Here's why millennials are flocking to TJX stores
TJX's treasure hunt assortment is appealing to digitally savvy millennials looking for fancy consumables at a bargain.
As the company's second quarter results show, the retailer has found a way to lure younger shoppers away from their phones and tablets by enticing them with an assortment of brand name beauty products and other consumables priced at a discount.
TJX stores have become a magnet for shoppers looking for bargains on consumables such as olive oil, shampoo and cosmetics.
The food assortment, which is stocked with a limited number of hard-to-find items such as sriracha ketchup and butternut squash pasta sauce, provides shoppers with a sense of excitement. The treasure hunt aspect of the food assortment establishes an urgency to buy the item but also to come back to the store.
"We see our treasure hunt shopping experience as an advantage," said Ernie Hermann, CEO of TJX Cos. "Today's shopper spends more on personal experiences, particularly millennials. Their dollars go further in our stores in both our apparel and non-apparel categories. Half of our sales come from non-apparel categories. We are very pleased that across our major divisions we continue to capture a broad age demographic, with new shoppers skewing towards younger customers. We see this as a great indicator for our future."
For the second quarter ended July 29, TJX Cos. reported better-than-expected quarterly profit and sales and also raised its earnings forecast, as higher customer traffic drove sales at its flagship Marshalls and T.J. Maxx stores. TJX said its comparable store sales rose 3 percent. Net sales increased 6% to $8.4 billion over last year’s 7% increase.
TJX, which also operates in Canada and some European countries, said second-quarter revenue climbed 6 percent to $8.36 billion, beating analysts' expectations of $8.29 billion. Net income slipped 1.6 percent to $553 million or 85 cents per share as expenses surged.
TJX raised its forecast for adjusted earnings to $3.78 to $3.82 per share from $3.71 to $3.78 for the year ending January 2018.
“I am very pleased with our strong second quarter results," Hermann added. "Looking ahead, we see exciting opportunities for our business in the second half of the year. We believe we are set up extremely well to take advantage of the abundant buying opportunities in the marketplace. We have great liquidity in our inventories and we continue to grow our global sourcing universe of over 18,000 vendors, as we constantly open new vendor relationships and strengthen our existing ones. Above all, we are focused on giving consumers compelling reasons to shop us by offering an ever-changing, eclectic mix of brands at excellent values and making our shopping experience entertaining and inspiring."
TJX Cos. operates nearly 4,000 stores that offer a mix of apparel, home goods, food, beauty products and other consumables.