Four Reasons To Question Marshalls' E-Commerce Push
SMITH BRAIN TRUST – Marshalls has always been about the thrill of the hunt, even more so than it’s big-sister store, TJ Maxx.
So the company’s recent announcement that Marshalls will enter the world of e-commerce naturally had some shoppers wondering how the brand would translate that thrill-seeker ethos into an online existence. And it had experts wondering how parent company TJX would pull it all off.
It’s “a rather surprising move,” says Jie Zhang, professor of marketing and the Harvey Sanders Fellow of Retail Management at the University of Maryland’s Robert H. Smith School of Business. The store’s existing website includes store locations and photos of products, but nothing to buy, aside from gift cards.
“While it could attract additional shoppers and generate buzz for its offline stores, there are several challenges facing this strategy,” Zhang says.
First, she says, Marshalls’ flagship sister store, TJ Maxx, also operates an online store. “There is already confusion among shoppers about the difference between the Marshalls chain and the TJ Maxx chain. It would be even more difficult to further differentiate between Marshalls.com, TJMaxx.com, and their offline stores.”
Second, she says, there’s the risk that the new online store might cannibalize sales at TJMaxx.com, and the chain’s offline chains, Marshalls, TJ Maxx and HomeGoods. The CEO of TJX Companies, parent of TJ Maxx, Marshalls and HomeGoods, perhaps anticipating the concern, told shareholders the company will seek to avoid cannibalizing sales by maintaining different product streams. How that plays out could depend on demand, however.
A third concern, Zhang says, is that Marshalls’ e-commerce store could add substantial burden to the merchandise procurement process. She says that process could be tricky, “especially for an off-price retailer like Marshalls, if it tries to differentiate the product assortment in the online and offline stores, in addition to differentiating with TJ Maxx.”
A fourth consideration, she says, is that the competitive landscape in the online discount retail space is “very different.”
“While TJX’s three chains all have enjoyed steady growth and crushed competition in the offline space, there are many strong competitors in the online space, offering name brand apparel, shoes, handbags, and accessories at deep discounts,” Zhang says.
“Overall,” she says, “I’m not optimistic about this strategy announced by Marshalls.”
The shopping science
Brick-and-mortar stores offer the ideal, thrill-of-the-browse-and-find experience for off-price retailers such as Marshalls and TJ Maxx. “Many shoppers are enticed by the treasure-hunting nature of the experience, and a physical store presents many sensory stimuli to arouse unplanned interest and convert the purchase,” Zhang says. Online, we’re different. We do compare products. We study consumer reviews. We compare prices across websites. We are more “cool-headed” in our online shopping habits, she says.
An alternative strategy
All that being said, Marshalls could improve its online persona, Zhang says.
“If Marshalls’ primary goal of opening an online store is to use the online presence to drive offline traffic, there are other effective ways to do it without the downsides,” Zhang says. “For example, by social media campaigns and by working with micro-influencers.”
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