Despite rumors of the “retail apocalypse,” TJ Maxx is thriving.
This global off-price retailer has been consistently opening stores and increasing sales for years. Meanwhile, competitors like Sears and JC Penney are facing major sales troubles.
Here’s what we know about TJX, the parent company of TJ Maxx:
- TJX’s sales have risen for 22 straight years.
- TJX stock has increased more than 24% over the past year.
- TJX same-stores sales rose 6% in the fourth quarter of 2019.
- TJX opened it’s 4,000th store in 2017, but has plans to hit 6,100.
It’s clear that TJX understands how to attract consumers to their brick-and-mortar locations. While all TJX stores are successful, TJ Maxx is the driving force behind the company’s positive results.
What’s the reason for TJ Maxx’s success? Let’s take a look.
1. They make it exciting, like a treasure hunt
When you walk into a TJ Maxx, it’s obvious that people are quietly hunting for bargains. TJ Maxx stores give these people exactly what they want, the opportunity to find a brand-name designer product at a bargain price, just like a treasure hunt.
2. Their stores are nimble
TJ Maxx locations average 30,000 square feet and typically don’t have any walls. This allows the stores to quickly rearrange the layout as needed.
3. They are always buying
TJ Maxx and Macy’s have similar revenue, yet TJ Maxx has 5 times the number of retail buyers. According to CEO Ernie Herrman, TJ Maxx has about 1,100 buyers and more than 21,000 vendors to buy from.
These buyers understand what their local customers want and are constantly buying inventory rather than only a few times a year.
This allows TJ Maxx to deliver better deals and be more responsive to trends.
4. They are fast
TJ Maxx has a motto “door to floor in 24.” Their goal is to get product out on the floor within 24 hours of being delivered to the store.
Their products actually get sold faster – an average of 25 days vs. more traditional stores like Macy’s which average 100 days per inventory turn.
"Fresh merchandise hitting the floor is key," said Paul Sweetenham, a former senior executive at TJX's European division. "It's a very simple business model, but it's hard to execute."
5. They deliver trust
By understanding their customer and delivering what the customer needs at that moment, TJ Maxx gains trust from their customers. Customers trust they will find a bargain when they walk into a TJ Maxx.
According to Brand Keys' 2019 CLEI survey, TJ Maxx is 1 of the 6 most trusted brands.
Conclusion
In response to the threat of TJ Maxx, retailers have now opened their own discount-priced branded stores like Macy’s Backstage and Kohl’s Off-Aisle.
It will be interesting to see if TJX responds with any new innovations to address the growing number of competitors in the discount space.
One option would be to create a new higher-end retail clothing store that provides deluxe services like makeup counters and personal shopping appointments.
Or, they could offer invitation-only pre-screening appointments of their new products to their most loyal customers. No matter what TJ Maxx does, we have no doubt that they will be successful.
You might also like: 8 examples of in-store events that attract customers.
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