How do you spot excess inventory at a retailer or brand before it shows in reported results?

• Markdown breadth: more of the range on sale than at the same point last year.
• Discount depth: bigger reductions on the products that are on sale.
• In-stock rate: products staying available even as prices fall, which suggests demand is not clearing stock.

Seasonality dominates retail discounting, so the comparison that matters is the same fiscal weeks in prior years, not last week. Promotional calendars also move: a sale that started a week earlier this year can look like a deterioration if the calendars are not aligned.

Channel matters as well. A retailer discounting a brand's products heavily while the brand holds price on its own site points to a wholesale inventory problem rather than a brand problem.

1. 1Map the company to its brands and retailers and choose the categories that drive margin.
2. 2Track markdown breadth and depth weekly, aligned to the company's fiscal calendar.
3. 3Compare with the same weeks in the prior two years to set a baseline.
4. 4Cross-check with in-stock rates and new-product share to separate clearance from planned promotions.

• Markdown breadth: The share of a brand's or retailer's live products that are selling below their full price at a point in time.
• Discount depth: The average percentage reduction from full price across products that are on sale.
• In-stock rate: The percentage of a brand's or retailer's listed products that are available to buy.
• New-product share: The percentage of a brand's live assortment that was first seen within a recent window, such as the last 13 weeks.

How each measure is built: methodology.