How much loyalty do off-pricers have?
Through a special arrangement, what follows is an excerpt of an article from FierceRetail, an e-newsletter and website covering the latest retail technology news and analysis.
TJX Cos. has had consistently strong financial results — the envy of most retailers — but is this the result of something specific to the company or a consumer trend that can be tapped by others?
The NPD Group asked that question, and using data from its Checkout Tracking service, got a few answers.
First, TJX is enjoying slightly more than its share of off-price dollars spent overall, but category-specific data is revealing.
“It seems that off-price buyers are, first and foremost, loyal to the idea of off-price shopping. And such buyers are increasing in number. But the growth appears to be widely distributed across the universe of off-price retailers,” NPD told FierceRetail in an e-mail.
“There seems to be little loyalty among consumers to specific off-price retailers,” according to analysts at Checkout Tracking. “T.J. Maxx buyers gave T.J. Maxx four percent of their apparel wallet, while giving three percent to Marshalls and two percent to Ross. Marshalls buyers give 5 percent of their apparel wallet to that retailer, while giving three percent to T.J. Maxx and two percent to Ross. Nordstrom Rack buyers give five percent of their apparel spend to that chain, while giving three percent each to T.J. Maxx and Marshalls.”
As rivals grow new off-price formats, TJX’s dominance could be threatened.
New formats are opening at a rapid clip. Nordstrom is looking to its Rack stores for growth, Macy’s is developing Backstage and Saks Off Fifth is Hudson Bay’s growth vehicle.
TJX’s loyalty program, TJX Rewards Access, promises a sweepstake entry every time the member shops, opportunities for free giveaways and invitations to private parties.
- TJX shoppers less loyal to store than concept – Fierce Retail
- TJX Cos. plans to grow stores by 50 percent – Fierce Retail
Discussion questions: Are consumers naturally less loyal to off-pricers than fuller-price concepts such as department stores? What steps could TJX take to prevent or lessen its customer base from jumping to many of its new competitors?