Clearance prices drop at intervals rather than continuously, and the intervals are set in advance. The schedule exists so a retailer can plan the space rather than react to it.
Space is the resource being recovered
Retail floor space generates a certain return per square metre, and clearance stock occupying it earns far less than incoming merchandise would.
The clearance schedule is calculated backwards from when the space is needed, which fixes both the number of reductions and their timing.
This is why clearance moves faster in stores where space is tight and more slowly in larger formats with room to spare.
Each step captures a different shopper
The first reduction reaches shoppers who wanted the item and found the original price marginal, converting existing interest at the smallest possible cost.
Each subsequent step reaches a group that would not have bought at the previous level, extracting some value from stock that would otherwise sell to nobody.
Going straight to the final price would give away everything the earlier steps collect, which is why the staircase exists rather than a single cut.
Ticketing reveals the position
Many retailers signal the stage through the price ending, using distinct final digits for each markdown level, and staff can usually explain the convention.
The number of reductions already applied indicates how long the item has been on clearance and how close it is to the final stage.
An item at the last stage will not be reduced further, because the next step is removal rather than another price.
Consolidation happens before the end
Remaining stock is often gathered into fewer stores or shipped to a clearance location, since concentrated stock sells faster than scattered single units.
This is why an item can vanish from one store while appearing in quantity elsewhere, without any of it having been sold.
It also explains why the deepest reductions frequently appear in dedicated clearance outlets rather than in the original store.
Deciding when to buy
Waiting for the next reduction is a bet that the specific item survives, and the odds worsen for common sizes and popular colours.
For items where any variant would do, waiting costs little and usually pays, since something in the range will still be there.
For a specific item in a specific size, the first reduction is frequently the last realistic opportunity to buy it at all. The deeper price will exist, but almost certainly not on the unit you wanted.