Clearance vs. sale: promotion keywords and their implications for retailers and public policy

Promotion keywords (e.g. sale, clearance) are a frequent component of retail advertising, store signage, and point-of-purchase displays. Despite retailers' frequent use of promotion keywords, past research has not examined their meaning. To address this void, the authors conducted studies examining both consumers' and retail managers' perceptions of promotional keywords within the United States market. Using an experimental approach, the authors predict and find that clearance leads to relatively deep retail discount expectations compared to sale (across samples including consumers and retail managers) and that the attractiveness of price promotions is dependent upon associated promotional keywords.