HomeGoods launches e-commerce arm | Retail dive

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Diving letter:

  • Off-price retailer HomeGoods has started an online shop on his website HomeGoods.com.
  • HomeGoods mother TJX Cos. announced late last year that the home specialist will enter e-commerce after years of minimal digital presence.
  • The online HomeGoods store started with a curated selection of bedding, bathroom, kitchen, seasonal decor, pet and storage products. The company said new finds are being added regularly and the online store will soon be expanding, including new gift and festive decoration products.

Dive Insight:

When COVID-19 spread last spring, forcing retailers to close their doors completely, the low-cost suppliers were hardest hit in terms of short-term financial pain.

The analyst from MKM Partners, Roxanne Meyer, stated in April 2020 that the off-price was “worst positioned as they are solely dependent on the return of shop traffic, which could take time”. While sales and traffic recover for off-price providers, the digital question remains open.

Before the pandemic, off-price was a real success story at a time when much of the retail talk was focused on digital selling. Off-price providers have indeed avoided e-commerce, which in the past was ill-suited to the economics of their business model.

Rivals Burlington and Ross have no online stores. Just weeks before COVID-19 changed the world, Burlington completely stopped its e-commerce activities to focus on its business.

The lack of discounted digital sales may be due in part to the category these players are primarily focusing on: apparel, which has difficult logistics and low margins. Free shipping, profitable returns – these things make it difficult to support the low prices of the special price. In addition, the physical environment lends itself to the treasure hunt atmosphere that many attribute the success of the off-price.

Housewares as a category have higher prices, which can make selling them online more profitable. But it too has its challenges. Just ask Wayfair who have lost most of their money in their lifetime as an online housewares retailer due to marketing and logistics costs.

When it comes to profitable online sales, HomeGoods’ physical stores could be a benefit by reducing the company’s return shipping costs. When announcing the new store, the retailer said customers could return goods both in-store and through the mail. And HomeGoods seems to be offering customers a. to push for in-store returns € 14.99 shipping and handling Postage return fee, while in-store returns are free. HomeGoods also currently charges a $ 14.99 shipping fee for orders under $ 119, which helps reduce logistics costs.

Ernie Herrman, CEO of TJX, said the HomeGoods online store would complement its physical stores. “We believe our existing customers have been waiting for this, and there is another way for us to attract new buyers,” Herrman told analysts in August. after a Seeking Alpha transcript.

Herrman added that the purchasing organizations between the physical and online HomeGoods stores are more interconnected than the company’s other online stores, which could allow customers to better complement their in-store purchases with online purchases.

In an August release, MKM’s Meyer said that “we view Homegoods.com as an important catalyst for sales profits and believe that it could be far more effective compared to tjmaxx.com (assuming the appropriate resources / inventory are behind it).”


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