Pricing transformation at Hunkemöller: Delivering better markdown outcomes with AI

Why Hunkemöller chose to transform markdown with AI

A deep review was the trigger. Markdown across the company was increasing and showed persistent negative trends:

• Full-price sell-through percentages were falling.
• Average discounts—and the share of high-discount tiers—were rising.

Hunkemöller operates in many countries and across both offline and online channels. The complexity of predicting the right discount for each market and channel was a Herculean task, and as a result, its average discount sat above historical norms.

The message was clear: too much was being given away. Stronger demand forecasting was needed to avoid clearing stock at excessively low prices.

A gut feeling became a structured challenge—one that called for a systematic, AI-driven approach to markdown.

How markdown worked before AI

Before the transformation, pricing and markdown were fully manual. The team relied on experience. Decisions were made step by step as each sale unfolded. The full season was not planned in one go. Meanwhile, as scale and the need for tighter control grew, managing at SKU or fine product-group level in Excel alone became too difficult.

So Hunkemöller turned to ADC to implement and test an AI approach to discount management.

A/B testing to determine the impact of working with AI

To see whether the new approach would bring measurable benefits in a short period, the team started with A/B testing of SPARO—Strategic Pricing and Revenue Optimisation. SPARO is a fully customisable decision-support system that blends machine learning with business logic, delivering pricing recommendations in structured “waves” rather than one-off changes. It is designed to balance speed and margin protection—moving stock efficiently without discounting too deeply.

SPARO was used throughout the entire sales period—starting with Black Friday and running all the way through the end-of-season sales—across both channels (online and in stores) and in every country.

To get an objective view, they set up test and control groups:

Test: ADC’s discount recommendations plus the merchandising team’s judgement.
Control: the traditional approach by the merchandising team alone.
They did not just compare discount depth; they also tracked margin and volume, as it is easy to cut deeper and lose units. On all three metrics, the results from combining the merchandising team’s expertise with SPARO were significantly better.

What changed in the merchandising team’s workflow

With SPARO, Hunkemöller added a new step to its pricing cadence:

ADC generates recommended discount levels.
The merchandising team reviews them and gives feedback.
Where context requires it, the team applies targeted overwrites; otherwise, recommendations are accepted as they are.
Early on, reviews sometimes took longer and created friction. Today, the process is smooth—reviews and overwrites happen on time and without issues.

Because SPARO has already proven its advantage, control-group checks have been retired. The approach is now standard practice under a three-year strategic partnership with ADC.