What term describes the markdowns that retailers apply to clear out old inventory in anticipation of new models?

The term that best describes the markdowns retailers use to clear out old inventory in anticipation of new models is “clearance pricing.” This strategy is specifically designed for the purpose of moving out older stock to make space for new products and is typically characterized by significant reductions in price to attract customers. Clearance pricing occurs at the end of a product's lifecycle in the store and aims to minimize leftover inventory.

While “markdowns” is a broader term that refers to any reduction in the original selling price, it does not specifically imply the context of clearing out inventory for new products. Markdowns can occur for various reasons, such as slow-moving products or seasonal changes, but clearance pricing is specifically targeted at eliminating old stock in preparation for incoming inventory.

“Promotional pricing” typically involves temporary price reductions to boost sales for promotional events and may not necessarily relate to clearing outdated stock. “Seasonal discounts” can apply to products that are out of season, but they may not capture the full scope or intent of clearing inventory as effectively as clearance pricing does. In this context, clearance pricing distinctly serves the purpose of directly facilitating inventory turnover, making it the most appropriate term.