Sep 12, 2017
Over the last several years, off-price retailers like TJ Maxx and Marshall’s have continued to defy the odds, opening numerous physical storefronts while their full-price counterparts are shuttering them. Similarly curious, off-price retailers have also largely been ignoring – or only dipping their toes in - online retail, putting them at a huge disadvantage in the ever-growing ecommerce space.
Our question to them: why?
The time is now for off-price retailers to start aggressively experimenting with ecommerce. It just may help them leapfrog the full-price competition once and for all.
But, the competition they face online may no longer just be other retailers. A recent report from Fung Global Retail & Technology highlighted the significant threat to off-price retailers of well-established second-hand resellers like eBay and Craigslist:
“Online secondhand resellers could pose a competitive threat to off-price retailers such as TJX [Cos.], as they offer steep discounts on branded merchandise and provide a treasure hunt shopping experience.”
We believe there’s a larger set of competitive challengers looming for off-price retailers who are hoping for the kind of growth in the online world that they enjoy in the physical one: discount online marketplaces that offer major brands at rock-bottom prices and an element of “discovery” that off-price shoppers crave. Sites like Zappos, Overstock, Wayfair and dozens more from electronics to guns and ammo, are all learning about the art of delivering a digital discovery experience akin to the off-line, off-price treasure hunt.
Look, we know it’s hard for off-price retailers to manage inventories and distribution in the same way as more traditional retailers, but we think there’s a big opportunity for off-price retailers still enjoying brick-and-mortar success to take a a small part of their most attractive inventory and offering it uniquely online under a fun experimental brand name to give them some space to play.
Some ideas that can help them get there:
- Challenge yourself to sell exclusively through social commerce. Insta Shoppable videos and images, Facebook Shop Now, Pinterest Buyable Pins and Tweets are among the tools that combine social, discovery and commerce for brands willing to experiment. Don’t bother with traditional banners, instead develop the discipline to really get social selling right.
- Create a site driven entirely by voice search. Why constrain buyers to categories you select for them? Open the floodgates to any path-to-purchase the customer can dream up, and all the while gather important market intelligence about how they think as an added bonus. WIth Amazon helping condition consumers to tell their Echos what they want to buy, off-price could be the first to really bring that natural-language-shopping capability online.
- Get hyper-local. Experiment with super-local Facebook fans and local stores to drive online visitors offline via discovery contests that create local heroes who generate buzz, loyalty and interest. Every bargain-hunter believes they’re the best of the best!
Whatever they choose to do, off-line off-price retailers should approach ecommerce as a fun, experimental promo opportunity with huge upside because they’d be developing digital, creative and operational expertise all at the same time.
As the saying goes, today’s businesses need to disrupt themselves before someone else does it for them. Off-line, off-price retailers are no exception.
No matter what business you’re in, you too can disrupt your category. Get in touch at email@example.com to hear our thoughts on how.
Joe Panepinto, PhD is SVP and head of strategy at Genuine. His team designs and develops digitally-driven business, creative, experience and ecosystem strategies.