HomeGoods shut down a channel it launched just two years ago.
The furniture and decor retailer owned by TJX is no longer in the e-commerce business after it turned off the e-commerce function as of Oct. 21, a HomeGoods customer service rep confirmed on Monday. Visitors to homegoods.com can find info on their nearest store or send digital gift cards but they won’t be able to shop online for off-price bargains. Orders placed before Oct. 21 will be processed as usual. Other TJX nameplates including TJ Maxx and Marshalls still sell some home goods products online.
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But the end of e-commerce comes as HomeGoods forges ahead with a bigger bet on physical stores. A new HomeGoods store is slated to open on Thursday at the Shelton Square, Shelton, Conn., while locations at Sandusky Pavillion in Sandusky, Ohio and Quail Creek Crossing Shopping Center, Wichita Falls, Texas are on deck to launch next month.
Back in August 2021, TJX said it was building the HomeGoods e-commerce site “from scratch,” with a slightly different set-up than its other dot-coms. At the time CEO Ernie Herrman said it would use existing inventory to populate the new digital store. He explained the decision by saying that while in-store customers might buy just two chairs from a six-chair set, the leftovers could end up on the e-commerce site so a broader customer base can access these items.
The off-price home decor retailer went live one month late when e-commerce demand was still sky high. HomeGoods was banking on its combined 6.6 million Instagram and Facebook followers bringing their digital enthusiasm to the new venture. At the time of launch, the site offered free shipping on all orders of $119 or more.
In the most recent second quarter report for Fiscal Year 2024 for the period ended July 29, the company said net sales rose 8 percent to $12.8 billion, with overall comparable store sales rising 6 percent. During the earnings conference call, CFO John Klinger said: “As to e-commerce, overall, it remains a very small percentage of our business.”
Klinger didn’t disclose what e-commerce sales were for the quarter. However, for the year ended January 28, 2023, TJX’s annual Securities and Exchange Commission filing state that tjmaxx.com, marshalls.com and sierra.com, represented “less than 3 percent of Marmaxx’s net sales for fiscal 2023 and fiscal 2022.” Total Marmaxx sales were $30.55 billion. For HomeGoods, net sales for the year were $8.26 billion, and dot-com “represented less than 1 percent of HomeGoods net sales for fiscal 2023 and fiscal 2022.”
TJX CEO Ernie Herrman is confident in the appeal of brick-and-mortar stores. “We have developed one of the most flexible brick-and-mortar retail models in the world. The flexibility of our close-to-need opportunistic buying allows our merchants to quickly react to the hottest trends in the marketplace and adapt to changing consumer preferences,” he said during the company’s second quarter conference call. TJX’s 4,884 stores are merchandised individually to support local customer preferences.
E-commerce plays a small role in the off-price sector overall. In March 2020, Burlington CEO Michael O’Sullivan said the off-price retailer would be ending its e-commerce platform to focus on brick-and-mortar. At the time, e-commerce drove just 0.5 percent of the company’s $2.21 billion in revenue.
“In our business, which is a moderate off-price business, the nature of the treasure hunt and the price point that we operate at mean that brick-and-mortar stores have a significant advantage over e-commerce,” O’Sullivan said at the time.
The off-price treasure hunting experience encourages customers to visit stores frequently to see what’s new. But people who shop online usually know exactly what they’re looking for, and it’s difficult to replicate the “treasure hunt” online, though one new app is trying to do just that. Plus, online shopping lacks the rich visual stimuli that encourages profitable impulse buys in store.
Another problem with home goods is that steep freight costs to ship inventory and dispatch individual orders chip away at profits, making it harder for the category to make sense online depending on the business model and price points.
Burlington isn’t the only off-price retailer without e-commerce. Tuesday Morning, which liquidated after filing its second Chapter 11 bankruptcy petition earlier this year, discontinued e-commerce in 2013. The Ross Stores website simply directs consumers to their nearest Ross or DD’s location with any commerce function available through digital.