Description
Whenever Target needs to reduce the price on a product below its normal retail price, a Markdown will be used.
The Four Types of Markdowns
A Markdowns | All Gone: Clearance, Salvage, Marketing Initiated Returns (MIRs), Quality Assurance (QA) Recalls |
B Markdowns | Broken: Damaged, Defective, Outdated, Re-wrapped |
C Markdowns | Competitive: Permanent price reduction based on competitive retailer activity and comp shopping |
D Markdowns | Discount temporary promotional price cuts: Circle offers, Coupons, Weekly Ads |
Markdowns in Contracts
You may have noticed contracts that have Markdowns as a calculation input for contractual deductions. A, B, and D Markdowns are used in conjunction with contracts. C Markdowns are almost never used in contracts.
A Markdowns are used in contracts associated with transitions, revisions and occasional NOP (Not on Planogram) inventory. This also includes small Markdowns in non-transition timeframes driven by stores' misplaced units of discontinued product and clearance inventory
B Markdowns are occasionally used in contracts for Defective Allowances.
D Markdowns are used in contracts associated with discounts related to promotions, temporary price cuts (TPCs), and coupons. Specific contract vehicles can be TPCs, Circular, General Incentive, and Buy Something/Get Something offers. They can also cover small Markdowns associated with Registry, RedCard, and other Target-wide loyalty driving coupons.