What is "markdown pricing" intended to achieve?

Markdown pricing is primarily designed to stimulate sales and manage inventory effectively. When retailers apply markdowns, they reduce the prices of items to make them more attractive to consumers. This approach helps clear out excess stock, especially for seasonal merchandise or products that may not be selling as well as anticipated. By lowering prices, businesses can enhance foot traffic in stores or increase online sales, thereby accelerating turnover of inventory.

This strategy is especially important in a competitive retail environment, where stagnant inventory can lead to lost sales opportunities and increased holding costs. In essence, markdown pricing is a tactical approach to balance supply and demand, encourage consumer purchases, and maintain a dynamic inventory flow.