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TJ Maxx beats many of its rivals on price, and it reveals how it's perfectly poised to fend off Amazon and the retail apocalypse

TJ Maxx and its off-price siblings have become some of the few legacy brick-and-mortar stores that have been able to withstand the threat of Amazon and e-commerce in general.

TJ Maxx

TJ Maxx and its off-price siblings Marshalls, Homesense, and HomeGoods have become some of the few legacy brick-and-mortar retailers that have been able to withstand the threat of Amazon and e-commerce in general.

In the past two years, Marmaxx TJ Maxx and Marshalls has seen continued same-store sales growth while other brick-and-mortar chains such as department stores have struggled with the growing shift to online sales. Some department stores have leaned on their own off-price concepts to boost sales growth.

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So why has the off-price model been so successful in the age of online shopping?

First and foremost, analysts say that TJ Maxx and its fellow off-price chains are able to offer a treasure-hunt experience that is hard to replicate online.

The constantly changing assortment keeps the shopping experience fresh and encourages shoppers to come back. It also means that they are more likely to make impulse purchases because of a fear of missing out if they don't strike while the iron's hot. They might come in for one item but leave with many others.

Moreover, the off-price model has been especially popular as customers continue to stay hooked on discounts.

"The retail game is still being played firmly in TJX's ballpark, even during a period of better economic performance," Neil Saunders, managing director of GlobalData Retail, wrote in a note to clients in 2018 .

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He continued: "Our data shows no erosion of shoppers migrating elsewhere as their economic circumstances improve. Indeed, if anything the boost to consumer incomes over the first half of the year has encouraged existing shoppers to visit more often and spend more per visit."

In a recent note, a group of Bernstein analysts led by Jamie Merriman compared the pricing on Amazon.com versus TJX's websites and found that TJ Maxx and Marshalls won on price.

In a comparison of six identical, or nearly identical, products on TJ Maxx.com and the recently launched Marshalls.com , Bernstein found that pricing on Amazon was 77% higher than TJX, thus "affirming our belief that consumers that are primarily searching for value would do best by shopping at the traditional off-price retailers," the analysts wrote.

While TJX has made attempts to grow its online business, these analysts pointed out that e-commerce doesn't really fit their business model.

First, its low price points and low margins against relatively high shipping costs mean that it's hard to make this platform profitable. Second, the brands that it sells generally like to keep their products in the off-price market offline because if discounted items are picked up by Google, it compromises their ability to sell at full price elsewhere.

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When the Bernstein analysts tried to search for a specific brand on TJMaxx.com, they were greeted with a message that said: "some of our brands can be a bit shy."

There is no brand list on the site, so shoppers are advised to click through each category to find the product they are looking for.

See Also:

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SEE ALSO: We compared the shopping experience at TJ Maxx in the US and TK Maxx in the UK and it's clear which is a better store

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