Say what you will about its Halloween-themed cushions and “Live Laugh Love” signs, but HomeGoods is quietly one of the most successful home goods retailers in the country. The brand, owned by TJX, has built a network of nearly 1,000 stores across America and is well-versed in giving customers exactly what they want. What's even more surprising is that HomeGoods ended e-commerce last week.
According to numerous reports, the off-price chain plans to close its online store at the end of this month, and letters have been sent to customers informing them of this fact. TJX hasn't released an official statement, but the site speaks for itself. As of today, the HomeGoods homepage is just a store locator.
This e-exit comes just two years after HomeGoods launched its online business (after years of speculation about when it would enter). His other TJX brands, such as TJ Maxx and Marshalls, also have e-commerce business and there have been no reports of cancellations or suspensions.
TJX said in its 2021 and beyond analyst conference call that its online business is very small, suggesting it will never make up a significant portion of its overall business. This goes against the general trend. Most national retail chains now derive between 15 and 30 percent of their overall sales online, and some even significantly more. Explaining its long-delayed entry into e-commerce, TJX is trying to recreate inventory management and the “treasure hunt” shopping experience that is the foundation of brick-and-mortar stores.
To that, all I can say is, “Is it true?”
A sophisticated logistics retail giant like TJX, which can allocate limited inventory levels across thousands of physical locations, can certainly find ways to pool online inventory as part of its overall mix. can make it, right. Yes, it's hard, but is it harder than managing inventory in a store? Unbelievable.
Additionally, the reality is that some of TJX's product mix is no longer opportunistic, that is, discounted designer goods that flow into the supply chain from high-end home improvement stores, but is instead becoming programmed, reorderable items. There is also. Obtain directly from suppliers or overseas factories. It's the same as Macy's, Walmart, and dozens of other retailers in every retail category. These products alone would be enough to have a presence on your website.
Now let's look at the treasure hunt angle. Yes, that's important in stores, but isn't online shopping a giant treasure hunt where shoppers go deeper and deeper into rabbit holes looking for bargains? You could use the same smarts to recreate that experience online.
These are all good reasons why HomeGoods, and TJX in general, can and should continue selling online. But there's one more thing. Perhaps the growth rate of e-commerce has slowed after the pandemic, but at the moment it still accounts for just under a fifth of all retail sales in the United States. Is the company willing to part with 20% of its revenue potential for reasons that are yet to be revealed? If so, what will shoppers, let alone shareholders, say about all this?
When Amazon arrived nearly 30 years ago, traditional retailers all said it would never work, and it took them a while to admit they were wrong. That's why Jeff Bezos' company has had such a head start and is now thought to handle at least 40 percent of the nation's general merchandise e-commerce.
Well, it's not 1997 anymore. TJX has lagged behind the online world and is now in retreat. Time will tell if they pay the price, but small mistakes can bring big retailers out of business.
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Warren Scholberg He is a former editor-in-chief of several leading B2B publications. He is a visiting lecturer at Columbia University Graduate School of Business. He has received honors from the International Furniture Design Association and the Fashion Institute of Technology.and was quoted Wall Street Journal, New York Times, Washington Post, CNN As a leading expert in the industry, he also works in other media. His Retail Watch column provides deep industry insight into key markets and product categories.
