What is the goal of a markdown in retail?

The primary goal of a markdown in retail is to stimulate sales of slow-moving merchandise. Retailers use markdowns as a strategic tool to boost sales and clear out inventory that is not selling as quickly as expected. By reducing the price on these items, retailers create a sense of urgency and attract price-sensitive customers, ultimately helping to increase foot traffic and encourage purchases of items that might otherwise remain on the shelves.

Markdowns play a crucial role in managing product lifecycles, especially for seasonal or perishable goods, where maintaining fresh merchandise is essential. By effectively utilizing markdowns, retailers can optimize inventory turnover, ensuring that they can restock with new offerings and meet customer demand with timely product availability. Thus, stimulating sales of slow-moving merchandise makes markdowns an integral part of effective inventory management and merchandising strategies.