Abstract Purpose - The purpose of this paper is to examine two key dimensions of in-store marketing, namely in-store promotions and price markdowns. These seem to be the two most important aspects of in-store marketing, though other dimensions such as retail personal service are also worthy of study. Design/methodology/approach - A sample of 287 New Zealand clothing and shoe retailers was studied. Survey questions included the perceived importance of in-store promotions and price markdowns. The aim was to explain these perceptions in terms of marketing strategies, threat of competition and environmental uncertainty. Findings - The results indicate that a discount marketing strategy, environmental uncertainty and emphasis on price-promotions are key to explaining retailers' perceptions and use of specific in-store marketing activities. In addition, seven key marketing activities were found to distinguish high- and low-performance retailers with respect to in-store promotions. Practical implications - The study has highlighted strategic aspects of in-store marketing, by focusing on two key components of in-store marketing, namely in-store promotion and price markdowns. The findings should provide much needed advice to retailers on the use of sales promotion tools in different environmental settings. Originality/value - This paper should prove valuable to academic researchers and retailing managers (particularly to those in smaller countries), owner-operated retail outlets, and chain stores.