Clearance prices do not fall gradually. They drop in steps, at intervals, and the steps are decided before the season begins rather than in response to what is left on the rail.
The exit date is fixed before the season opens
Floor space is allocated on a calendar, and the date on which a season must vacate its space is set when the year is planned.
Everything about the markdown schedule works backwards from that date. The question is not whether the stock will be cleared but at what price.
Because the deadline is immovable, reductions continue regardless of how the goods are selling, which is why the last step is often far below cost.
Each step is sized to trigger a new group of buyers
A reduction only works if it crosses a threshold at which someone who was not going to buy now will.
Small cuts do not move goods that failed to sell at full price, so schedules use meaningful steps, each roughly doubling the discount already taken.
The first step recruits shoppers who liked the item but not the price, and later steps recruit those buying opportunistically at whatever is left.
Size and colour break the rail apart
Markdowns run at style level, but what remains on the rail is a broken size run, usually the extremes rather than the middle.
Once the common sizes are gone, further reductions have less effect, because the remaining stock does not fit most of the people looking at it.
That is why deep discounts late in a clearance often sit on items that appear attractive and are unwearable for the shopper holding them.
Stock is consolidated between stores
Rather than reduce everywhere, chains move remaining inventory into fewer locations or into clearance-focused stores.
Consolidation rebuilds a shoppable assortment from fragments and moves the goods out of prime selling space in the stores that need it.
It also explains the sudden appearance of a season's worth of stock in one place, weeks after the same items vanished elsewhere.
Why waiting is not free
The schedule is public in the sense that it is predictable, so shoppers learn to wait for the next step.
Retailers know this and manage it by holding back reductions on the strongest items, or by removing them from the floor before the deepest steps arrive.
Waiting therefore trades a better price against a falling chance of the item still being there, and on popular sizes that chance falls fastest.