T.J. Maxx Takes a Unique Approach to Post-Pandemic Recovery
While most retail stores rushed to move business online during the pandemic, T.J. Maxx (TJX) took a different approach. The discount department store chain only had a small online presence before the pandemic hit and stopped taking online orders altogether during lockdowns. The company is betting customers who have been stuck at home or only visiting the grocery store will be more eager than ever to browse its aisles in person.
TJX Cos., the parent company of T.J. Maxx, also owns Marshalls, HomeGoods, and several other discount chains. It operates over 4,500 stores around the world, and as of June 17, about 85% of its stores have reopened.
Other Retailers Shift Away From Brick-and-Mortar Stores
As TJX works to return to pre-pandemic normalcy by drawing shoppers back to brick-and-mortar stores, many other retailers are doing the opposite. Some are making permanent changes to their business plans and shifting focus away from physical stores.
Index group (IDEXY), which owns Zara and other fast-fashion brands, plans to permanently close up to 1,200 stores. Walmart (WMT) is investing heavily in ecommerce, anticipating that people will keep shopping online for groceries and other items, even after the pandemic subsides.
The Draw of the T.J. Maxx Experience
For T.J. Maxx and other discount retailers like Ross Stores Inc. and Burlington Stores Inc., margins are small for online sales. In fact, before the pandemic, only about 2% of T.J. Maxx’s sales came from ecommerce. So instead of shifting their entire business model, TJX and similar stores are leaning into what they do best: offer an experience.
The company’s CEO, Ernie Herman, explained how the T.J. Maxx shopping experience might be just what people are looking for after being stuck inside. He says, “In today’s environment, we believe this kind of shopping experience can serve as a break in the day and as some ‘me time’ for our customers and in the future will continue to be a major draw for consumers to our stores.”
Herman reported that for now, the strategy is proving successful. Shoppers are flocking to stores, driving sales higher than they were this time last year.
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