What Marshalls’ E-Commerce Launch Means for Off-Price’s ‘Thrill of the Hunt’

Marshalls is taking its treasure-hunt experience online.

This week, the off-price chain announced its foray into e-commerce, debuting its digital store, Marshalls.com, which houses an assortment of its men’s, women’s and children’s wear as well as shoes, home goods and cosmetics.

The website — which previously served as little more than a store locator — marks Marshalls’ attempt to capture market share in the flourishing e-commerce channel at a time when off-price retailers continue to eclipse their department store counterparts.

“Most of the other off-price players are already playing in e-commerce,” said Beth Goldstein, executive director and fashion footwear and accessories analyst at The NPD Group. “Off-price retailers haven’t had as much of an issue with declining store traffic as other types of retailers, but they are not completely immune to it, so they’ve got to be everywhere consumers are as well.”

In its most recent earnings report, for the second quarter, parent company TJX Cos. posted sales that increased 5% to $9.8 billion — $6.1 billion of which was attributed to Marshalls and TJ Maxx, which has had its own online store for several years.

“We’ve learned a lot with TJMaxx.com, [and] we’re going to apply that to Marshalls,” president and CEO Ernie Herrman said during the company’s fourth-quarter earnings call in February, when Marshalls’ push into e-commerce was announced. “We really believe that it helps to drive incremental store traffic, given that a large percentage of our returns online go back to our stores, and so it’s going to encourage cross-shopping.”

Whether Marshalls’ online business proves to be a solid avenue for growth depends, at least in part, on the firm’s ability to replicate the in-store “thrill of the hunt” experience on its website. Experts believe a significant factor in the success and agility of off-pricers like TJ Maxx and Marshalls throughout the so-called retail apocalypse has been their ability to offer both cheap prices and a treasure hunt experience that engages shoppers with key brand-name finds.

In a press release announcing the platform’s launch, EVP of TJX Digital US Mark DeOliveira said that Marshalls.com would allow customers to shop through “fun, interactive features and curations” as it enters the omnichannel space.

“They’re going to have to focus on execution,” said Gabriella Santaniello, founder and CEO of retail research firm A Line Partners. “For some people, shopping in-person can be therapeutic, and treasure-hunting online can be somewhat cumbersome and overwhelming.”

At the same time, if Marshalls executes correctly, it has an opportunity to create an even stronger online positioning for treasure hunt experiences than it already has in its stores, Santaniello added. For example, customers may more easily navigate items through a website’s “sort and filter” functions — and even nab a few incremental buys while they’re at it — compared with the sometimes taxing process of sifting through hundreds of items in stores.

Among the retailer’s roster of products are top designer labels including Gucci, Dior and Frye. (The most expensive pair of shoes currently on the site are Saint Laurent boots that clock in at nearly $1,800.) New items will be added on a daily basis, with customers able to return products either by mail or in Marshalls’ roughly 1,100 locations.

During TJX’s fourth-quarter conference call, Herrman outlined the importance of an e-commerce strategy that differentiates its mix online versus in stores — not only to give customers a varied selection to shop in each channel, but also to prevent cannibalization of its brick-and-mortar outposts.

“The thrill of the hunt can translate online but is likely more susceptible to consumers being distracted and moving on to something else before seeing everything on the site, whereas when they are in the store they are more likely to cover the entire footprint,” Goldstein explained. “In addition, impulse purchasing is lower online, which is an important aspect for off-price retailers in store, so easy navigation and recommendations are even more important online.”

For the full year, TJX expects same-store sales to rise 2% to 3% for the Marshalls and TJ Maxx units.

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