail of underperformers can drag down both productivity and profit. Optimizing assortments by channel, price point, and performance tier helps drive higher sales per SKU and fewer markdowns.

What’s working:

• Classifying SKUs by productivity and streamlining the bottom quartile.
• Ensuring “good, better, best” price points don’t cannibalize each other.
• Visualizing assortments to catch redundancies before they go to buy.

3. Forecast Accuracy > Inventory Fire Drills

Stocking the right inventory—not too much, not too little—has always been key to protecting margin. The twist today? Forecasting is no longer just about demand. It’s also about intent, ensuring your buying plans match your product strategy and store needs.

What’s working:

• Using seasonal curves and cluster-based buying to drive smarter initial allocations.
• Building inventory receipts directly from assortment plans, not in isolation.
• Measuring in-season success by margin realized, not just units sold.

4. Planned Markdown Strategy (Yes, Still Important)

Markdowns aren't the villain, they’re just often misunderstood. The best retailers plan for markdowns as part of the lifecycle, not as a last-ditch effort. They identify where they can clear through product without sacrificing future sales or brand equity.

What’s working:

• Segmenting markdown plans by product type and seasonality.
• Tracking sell-through at full price vs. promoted price to measure lift.
• Creating clear triggers for first, second, and final markdown events.

Bonus: Bring It All Together with Connected Planning

Margin growth is holistic. It lives in planning, buying, allocation, and hindsight. That’s why more brands are turning to connected platforms like Toolio to unify those workflows. With visibility from open-to-buy through to in-season allocation and performance tracking, retailers can make decisions that support margin from day one, not just chase it at the end.

Retail Margin Growth is a System, Not a Shortcut

Retailers today aren’t just cutting their way to healthier margins. They’re using data, process, and strategy to architect margin earlier in the product lifecycle. From smarter buys and tighter assortments to structured markdown planning, the retailers who win moving forward will be the ones who know: margin is a strategy, not a salvage job.

If you’re ready to build margin into your planning process, we’re here to help. Speak to an expert to see how it could work for your team.