Hunting for treasure takes on two key roles in the recent Fortune article about the success of retailer T.J. Maxx. One role of the treasure hunt is T.J. Maxx’s use of it to attract shoppers, and that role is obvious in the article. The other role is somewhat more subtle, and entails deeper implications for business success not overtly stated in the article.
The article “Is T.J. Maxx the Best Retailer in the Land?” was in Fortune’s August 11, 2014 issue. It tells how T.J. Maxx’s bricks and mortar stores have thrived despite the changing nature of the retail sector, where shoppers have been shifting away from physical stores and making more purchases online. Moreover, T.J. Maxx’s success is due to more than merely having low prices during times of economic challenge. T.J. Maxx’s impressive performance occurred at a time when many retailers, even discounters, have been struggling.
According to the Fortune article, T.J. Maxx’s annual revenues “have risen 50% over the past six years.” “Its profits have almost tripled.” “In its nearly-four-decade history, it has had only one year of negative same-store sales.” Furthermore, well after the Fortune article ran, various sources reported on the latest quarterly earnings announcement from T.J. Maxx’s parent company, which also owns Marshalls. The announcement, issued August 19, 2014, indicated that earnings climbed, topping investor expectations, and same store sales rose.
Treasure hunt is attractive to T.J. Maxx customers
As the Fortune article clearly discusses, making shopping a treasure hunt at T.J. Maxx is a major reason why its bricks and mortar stores do quite well. According to Fortune, “Hardly anyone goes to Marshalls or T.J. Maxx to get something specific” and “the lure is the serendipitous discovery”. So, hunting for treasure is something many T.J. Maxx shoppers find appealing. And, T.J. Maxx offers an environment where shoppers can do just that. Shoppers can hunt through the frequently changing merchandise in T.J. Maxx stores in search of items they’d like to purchase. As Fortune points out, “the busiest stores take daily delivery of product” and it is “put out on the floor right away”, so shoppers have plenty of new items to hunt through.
As long as the merchandise mix allows shoppers to find “treasure” to buy, coming into the stores to shop is appealing. This has enabled T.J. Maxx to do very well, even though it relies heavily on its bricks and mortar stores and has been slow to move into online retailing. Apparently, the thrill of the hunt can be more powerful than whatever advantages shopping online might offer. Thus, T.J. Maxx is one more example of how low tech strategies can still do well even when technology advances may be disrupting the industry.
Businesses benefit from finding their treasure
While the Fortune article discusses the treasure hunt in terms of how its market appeal allows T.J. Maxx to thrive, the concept of finding your treasure has deeper implications for business success. Although not directly stated in the Fortune article, these deeper implications offer more subtle enlightenment about a desirable role of hunting for treasure, which essentially every business can benefit from. This kind of treasure is a valuable strength that enables the business to thrive. No pun intended, but T.J. Maxx’s treasure happens to be the treasure hunt it creates for its customers. Yet, all successful businesses have treasure. And, successful strategies find and tap that treasure.
This is especially important in times of change. Since T.J. Maxx’s treasure is creating those treasure hunts for its customers, finding ways to move the treasure hunts online, an approach T.J. Maxx is exploring, may be a good way for T.J. Maxx to deal with changing technology. In the meantime, as long as customers are enjoying the in-store treasure hunt, and T.J. Maxx is thriving with it, T.J. Max should continue with it. The company should not let its online efforts distract it from its treasure. Instead, those efforts should be directed toward enhancing the treasure, which is what T.J. Maxx seems to be focusing upon. And, like T.J. Maxx, all businesses need to pay attention to finding and nurturing their treasure.