There’s been much talk about the utter dominance of e-commerce. Cyber Monday set a new record for online sales, racking up $3.45 billion, according to Adobe Digital Insights. The National Retail Federation said more people shopped online throughout Black Friday weekend than in physical stores.
And the clicks continued past the weekend: Retailers such as Wal-Mart Stores Inc. and Amazon.com turned what was once just a discount day for online sales into weeks of bargains.
But there are some stores bucking the trend. Take TJ Maxx and Marshalls, owned by parent company TJX Cos. Inc. They’re a rarity in the retail universe: stores that don’t care about online sales because their businesses are based on the real-life retail experience.
Inventory shifts regularly, so no visit is the same — the promise of discovering great items on the cheap is what draws shoppers inside.
Companies like TJX and competitors Ross Stores Inc. and Burlington Stores Inc. have a team of buyers that pick up excess items on the wholesale market — anything from cashmere sweaters to copper mugs.
TJX alone works with more than 18,000 vendors, including manufacturers and retailers, to scoop up stylish stuff in bulk and resell it at a steal. With more than 2,500 US stores, the company is also adept at tailoring merchandise being offered to local trends.
T.J. Maxx sells some clothing and accessories on its website, but the experience is very different than sifting through racks for a one-of-its-size item.
TJX executives have repeatedly stated that they view e-commerce as a supplement to its shops, a way to drive real-life traffic. Though TJMaxx.com launched back in 2013, e-commerce sales remain at only about 1 per cent of total sales and had an “immaterial impact” on growth last year, according to a January filing.
Shares have more than doubled over the past five years and revenue is up more than 30 per cent during the same time period. TJX’s 10 brands hauled in nearly $31 billion in sales last year.
But don’t expect a trend heading back in time. This is a difficult system to replicate, said Simeon Siegel, an analyst at Instinet. TJX boasts a wide net of inventory buyers who find small batches of desirable clothing, then make a small bet on those goods.
This is unlike the traditional department store model, where buyers look at runway trends and make large orders of a few items, hoping that they’ll be the winner for the season.
Even an unsuccessful trip to a discount store can reinforce the thrill of the hunt. The instincts driving customers into parking lots is similar to those shopping online, Rost says. They’re searching for deals and the best item to fill some broad want or need without a target in mind.
As shoppers across generations and demographics become more focused on value than ever before, the excitement of finding something on sale has an even broader appeal. Millennials who grew up relying on e-commerce for all their needs are coming through the doors, too.