Prices in clearance move in visible steps, holding at each level for a period before dropping again. The pattern reflects how the decision is made rather than any technical constraint.

Each step is an experiment

A reduction is applied to find out how many units the new price will move, and that cannot be known until the price has been in place long enough to observe.

Holding the level for a defined period produces a clean reading of the sales rate, which then informs whether the next step is needed and how large it should be.

Continuous small reductions would produce no such reading, because the price would change before enough sales had accumulated to interpret the response.

Going too deep too early wastes margin

If a shallow reduction would have cleared the stock, a deep one gives away margin on every unit that would have sold anyway.

Stepping down therefore starts conservatively and increases only when the observed rate proves insufficient, which is the cheapest way to find the clearing price.

The cost of this approach is time, and time is limited by the season. The step sizes are set so that the sequence completes before the window closes.

Steps carry a signal to the shopper

A visible reduction level communicates that the item is in clearance, which changes how it is evaluated. Shoppers apply different expectations to clearance stock.

Standard step sizes are used partly because they are recognisable, and an unfamiliar figure reads as an ordinary price rather than as a markdown.

The steps also create their own urgency in the opposite direction. Shoppers who understand the pattern wait for the next one, which is a cost the retailer accepts.

Operational cost limits the frequency

Changing a price in a physical shop means labels, shelf edges, signage and system updates, all of which take staff time across every location.

That cost is per change rather than per unit, so a small number of larger steps is considerably cheaper to execute than many small ones.

Online sellers face almost none of this, which is why their clearance pricing moves more often and in less regular increments than the equivalent in stores.

The final step is not always a price

At some point the remaining stock is too thin or too fragmented to merit further attention, and the sequence ends without reaching a clearing price.

What remains is usually consolidated to fewer locations, sold to a clearance buyer as a lot, or routed to an outlet channel at a single negotiated figure.

This is why the deepest advertised reduction is rarely the lowest price the stock changes hands at. The last transaction happens outside the shop entirely.