What is Markdown in Retail? Explained

Markdown denotes a reduction in the original selling price of a product in the retail industry, often implemented to stimulate sales, clear excess inventory, or respond to market conditions. Markdowns can be temporary or permanent and are typically expressed as a percentage discount. Retailers strategically use markdowns to manage inventory, drive customer traffic, and maximize revenue. Effective markdown strategies involve careful consideration of factors such as seasonality, demand fluctuations, and product lifecycles. By adjusting prices strategically, retailers can optimize sales and maintain a healthy balance between supply and demand in a competitive market.