What is a key reason for conducting product markdowns?

Conducting product markdowns primarily aims to stimulate sales and clear excess inventory. When a retailer lowers prices on certain items, it can attract more customers who may perceive the products as a better deal, thus increasing sales volume. This strategy is particularly effective for seasonal items or products that have not sold as anticipated, as it helps to make room for new inventory and reduce holding costs associated with unsold goods.

Markdowns can also serve as a way to move products quickly, especially when inventory levels are high and there is a risk of obsolescence or changing consumer trends. By appealing to price-sensitive shoppers, markdowns can drive traffic to stores—both physical and online—leading to increased footfall, brand exposure, and the potential for upselling other higher-margin items.

While other options may touch upon various aspects of retail strategy, they do not capture the primary and most impactful reason behind markdowns as effectively as stimulating sales and clearing inventory does.