With online retailers like Amazon offering unprecedented convenience and brick-and-mortar establishments closing at rapid rates, you may have heard the sentiment that “retail is dying.” While many experts believe that the “death of retail” has been greatly exaggerated, this trend is certainly worrying if you run your own store. That being said, many businesses still provide unique retail examples for increasing in-store selling potential. In this piece, we’ll evaluate how TJ Maxx, Marshalls, and HomeGoods are overcoming the present challenges.
The TJX Model
TJX Companies Inc. is one of the most well-known brands when it comes to retail examples of “treasure hunting.” This brand has several similar off-price retail businesses under its umbrella, including TJ Maxx, Marshalls, and HomeGoods. These stores are known for their various eclectic (sometimes brand-name) items, low prices, and highly variable stock.
On the TJX website, they boast that “as the leading off-price retailer of apparel and home fashions in the U.S. and worldwide, TJX delivers great value on ever-changing selections of high-quality, fashionable, brand-name, and designer merchandise at prices generally 20%–60% below full-price retailers’ (including department, specialty, and major online retailers) regular prices, on comparable merchandise, every day.”
So how do these retailers work exactly, and how are they able to offer such low prices?
According to TJX, they offer such great deals because they buy low and sell even lower. “We take advantage of a wide variety of opportunities, which can include department store cancellations, a manufacturer making up too much product, or a closeout deal when a vendor wants to clear merchandise at the end of a season — as well as lots of other ways — to bring our customers tremendous value.”
This model has proven tremendously successful and durable, surviving the great recession and the pandemic with relatively little upset. So what is it about their business strategy that consumers find so irresistible?
What Is ‘Treasure Hunting’?
In retail, “treasure hunting” is a system where a full stock of items is not offered. Instead, a greater variety of items is available, with only a few of each item on shelves. In this model, there might only be one or two of a particular item available at any given time, with shelves sorted by category, not product.
In order for this model to be considered “treasure hunting,” however, some of the items need to be highly desirable. This allows consumers to occasionally find items that provide them with a high reward, as though they have found “treasure.”
In the context of TJ Maxx, Marshalls, and HomeGoods, that could mean finding a luxury-brand clothing piece for 60% below the standard retail price. It could also mean discovering something unique that suits your tastes. Since these stores never have the same stock twice, the customers feel a greater sense of urgency when making purchasing decisions. It also means that every trip to these stores is an adventure where you never know what you might find.
Adapting To Trends
Like with any successful business model, TJX is always adapting to ensure that its systems stay relevant and up to date. In 2021, TJX announced its intentions to attempt to recreate the in-store treasure hunting experience for their most successful store, HomeGoods.
GlobalData’s Neil Saunders stated, “It is much harder to replicate [a treasure hunt] online, as it is nowhere near as easy to browse through loads of products and pick out interesting things. That said, online will appeal to those who want a more efficient, mission-driven experience — for example, those who want to buy a very specific product. It will be important to keep some element of discovery online to ensure the brand remains cohesive.”
What Can Small Retailers Learn From TJX?
The TJX model thrives on keeping goods cheap, eclectic, and variable. But they’re a large-scale retailer with a plethora of resources. How can their system translate to smaller boutique retailers and small businesses?
While it would be impossible to fully recreate the experience of a TJX store on a small scale, some key takeaways can be gleaned from their style of business.
- Invest in your supply chain. See where you can cut costs by partnering with wholesalers or look into buying excess from other local retailers. If done successfully, this can translate to great savings you can pass on to the customer.
- Think outside the box. What unique offerings can you keep at your brick-and-mortar store that will differentiate your store from others? What can you offer through your website that can’t be found anywhere else? By considering these questions, you can develop a plan to integrate specialty items into your retail collection that will allow you to distinguish yourself and keep customers coming back.
- Walk in the customers’ shoes. What do customers see when they visit your store? How is it organized? By ensuring that your store has an appealing flow and organizational structure, you can encourage more customers to move throughout the store while keeping them interested and engaged for longer periods.
- Make it an adventure. By varying your stock, updating your offerings regularly, and taking the time to consider what your customers might like to see next, you can keep your inventory fresh and appealing.
By learning from the retail examples of Marshalls, TJ Maxx, and HomeGoods, small-store owners can improve their overall appeal and keep customers intrigued by their business offerings. All it takes is careful planning, streamlining supply chains, organizing storefronts, offering unique items, and keeping the shopping process fun and exciting. After all, who doesn’t love a good treasure hunt?