Revenge

TJ Maxx is the unexpected rebel of the corona-conomy, laughing in the face of ecommerce

Wednesday, June 24, 2020 by Snacks
"_Don't bother me while I'm Revenge Spending_"

"Don't bother me while I'm Revenge Spending"

Biggest fashion rebel of 2020... TJ Maxx. Discount retail giant TJX is the company behind the "affordable splurge" trifecta: TJ Maxx, Marshalls, and Homegoods. Now, it's also the unexpected rebel of the corona-conomy:

  • "Nothing will change:" Not a phrase you hear in an economy-pummeling pandemic. TJX's CEO said it won't leverage ecommerce to boost sales. It'll continue to do absolutely nothing to ramp up its tiny online shopping operation that's currently only 2% of sales.
  • But TJX takes it to another extreme: It fully shut down its websites during lockdowns, making online ordering impossible. Now it's actively limiting the items available on its site.
  • TLDR: TJX laughs in the face of online shopping, and wipes ecommerce tears away with a $6 Free People shirt.

The magnetic pull of the "treasure hunt"... TJX is confident in the joy its customers derive from the "treasure hunting" experience. Finding a $27 Michael Kors bag under a shoe rack is not only fun, but also something to brag about. TJX knows this can only be achieved at its physical stores.

  • TJX's only focus: Drawing shoppers back to its 4.5K brick-and-mortar stores. Since 98% of its sales are in-store (and those stores were closed), TJX took an $887M loss last quarter — But now a majority of its stores have reopened.
  • It's working: Sales at reopened stores are actually higher than they were a year ago, as deal-starved shoppers flood back into TJX. Call it it "revenge spending" — when you've been cooped up so long that you need to make up for all the shopping you didn't do.
THE TAKEAWAY

Ecommerce isn't always the solution... Online shopping operations can be expensive to implement and maintain. Shipping and returns make it hard to turn a profit on heavily discounted goods. And brands like Ralph Lauren don't want you to see their items selling for $12 online. Plus, ecommerce reduces the number of shoppers at stores. Since TJX thrives on the in-person shopping experience, it's one of the rare companies that can sidestep ecommerce.

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