Retail

T.J.Maxx Isn’t Worried About eCommerce Sales

In the world of retail, having an online presence may seem to be a necessity. However, it’s not for every retailer. In fact, depending on the type of business, it’s a second-rate or complementary option.

That’s how T.J.Maxx, HomeGoods and Marshalls executives see their eCommerce site — TJMaxx.com — which launched in 2013. According to Bloomberg News, the TJX parent company doesn’t really care about online sales because the business thrives on the real-life, real-time experience in store.

To date, its eCommerce sales hover around just 1 percent of the business’ total sales. And, according to its January filing, the company knows it – saying eCommerce sales had an “immaterial impact.”

The reason is simple but perhaps counterintuitive. Because inventory changes so quickly and regularly, a customer’s visit is unique to the next time that same person comes into the store. And part of the allure of T.J.Maxx is the thrill of discovering something in-store, on the cheap. The demographic that frequents TJX stores does indeed purchase items online often at other retailers. Bloomberg interviewed one woman who admits to doing so but could spend hours in a T.J.Maxx simply due to the thrill and discovery of the hunt, hidden within the racks and on the shelves.

The concept may sound counterintuitive or even flippant in a world of omnichannel, direct-to-consumer and other online-focused retail business models. And there may be only one size of that item on the rack, but the model certainly has a following.

The TJX model — as well as that of its competitors, Ross Stores and Burlington Stores — is one where its buyers take on excess items in the wholesale market in bulk and sell it for a price that seems to the consumer like a winning bargain. Working with more than 18,000 different vendors, the items, from clothes to housewares, appear in smatterings of the 2,500 TJX stores. While a sampling of those items are available online, the experience of finding that surprise winning item that speaks to the consumer at a steal is just not there.

Internet Retailer and Top500Guide’s estimated web sales of TJX last year were $309.5 million, which is up more than 6 percent over 2014’s numbers. On conference calls with analysts, executives have continuously underlined that the business’ eCommerce platform is just a supplementary element.

At the end of the day, TJX’s revenue has been up more than 30 percent over the past five years ($31 billion in sales in just 2015), and during that same amount of time, shares of the company have doubled.

So as they say, what works for some may not work for all. And vice versa.

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