Customers like to walk into a store and feel as if they don’t know exactly what they’re going to find.We all know that today’s consumers are always on the lookout for deals, and that’s part of what’s led discount retailers TJ Maxx and Marshall’s to become incredibly popular destinations for cost conscious shoppers. Both companies fly under the umbrella of TJX Companies, and the parent company has another runaway hit on its hands. As Yahoo shares, home-fashion merchant HomeGoods has been thriving as well.
Bloomberg Intelligence Senior Retail Analyst Poonam Goyal offered up some thoughts on what’s making the brand stand out from the pack.
“HomeGoods’ strength has been helped by the strong housing market combined with consumers’ appeal for value and a treasure hunt experience,” Goyal said. “Consumers, and specifically millennials, are spending money on experiences and they’re also spending to update their home, whether they are owning or renting.”
CEO Ernie Herrman shared some thoughts as well on the company’s recent second-quarter earnings conference call.
“HomeSense is rooted in inspiration and discovery, and will complement HomeGoods by offering expanded categories such as large-scale furniture, lighting, and art,” Herrman said. “It will also include new departments like a general store which will offer organization and hardware items, all with an element of fashion. We are extremely excited about some of the new categories and surprises for this concept, and believe our customers will be delighted.”
Cowen’s Oliver Chen notes that the success of HomeGoods is a testament to the strength of the parent company.
“TJX’s business model continues to resonate with customers and this is evidenced by TJX’s store traffic growth and higher merchandise margins vs. negative comps and traffic at most full-price department store peers,” Chen explained.
The success of HomeGoods can be partially attributed to what has made TJ Maxx and Marshall’s so appealing to shoppers. In addition to deals, customers like to walk into a store and feel as if they don’t know exactly what they’re going to find. It’s almost like a treasure hunt mentality, and TJX has nailed those notes throughout its lineup. That’s a testament to corporate leadership, but it’s also something that all brick-and-mortar retailers can take note of and implement in their own way.
“We offer consumers an eclectic merchandise mix that is ever-changing…We see our treasure hunt shopping experience as an advantage,” Herrman added. “As today’s shoppers spend more on personal experiences, particularly millennials, they construct their dollars further in our stores in both our apparel and non-apparel categories.”