Last week we had some outdoor stuff at higher price points that we decided to sell at 25% off for a few weeks before we decided to either mark it down further or hold it for next year. We'd had these frog games for about 5 months with not a bite. Within two hours of the markdown, we sold one.
I was even more surprised by a toy lace-up shoe. We had three of them for over a year and they were pretty reasonably priced. This vendor (I'm keeping everything nameless, as I'm sure they don't want me talking about their stuff in this manner). That said, they didn't work. We came up with all sorts of ideas--kids don't tie shoes anymore was our favorite. In this case, we cut the price in half. No sale sign, no 50% off, just a comparable price of what we had been chargin (in very small type) and the current price. In a few weeks, all three were gone.
There are other stories, but you get the point. Folks check out items that they like (and I liked them too for the most part, because I bought them), decide whether it's worth it at that price, and buy it. It's different for books, as that's our mission, and everyone knows that, and buying a book at retail is sort of an investment in the store, yes, but also in the kind of book that you're buying. If you like to browse serious education books, you have to buy some or the assortment will deteriorate. Same for urban planning, economics, European history, cognitive science.
But for the gift stuff, I think people make the decision a bit differently. And they are checking out the prices, and if the item is priced right, it goes. Sometimes the right price is the original one we price it for (boy, have we been having success with our leather banks, which we have no intention of marking down--the original price seems to be quite popular) and sometimes its after markdown.